You can hardly find a multimillionaire retail Forex trader. Those who are after doubling or tripling their accounts are exactly the ones who wipe out their accounts once in a while. Their problem is they have never spent a few minutes to do some calculations and have a perspective from their future as a Forex trader.

But they are wrong. In this article, I will open your eyes on the reality to show you that all you need to become a rich or multimillionaire Forex trader is patience and consistency. So, make sure you read the rest of this article to the end. I see lots of false and misleading information on the Internet about the profit that Forex traders can make per month.

For example, in an article on one of the most famous trading and investment related websites thebalance. This is the most ridiculous thing you can ever hear or read. Consistency is the most important thing. So, it is not the percentage of the profit that says who is a good Forex trader. It is the consistency that counts.

This is what being a consistently profitable Forex trader means. Traders who say they can double their accounts every month, but they disappear when you ask for their track record, are either liars, or it is just a couple of months that they have doubled their accounts, and they still call themselves Forex traders.

I guarantee that they will wipe out their accounts as well. It needs several articles to explain this. Briefly, first you must choose a Forex trading strategy. Then you must learn it properly and demo-trade it until you become able to make profit with your demo account, consistently at least for consecutive months.

Then you can open a small live account and repeat this with real money, and if you can repeat your success with real money, at least for 12 months, then you are a consistently profitable Forex trader. I have explained this in more detail here and here. This question means how much profit you can make through Forex trading in long-term. To answer this question, I assume that you have already become a consistently profitable Forex trader, who is able to make profit, consistently, every month.

However, here is where most Forex traders make a big mistake that causes them not to make a fortune through Forex trading. Therefore, they either try to make more profit and double their accounts every month, that will cause them to wipe out their accounts because they must do this through taking too much risk , or by overtrading , or they start with a money that they cannot afford to lose.

I guarantee that all of these mistakes end to failure, even for traders who are consistently profitable. Such a bad mentality comes from having no long-term calculation, which is something that I want to do here for you. This calculation will change your life. You will see that you can even become a multimillionaire with a small account, and making a small monthly profit, only if you have the consistency, discipline and patience that I talked about above.

You just need to know where you will be, after one, two and three years of Forex trading and making profit consistently, no matter how much monthly profit you make, or how small your account is. I have created a simple Excel Spreadsheet that you should always have open on your computer. It enables you to know what your account balance has to be, every month and while you are trading and growing your account.

You must take a look at it at least once every day to remind yourself about the destination of your Forex trading journey. As I mentioned above, all you need to become a rich or even a multimillionaire Forex trader is consistency. If you are still demo-trading to master your trading system and become a consistently profitable demo-trader, you must use our spreadsheet to keep yourself in the right track, and to build the discipline you need to become a professional Forex trader.

This file prevents you from over-trading and expecting too much from the Forex market and yourself. Please read the explanations below the screenshot. You can change two cells in our Spreadsheet see the screenshot above to compare the different results it calculates and returns:. Those columns cannot be changed. However, the last column is for you to enter the account balance that you want, to compare the results.

This is a relatively realistic monthly profit that professional and consistently profitable Forex traders, especially day-traders can make. However, feel free to change it to different numbers to compare the results.

This has been proven by my years of Forex trading experience. However, traders have different styles and strategies. Based on such a wrong mentality, they try to double their accounts through risking too much or overtrading, and this will cause them to lose their money. As I mentioned earlier, consistency is the success key here. Please note that, to achieve what our Spreadsheet forecasts for you, you must increase your lots size accordingly, when your account grows and vice versa.

As you see, it is possible to become a multimillionaire through Forex trader, even when you start with a small account. You just need to be a consistently profitable Forex trader, which has to be achieved through learning, demo-trading and mastering your trading system and developing the discipline that Forex trading needs.

What you must note is that it is not the spreadsheet that tells you how much profit you must make every month. I actually have a whole article about duplicating forex traders on multiple trading accounts that may be worth having a look at. Everyone is always so eager to get going, hit the ground running and make money in the forex markets — which is great! Sound familiar?

