‘How much money can I earn in forex trading?’ Every person has asked this question before he or she enters forex trading.
There is no denying that you have surely asked this to yourself along with a sea of questions. And when these questions are not answered, you will feel discouraged until you come to the conclusion that trading is not for you. Well, let’s start with the most asked question: How much money can you earn?
There is no shame in asking questions. We are just humans with a mind full of questions and curiosity. It’s natural and basic biology. After all, it’s how we got interested in forex trading in the first place, right?
Surely, you have heard of people making millions trading in forex market. Yes, people can make a huge amount of money in trading. But does that answer your million dollar question? Well, not exactly.
Here’s the thing. We all know that our goal in trading is to make a profit. Forex trading is not about making you rich in a blink of an eye. It won’t magically turn your $10,000 account into a $1 million account. If that’s the answer you’re looking for, then we hate to burst your bubble with the truth as sharp as a dagger.
But wait; let us not make ourselves feel discouraged from this cold, hard truth. There is always a light at the end of the tunnel.
You have to remember that you can’t compare yourself to them. Just like all the people in the world, everyone is unique, including you.
What makes you unique from all of them is you’ve got different account size, risk appetite, risk management, trading strategy, and many more. You are not Warren Buffet or any other famous investor. But there’s one thing that makes you similar to him, and that is starting out small.
Before we go any further, it’s essential to learn first the basics of forex trading if you’re just starting out. This can essentially help you out in the long run.
Going back, there’s no secret on how to make money in forex trading. There are various forex strategies and different methods you can apply such as moving average, relative strength index, oscillators, and many more.
But why do people still fail in trading?
There are many factors on why traders don’t make much profit from what they initially expected. These are typical for beginners who expect to make 50% profit every month.
One of the factors why traders lose all their money is greed. Most beginners have unrealistic profit expectations. They think it’s easy to make 25% to 50% or more in just a month. They expect that they could turn their small account into a big fat account in just a few months.
If it is possible, then everyone should be rich by now. Believe it or not, successful traders make a lower average monthly profit like 3% to 7%. But if you’ve averaged 10% or greater for more than a year, then why are you still reading this article? You’re already on your way to reach your goal!
Consider this: if you could sustain a 10% average monthly profit, then that could more than triple your account every year. If you’re averaging 6%, then that could more than double your account every year.
Now if you’re starting with $5,000, and averaging only 3% per month, your account would grow to a whopping $170,000 in 10 years!
Overleveraging has always been the common culprit of why traders lose their money fast.
If for example, you have two doors. One of these doors can win you $2, but the other door can lose you $1. Of course, you’d still pick a door. Not just once, but maybe thrice or more. After all, you’d only have 50/50 chance of earning $2 or losing $1, and you’d still risk it. It’s an opportunity of making easy money you certainly wouldn’t want to miss.
Let’s use the same doors again. But this time, one of the doors can triple your net worth, but the other door can lose every bit of money you have. Would you still pick a door? If you understand the risks in forex trading, you should already know by now that picking a door shouldn’t be an option.
This is how traders treat their accounts. They’d think that putting everything on the line would give them the money they want. But instead, they’d lose all their money.
The best thing to do here is using effective strategies. We all know that our goal here is to earn money, but try not to focus on how much money you’ll make each month. Most traders don’t use this goal. They’re entirely focused on how much money they’ll lose in each month. If they protect their capital and follow the process, profit will then follow.
A basketball player doesn’t just shoot the ball and win. Sure, it’s the primary goal of a player, but his focus is more about how he will drive the ball to the basket, what’s the best plan to use, or how he would defend his court.
It’s the small things that make a huge difference. If you’ve practiced your strategy for years, you can only guarantee to win.
So, there you have it. There’s the answer on how much you can earn money in forex trading. You can earn thousands and more as long as you have the discipline and strategies. You can also apply several trading styles such as day trading and swing trading.