Beginners often ask: “How much can you make in Forex?”

$500 per month? $2,000? $10,000 or more?

In theory, the answer is “whatever you can”.

sounds good? Well…not quite.

You see, this question doesn’t really make much sense since traders’ monthly earnings are rarely consistent.

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How much can you earn on foreign exchange?

For illustration purposes, let’s assume an average monthly profit of 3%. This equates to a monthly income of $300 for every $10,000 of capital in the trading account.

For performance benchmarks, a reasonable estimate is 3%.

However, in terms of actual results, this estimate may vary from your actual monthly performance. Why?

Because there are so many factors that can affect your actual monthly performance.

You see, unlike regular jobs with fixed income, there are no such guarantees in the deal.

When earning a living, your profits are uncertain and your daily/monthly expenses are fixed.

You need a mortgage. Water and electricity need to be kept running in the home. You have to put food on the table. Fees will be incurred regardless of whether you trade profit or loss during the month.

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The problem you need to know

So, you know, it’s not really a question of “how much can you make in Forex?”, it’s a question of “how much do you have to make so you don’t starve?”.

Now we’re somewhere. Now, we’re talking about real-life applications, not theoretical averages.

How much money can you make in Forex trading?

If I had to estimate the price, I would say that to make a living at a comfortable price, you need an account size of at least 30 times your monthly spend.

So if your monthly payout is $3,000, you’ll need at least $90,000 in an account to maintain that level of trading income (assuming, of course, you have the skills and knowledge to make a profit).

This allows you to roughly estimate the amount of capital that should be dealt with in the future.

Of course, for practice purposes, I recommend starting with a smaller account, especially if you’re new to it. But put that approximation behind your head – this is the minimum account amount you can make a living with.

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It is still a better choice

If your trading capital is less than $50,000 (or you are new to trading), it is recommended that you do not trade full-time.

In fact, a better option is to trade part-time.

Stick with a job to ensure steady income, open an account with a few thousand dollars, and then make it a few hundred dollars a month over time.

This saves you time to hone your trading skills, deepen your understanding of the market and build your trading account. If your account grows from $10,000 to $50,000, you will be more likely to handle a $50,000 account.

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Important indicators in trading

This is the expected value, called the combination of your win rate and risk-reward, that determines your probability in the long run. Mathematically proven as:

E = [1+(W/L)xP-1

where:

W = size of your average win

L = size of your average loss

P = odds of winning

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Let’s do this with a small example

Imagine you have 20 trades, 12 of which are winning and 8 are losing. So the win rate is 12/20 or 60%. If those 12 trades brought you a profit of $6000, your average profit would be $6000/12 = $500. Your loss is $3200 and the average loss is 3200/8 = $400. When applying this data to the above formula;

E = [1+(500/400)] x0.6-1 = 0.35 0r 35%

So your trading strategy is 35% and then for every dollar you make in your long-term trade , you will get 35 cents.

Also, there is another general theory in which you have to play more to win more. The casino industry can illustrate this simply. You know casinos are open all year round. Did you notice and question it? It’s the same theory they apply, play more, win more. The theory is the same with your business. This means that if you can add more trades, you can earn more currency. Therefore, the frequency of transactions is an important factor, but it does not mean that you can get funds through that transaction. No other factor can determine this.

You may have heard that some traders have started with minimum accounts and increased it to millions in a short period of time. However, the truth revealed is that for every trader who tried this; many others blew up their trading accounts. So don’t think of it as a get-rich-quick method where you have to grow steadily over time.

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The greater the risk, the greater the reward

Let’s say your expected value is positive and you generate a 20% return per year. And, you also have a $10,000 trading account. Therefore, the amount you can profit from depends on the risk of each trade. If you risk $1000, you can earn an average of $20000 per year. If you risk $3000, you can earn an average of $60000 per year. Also, if you risk $10,000, you can earn an average of $200,000 per year. That’s the reason we mentioned earlier, you can profit from this depending on the account size and its risk. So you accept the fact that the more you risk, the more you get. Because, every time a successful Forex trader manages their risk successfully, it is an important factor in a sustained profit.

Also, if you are a full-time Forex trader, you can make a lot of money in addition to part-time users. However, in this case, you have to spend money for everyday needs. If you’re part-time, you don’t have to make withdrawals and compound returns in your account. Therefore, you must have a good idea of ​​what you want and how withdrawals will affect your transactions.

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So don’t quit

I think most people need at least 1-2 years of profitable trading to consider full-time trading.

From personal experience, I’d venture a guess that even if they had the option, most retail traders would actually be reluctant to trade full time…because of being alone and bored at the computer all day.

Part-time trading enables anyone with a few thousand dollars to start their trading journey. (If you don’t have a few thousand dollars in savings, you have a bigger problem than learning how to trade.)

So start small and build your own account. If you can, please do not withdraw your trading profits. Go ahead and reinvest them into your account and start making money.

If you have the right way to trade and it’s not too bad, your profit of a few hundred dollars can quickly turn into a few thousand dollars…and keep growing.

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Conclusion

Successfully trading any market is a long-term job. Consistent profitability takes years, not months or weeks.

With this information, it becomes much easier to take things slowly. Keep your bets small and focus on quality settings instead of trying to trade every day.

If anyone claims their trading strategy or system is making 30% or 40% per month, run away and don’t look back. While such profits are possible, they are not sustainable and will likely lead to account theft.

A few years ago, I learned that it is much better to focus on the trading process. These include risk management, being patient with quality settings and drawing accurate levels, etc.

Profits will follow as long as you are proficient in the trading process. In other words, let the money you earn from Forex be a by-product, not your motivation.

If you must target specific currency numbers, be conservative. Don’t make the mistake of earning 30% or 40% profit each month.

A target of between 5% and 15% per quarter is reasonable but still attractive, especially for those customers with larger accounts.