This is what you MUST avoid and this cycle can be broken by trading on a demo or simulated account for a few months. There has always been this narrative within the forex retail forums that demo accounts are rigged to provide different market conditions, when compared to the live markets.

You should be trading a demo account before even considering how much money can be made in the forex markets. Another factor you need to consider is how long it actually takes to learn forex.

There seems to be this general assumption that you can learn forex on Instagram and become profitable within a few weeks. When you compare this to the fact that other forms of investors have to go through years of University, studying and exams, it seems a bit farfetched that forex traders would be able to get earth shattering returns overnight. I would highly recommend learning about the Dunning-Kruger effect as this is incredibly prominent in the forex industry with beginner traders.

The reality is that it takes over a year to learn to trade forex successfully and this needs to be considered before looking at the potential money you could make from forex trading.

Forex can change your life and it has changed the life of a huge amount of traders over the years — it just takes a lot of dedication to learn! Sadly, due to how tricky these markets are, many traders fail and end up selling courses to try and recoup some of their losses in the markets. I would recommend taking a look at our compiled list of the best forex trading courses.

Some of the traders that have taken these courses are now earning a full time salary from their trading — which is great to see! For example, Michael Bamber has a huge amount of extremely valuable content to help traders with their journey after struggling on his own journey for many years. He is now earnings thousands per month in the markets on his prop firm funded account.

It is very possible for you to start making money in the forex markets if you have a high enough risk to reward ratio. If you would like to get started with forex trading, feel free to check out some of the top rated forex courses on the web.

Kyle Townsend is the founder of Forex Broker Report, an experienced forex trader and an advocate for funding options for retail forex traders. Forex Trading for Beginners. Price Action Trading. Forex Charts. Forex Trading Strategies. Money Management. Best Forex Trading Platforms. Trading Lessons. com helps individual traders learn how to trade the Forex market. WARNING: The content on this site should not be considered investment advice and we are not authorised to provide investment advice.

Nothing on this website is an endorsement or recommendation of a particular trading strategy or investment decision. The information on this website is general in nature so you must consider the information in light of your objectives, financial situation and needs. Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted.

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Skip to primary navigation Skip to main content Skip to primary sidebar Skip to footer How Much Money Can be Made Forex Trading? How Much Money Can be Made Forex Trading? What Can Realistically be Achieved? Probably not what you wanted to hear right? Well that is the truth. If so, I think you need to realistically assess your situation.

This is obviously not including compound interest from within that year. How Does Having Unrealistic Expectations Hurt my Account?

The forex trading market has gained a lot of interest in recent months from both traders and non-traders. And this is not surprising. First, it is the market with the highest trading volume. Second, it is open to everyone. Third, it is operational 24 hours a day. It is easily accessible to people no matter where you are in the world.

A person from the USA can be exchanging currencies to a person from the Philippines in Asia in real-time through online trading platforms. Also, you may have seen depictions and stories on social media about ordinary people who became millionaires just by trading.

Some movies with known actors have painted a fantastic picture of the trading market. A world that centers on gaining millions of dollars, huge houses, and expensive cars. One such movie is The Wolf of Wall Street , starring renowned actor Leonardo di Caprio. In addition, some testimonials on the internet claim that an average person can reach fame and fortune by simply trading forex. They tell of rags to riches stories to entice you to invest your hard-earned money in trading investments.

Sadly, this is not the reality. The forex market is a risky investment asset. There is no guarantee that you will gain profits. And it cannot transform you from an office clerk to a millionaire in just one night.

Everybody loses in forex. To put it another way, only one out of three traders will see their capital grow while trading currency pairs. We must establish this early on so you can have a more realistic view of forex trading.

Now we have established the facts vs. myths on the forex market. Let us consider next how people can make a profit from trading. Knowing this basic fact will make it easier to explain how much forex traders make.

For the European Union , this applies to the whole region since the majority of the member countries adopted the Euro as their single currency. In forex trading, you always deal with two different currencies called a currency pair.

It is because the concept of trading is that you buy one currency in exchange for another. Today, the currency combinations can reach hundreds. It is not hard to imagine this, considering that every single country in the world has its currency. Of course, there will be currencies that will get more attention from traders. The US dollar is the most traded currency, followed by the Euro. The goal of forex is to buy and sell currencies to make a profit.

