How much money you can get in Forex day trading?
You might know that forex market need minimum amount to start your day trading, trades in 24 hours in a day and offer you with many potential because of leverage which had been provided by forex brokers as well. The main question is how much money do forex traders make? So, information bellow will show you the potential on How Much Money Do Forex Traders Make, using the risk controlled forex in day trading strategy.
Understanding trading risk management
Every forex trader is successful to manage their risk; this is one of the most crucial points of profitability. Of course, you should keep the risk on each trade in minimum, 1% or less is the most typical. It means that if you have $3000 in your account, then at least you cannot lose more than $30 in the single trade. It might look small, however losses can occur bigger, even your good trading strategy have a risk to lose.
Strategy of forex day trading
While you have many components in your strategy and can be analyzed to get profit in many ways, strategy was often to be ranked based on the wind rate and risk ratio. Win rate is how many traders were win in certain amount if trades. So, having the win rate is so ideal for most day traders as well. Then risk will determine how much your capital was being risked to earn certain profit as well. So, if a trader loses about 10 pips but he makes around 15 in winning trade, they earn more on winners that they were losing on loser points.
Therefore, make more winners also a great strategy that you should consider. Then the higher win rate also means that there more flexibility with your high reward or risk which is means that your win rate can be in lower, but you still be profitable as well.
How much money do forex traders make?
You can assume the trader has $5000, they will have the decent win rate about 55% in their trades. They only take a risk 1% from their capital or $50 in each trade. It can be done by using stop loss order was placed 5 pips from entry price and the target was located on 8 pips. This is means that potential reward in every trade at 1, 6 times bigger than the risk, so you might have winner options than losers.
So, while trading the forex around 2 hours in active time, it’s also usually possible to do five round o turn the trade by using those parameters. If there are 20 of trading days in a month, that trader will do 100 trades in average. Then we can assume that the trader using 30:1 of leverage, because it’s usually more than enough for forex day traders. Because of trader have $5000 and its leverage at 30:1, then trader can take the position which worth up $150.000. The risk was based on the original $5000 and keeping to get limited risk on the small portion in deposited capital.