Can You Get Rich by Trading Forex? – Honest Breakdown
Forex Trader Salary: How Much Does An Average Currency Trader Make?
A forex trader is a person who trades in currency pairs on the foreign exchange market. Currency traders can be professionals who are employed by a big firm or amateur traders who view fx trading as a hobby or as a side business that can help them earn some extra money.
Forex trading can be a lucrative venture as people have been known to make millions of dollars by trading on the financial markets. These Forex traders have perfected their craft over the years by researching and practicing their strategies consistently.
With Forex trading, it is possible to make a huge amount of money like the big traders but how much these traders make is often left to speculation as only a handful of people are completely transparent about their total earnings
Trader salaries can be different from trader to trader depending on their level of skill, their account size, the various strategies they have in their arsenal, and their risk management techniques.
With that being said, it should be noted that you cannot compare yourself to these professional traders from a beginner’s position.
The Forex Market and How It Works
The Forex market is said to be the world’s largest trade platform which is open to everyone. Trades worth more than $5 trillion are conducted every single day on this immense decentralized platform.
The main trade centers of the Foreign exchange marketplace are situated in New York, Tokyo, and London. These centers are open in such a manner that makes it possible for the international marketplace to run at every hour of the day throughout the year.
Countless people trade in a variety of ways on this huge platform such as trades in precious metals, crude oil, agricultural commodities, and currencies.
In Forex trading, people trade in currency pairs. The value of one currency is quoted against the other. The most famous currency pair which is known by every trader is the EUR/USD pair as it is considered to be the most liquid currency pair on the Foreign exchange market.
The Challenge Forex Trading Poses
Simply opening up a trading account and commencing Forex trading is not the way to start your career as a Forex trader. Time has to be invested in researching the topic thoroughly to be able to draw a handsome salary.
Before you even start trading, you have to consider what your expectancy is, how much capital you are willing to invest versus how much capital you can raise, etc.
The possibilities for a currency trader can be endless but those possibilities need to be gauged carefully for the trader to achieve success in the long term.
One of the biggest risks that fx trading poses is the risk of leverage. Currency trades are said to be highly leveraged which means that you make large trades from an insignificant amount and conversely you can also lose a large amount of money which are not limited to the deposit you’ve made.
The Average Forex Trader Salary
Traders employed by a firm can draw handsome salaries. In the United States, the average forex trader salary has been estimated to be around $68,487 per year with the highest salary set at $171,144 per year and the lowest fx trader salaries at $51,972 per year.
People also trade independently without being employed by a firm so they don’t earn a salary because they trade whenever they have the time to. Amateur traders even have the luxury of trading without depositing any amount which is provided by various brokers in their subscription.
However, it is recommended to have at least $500 as a starting point for your trading ventures as an independent currency trader.
A Good Career Choice
An entry-level job as a Forex trader that requires less than a year of prior experience in the industry can allow you to draw an average forex trader salary of $60k per year.
Trader salaries of people with an experience of 5-9 years as currency traders are expected to make $100k per year and fx trader salaries of someone with more than two decades of experience are expected to earn around $130k per year.
With these trader salaries and numbers, it can be said that currency trading is one of the most lucrative careers out there.
How You Can Become A Forex Trader Yourself
Becoming a successful fx trader requires time, patience as well as a disciplined and focused mind as there is a lot to learn about the subject. To start, you need to grasp a bunch of concepts such as the trading capital. Always trade the currencies that are fit for your trading style and start small in the initial stages.
Educating yourself is the most crucial step of the entire process. Always use a demo account that comes with several online broker platforms as the demo account gives you all the features of a real trading account without asking you to invest a single penny into it as everything is done virtually.
You can find a good and trustworthy Forex broker that can offer you competitive trading options so that your skills have room to grow. Ensure that the broker you choose offers you features like negative balance protection, round the clock support, and the latest cutting edge trading platform.
Set Your Goals
Having a game plan is vital for your success. Several books have been written by experts and trading gurus that are written in a simplistic manner that can be understood by any beginner.
These books and materials have all the necessary knowledge and tips that have been refined from the years of trading experience the respective author has accumulated over the years.
In addition to that, there are several other forms of educational materials that are provided by various entities such as trading experts who speak about their experiences over any platform, video materials, brokers that provide educational materials and tutorials, and platforms such as Forex Factory which is a huge help for traders who are looking for educational materials on the subject.
Forex trading is a good and lucrative career choice for people who are interested in money, the financial market, stocks, etc. Therefore, if you believe you have what it takes to be a successful currency trader then dive into the subject, research it well, and practice your skills.