The basic principle is to buy a currency when its value is low and sell it when it is high. When you take a position in the Euro, and its value goes up against the dollar, you earn some profit. This movement in the price of currencies is called pip. A pip is a small number measured up to four decimal places. But if you add these small gains on multiple currency pairs and for a long time, you can get some profits.

Then brokers introduced leverage. It is the use of funds borrowed from the broker so you can increase your trading volume. It is the ratio of your deposit to the borrowed funds. If you use a leverage of , then your profits will increase by 50 times!

Did you see the huge gap? It made your profit bigger in this example. But remember, you can also be in a losing position. If this happens, your loss is also multiplied by 50x. With this amount, you can go bankrupt in a few minutes. It is the reason why some regulators set a limit on the leverage.

In the US, the maximum leverage is at Imagine a leverage as high as 1, or 5,! At the start of this article, we said that forex trading is risky.

And that a large majority of traders lose money in this market. So, a risk management strategy should be in place to protect your hard-earned money from going down the drain. The first step to minimize the risk is to know how much money you are willing to lose per trade. This amount will be your bet size. As a rule, you must never use your whole deposit on a single trade. Doing this is a sure-fire way to lose your money fast.

It is the maximum trading amount that you should place for each currency pair trading that you do. It will allow you to keep a substantial amount in your deposit even if you lose on a few trading positions. Another vital risk management strategy is the stop-loss order. It is an exit plan that forces you to sell a losing trade. Only when it reaches a specific value. It helps to cut further losses on a currency pair if the trend continues to go down. By now, we have established how to make money in forex and how to manage the risks.

Next, we can discuss the three ways to estimate your profits in forex trading. Notice that we used the word estimate since it is not an exact science. The amount of money you can make from trading is different from person to person.

And it is affected by many factors. It includes your amount of capital, risk management strategy, and trading volume. You started trading in April, but you are not a full-time forex trader. You only completed 20 trades and won in 12 instances but lost in 8 trading positions.

So going back to the formula,. The first is your trading volume. Each forex trader will have a trading plan and strategy. Whether you use scalping, hedging, or swing trading, you must remember that these strategies will only work if you put them to actual use. And these strategies are not for one-time use only.

You need to make several trades in a day and on several currency pairs. The name of the game is the frequency or the number of times you are trading. The more times you trade, the more chances you have of winning. Also, if you choose the major currency pairs where the pips are tighter, the potential profits will be small. But when you trade more, you will get higher profits when you combine all your small wins. The other factor to consider is your total investment amount.

The bigger your money, the higher the potential profit will be. Your investment is proportionally related to profit gained. So, the amount of capital that you have in your account directly affects your profit margins. Menu Learn trading Binary Options CFD Day trading ETFs Futures Trading Books Calculators Commodity Trading Copy Trading Order Types Portfolio Price Action Swing Trading Trade Trader Trading Indicators Trading Strategies Options Charts Candlesticks Chart Pattern Technical Analysis Forex Crypto Crypto Exchanges Stocks Broker Platforms Software cTrader MetaTrader 4 MetaTrader 5 Trading Apps TradingView CFD Broker Crypto Broker Forex Broker Trading Accounts Glossary.

How do you make money in forex trading? Why is risk management vital? How can I estimate my profits in forex trading? Win rate. It is the number of winning trades you performed out of all the trading activities you have done.

It takes on a percentage symbol. For example, you just started trading in August and made a total of trades. Out of the , you gained profit in 60 trading positions and lost in the other And this is acceptable. It shows how much a trader is willing to risk in reaching the desired profit number. In other words, it is the expected reward earned for every dollar at risk.

It is also called the profit to loss ratio. It is a combination of the first two methods. It is defined as the predicted profit in the long run for each dollar you risk.

I would recommend taking a look at our compiled list of the best forex trading courses. Day Trading Risk Management. What time does the trading day start on the forex charts? It tells you how wealthy you will be if you follow the same track consistently. First, it is the market with the highest trading volume.

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