The world of traders was always evoking a luxury lifestyle. With the movie Wolf from Wall Street and similar movies, that image of a trader settled even more. But how much traders, and particularly Forex traders can earn? Let’s see first what numbers say.
According to Payscale, the average trader’s salary can reach $83 000. What is interesting is that the bonuses can bring them as much as $100 000 per year. If we include commissions and profit-sharing options, the average equity trader’s salary can go up to $160 000. These numbers refer to the equity traders working on behalf of their companies or clients. But are also giving the cue about how much their Forex trading peers earn.
Forex Traders Vs Stock Traders – What is the Difference?
Some people say that there is a big difference between Forex traders and stock traders. Stock traders buy shares of a company and sell them when the price goes up. Forex traders buy and sell currency pairs. For this reason, it’s important for the novice trader to understand how the system works and the risks involved before engaging in this kind of investing. This article will give you an overview of Forex trading and its basics.
How much do retail traders earn?
When it comes to the retail Forex traders, the story gets a little more complex. It’s because the retail traders’ profiles are so different, which reflects on their earnings. Very often, it depends on their choice of a Forex broker. However, what affects the final calculation of the Forex trader’s profits is the trading lot size per transaction, the number of pips you have made. And in the long run, it depends on the frequency of profitable trades.
The most successful Forex traders – how much they earn?
You have all heard of George Soros, the great legend of Forex trading. Nevertheless, ordinary traders manage to achieve incredible results as well. Let’s see who else makes part of the top traders’ list.
Cheng Likuy deserves to be mentioned among the best traders. He’s coming from the Chinese province of Shanghai and started trading in 2008 with $ 400 and set a new profit record on Forex. In less than a month, he succeeded in accumulating accumulated over $ 240,000by trading Forex. Cheng only spent six months training. The latter did not reveal all his secrets. But he claimed having mostly used pending orders to earn his fortune.
But the most incredible story came in 2012 with Akhmad Arief, who managed to do what any trader dreams of doing. In two weeks of active trading, he grew his starting capital from $ 1,000 to $ 1,000,000 by using the aggressive tactic to trade major currency pairs such as GBP / USD and EUR / USD. No one expected he could become a millionaire using a high-risk strategy.
For sure, big profits require a significant investment. The average annual return of professional traders who take big risks ranges from 20% to 100%. It’s pretty easy to see the difference: 50% of the profit from a $ 100 investment makes only $ 50 while 50% of a $ 1,000,000 investment makes $ 500,000.
Brief About Forex Market:
A market where currencies are exchanged to conduct foreign trades and businesses. It is the most crucial thing with many accounts, and exchange has to be done very carefully. Let us understand the foreign exchange market by an example:
- Suppose you live in the United States and want a buy a very famous cheese manufactured by the company of France.
- Now, here the currency you will be paying in is dollars, but the receiving company excepts Euros.
- So, here where foreign exchange or trading comes from. Either you would directly pay them through foreign exchange, or the site or middleman you buy the cheese through has to pay the company.
- Here, the importers of the USA have to pay the seller company in euros. And, this all is conducted through the exchange.
- The same case happens when you have to travel to another country and buy things in the state or country.
Fluctuation Risk in Foreign Exchange:
Whichever company is included in foreign exchange is at great risk. So, one has to take care of many things, but the question is from where this risk occurs.
Firstly, the currency rate is too fluctuating. Hence, rates can go down or up at any time, and the buyer or exchanger has to pay accordingly. When the rate of a special currency is higher than the buyer’s currency rate, then one has to face some losses and vice-versa.
So, forex traders have to keep a backup plan and marketing strategies to get a hike.
Nowadays, business houses are also gaining many advantages and entering the trading market. Big companies know that trading can give them a huge profit on their capital funds, and they can get a boost on annual profits.
So, companies are selling their shares and getting more profit through traders. They know well when to pitch and how they can take advantage of growing markets efficiently.
Many traders make a very good living trading Forex, and some have had large returns that have allowed them to become professionally independent. A novice Forex trader can indeed make lasting profits by trading currencies, even with a low starting capital. Of course, no one can guarantee regular 100% income safety. But once you have enough trading experience, then you can consistently make a profit. It takes just enough patience, learning, and practice to generate reasonable profits regularly successfully.
Traders can live happily if they have correct strategies to increase the funds. One has to match the trading amount to the corresponding account to get a hike in business. One can increase the quality of trading by gaining much knowledge about the traders, market, and exchange rate. It depends on the trader that how they use this information correctly.