One of the most frequently asked or inquired questions about forex is how much money you can make trading forex per month. Everyone who is interested in trading has a secret desire to know how much money they can make in exchange for their time and effort when compared to other ways to make money. A group of traders believes they will earn a 100 percent return, while others fear if they even can make 30% return. Let’s find out how much you can actually make by trading forex.
How Much Forex Traders Make?
How can we make money in business? We sell the items or products for more than we paid for them. When we trade in Forex, this is exactly what happens. We buy an asset and wait for it to grow in value before selling it and profiting. If we look closely, we have some factors on which our profit amount depends. What are they?
Your starting capital: The more the number of goods you can have, the greater your profit would be. Investing more is the way to get more goods. As a result, the amount of your initial investment plays a significant role.in determining your profit.
Bank credit amount: If you don’t have enough money, you can’t really make a good investment. In such situations, you can go to a bank or financial firm to borrow your investment.
Asset liquidity and price volatility: If you have a product that is easy to liquidate and whose price fluctuates frequently, you have a strong possibility of making more money from it.
This is the same in forex as well. Traders in forex also sell and buy items, using leverage and considering volatility and liquidity. Here are a few examples. Consider that the EURUSD ratio is 1 to 2 and the euro is the base currency.
You have a 2,000 USD deposit. One lot equals 100,000 base currency units. The account conditions state that the minimum trade size is 0.01 lots or 1,000 base units, which is equal to 100% of your deposit (2,000 USD or 1,000 EUR). For four-digit quotes (100,000 * 0.01 * 0.0001), one point on the EUR/USD costs 0.1 USD or 10 cents (100,000 * 0.01 * 0.0001).
According to the volatility calculator, an average currency fluctuation might reach 80-100 points in a single day. As a result, you can profit from such swings in any way! According to the polls, new traders can make an average of 100 points each day, or $10 per day.
If all goes well, a trader could earn ten dollars each day with a deposit of two thousand dollars. This leads to a monthly profit of 10% (10*20 business days = $200 USD).
This calculation does not include spreads and swaps, which eat up a significant portion of income. Second, there is a risk management rule that states that a trading risk cannot exceed 2% of the deposit, while in our example, the risk is 100%! Third, a trader is not always profitable. A trader will not be able to open a trade with a deposit of $1,000 USD and no leverage since 0.01 standard lots equal 2,000 USD when the rate is 1:2. With the real rate at 1.1066, the minimum trading amount will be 1,106 USD without leverage.
Let’s look at another example, here you again deposit $2,000 USD. Now you’re maintaining the “2% risk per trade” rule and therefore can’t do without leverage(a broker’s credited money). Now assume the leverage as 1:1,000. With this in place, you can open a trade worth $40,000 USD(20000.021,000) USD. Then you’ll be able to buy 20,000 EUR, or 0.2 lots (20,000/100,000). So the one point cost is: 100,0000.00010.2= 2 USD
You can earn 200 USD (2 * 100) with a deposit of 2,000 USD and 100 points gained per day. This equates to nearly 4,000 USD every month, or a 200 percent growth.
You only risk 2% of your account, resulting in a risk of $40 for each trade.
These are optimistic statistics, but net earnings are calculated after subtracting spreads, swaps, past losses, and withdrawal costs. Also, keep in mind that employing leverage without adhering to risk management guidelines will very certainly result in stop-outs.
There is no such thing as “easy” money in Forex. Experienced traders who make a lot of money in the foreign exchange market take trading very seriously: they optimize their trading tactics and thoroughly research financial instruments as well as the features of the trading platform.
So, how much money do Forex traders make per month? It’s all up to you: your willingness to take risks and the amount of time you’re ready to spend trading. Sky’s the limit! So, based on the previous calculations, create a table and establish your own goals!