Forex Trading: How Much Can I Earn?

One of the classic questions many new forex traders – or people interested in forex trading – ask me is how much they can earn on the market.

This is a tricky question, but it can be answered easily. My answer is always “Depends”, since there are a lot of factors controlling just how much you can make trading forex.

The first thing to keep in mind is of course the risk return trade off principle. If you want to make more money, you will have to make more moves; this means enduring more risks in the process. The higher target profit you set, the higher your risk factor is. If you see a forex system offering 100% guaranteed profit, now you know that they are selling lies.

Next, your trading style and strategy also play important roles in determining just how much you can make from forex trading. I once saw an aggressive trader make a little over $10,000 overnight making several transactions. I personally love to trade several times a week, pursuing small return of around $400 to $800 from each transaction, so that I don’t have to deal with all the emotional tensions of short-term trading.

Last but not least, your initial capital – or your margin – also plays an important role in determining just how much you can make from forex trading. If you start your account with $20,000, for example, you can trade full-lots, which means more profits will be waiting for you. Trading with more margin will also allow you to use risk-management techniques and stay profitable easily.