This is a question always in the mind of every aspiring forex trader. How much can I make? Is it enough? Will I attain financial freedom from this? The amount of money you can make day trading is dependent on a few aspects.
Day Trading Forex: Is it worth it?
If you’ve been a trader for some time, you’ve come across different opinions regarding day trading forex. Some say you can make enough money to quit your regular job, others say you stand to lose a lot of money from day trading.
The answer lies in between. The truth is, by investing the time and effort to learn and follow all guidelines religiously, day trading could be the best decision you’ll ever make.
On the flip side, it can be a nightmare if you act out of impulse without a stable plan.
Aspects which determine how much money you can make day trading Forex
It goes without saying: the more money you invest, the more you will gain. Someone with $1000 of capital will make less than the person with $10,000 in his account.
If you’re aiming to make consistent income from day trading, invest a lot more money than you’ll need for expenses.
For example, if your expenses are only $1000 per month, invest in more than $10,000.
This way, you’ll get some for expenses and enough to reinvest in your account.
An experienced trader who has invested thousands of hours into his forex education will make more than a newbie with only two months. The more you’re willing to educate yourself, the more money you can make.
3: Risk Management
Without proper risk management, even an expert trader may make less than a newbie with good risk management.
How much money you risk per open position should never be more than 2% of your capital.
4: Trading style
A scalping trader will never make more than a position holder or swinger. It’s just how it is. To make a lot of money you have to tip the scales of trading in your favor.
A trader who holds his positions for weeks or months makes more than one who closes her trades every one hour. This is because you’re targeting the large market moves and they carry more pips than scalping.
5: Risk : Reward
Setups will have varying risk rewards. One setup may have 1:1 while another carries 1:3 R: R.
Most average traders just take any trade as long as it’s profitable without calculating the risk: reward. 1:3 or more is usually a good sign since you can triple the amount you invested in that particular trade.
The higher the reward, the more money you can make.
Average day trader salary
From the factors above, you notice there is no particular range people fit into. Most day traders barely break even. Others can make $1000 or even $10,000 per month and there’s even a small percentage that lives lavishly thru day trading.
With a $1000 capital and proper trading skills, you can earn $350 per month comfortably.
An alternative solution: Forex Robo Advisors
Robo advisors can provide you with an extensive array of advice relating to your investment needs. While they won’t tell you how much you will make, forex robots will guide you to make better decisions depending on different factors.
There’s no definite range of money you can make from forex day trading. You can make close to nothing, and you can make A LOT. It’s all at your discretion.