Many people dream of making significant income trading forex, yet many fail to recognize all of the responsibilities involved. From finding an appropriate time frame and strategy for yourself, to cultivating patience and discipline – becoming a successful trader takes hard work – but if you put forth the effort necessary you could potentially earn significant sums from forex trading. In this article we’ll look at realistic earnings potential from trading forex as well as highlighting key aspects you should keep in mind for success.
How much you can make as a trader depends on the trading expectancy and size of your position. With a strategy that wins 70% of time with a 1 to 3 risk to reward ratio, you could expect to make around 20% annually from trading – not much by way of profit, but still enough to provide you with a decent living as a trader.
Forex trading profitability depends on a number of other factors, including portfolio size and taxes. Your portfolio size influences diversification and how much profit can be realized from market fluctuations; in addition, depending on where you reside you could be subject to various taxes that vary by country and any fees and commissions associated with trading – typically these fees vary based on what kind of trades you conduct.
Reinvesting profits can increase your earning potential dramatically by compounding them over time. Trading should be treated like any business; setting aside a portion of profits each month and managing risks appropriately should also be part of your trading routine. A good plan should include when to sell and when to buy as well as protecting yourself with proper position sizing and stop losses to protect you against risk.
Aspiring to become a five figure trader isn’t impossible, but it takes hard work. To do it successfully, treat trading like a business and not as an opportunity to get rich quick scheme; take your time learning about your trading style, markets traded in, your own strengths and weaknesses as well as profit goals; this way you’re more likely to achieve them and avoid feeling let down or burned out later on. Instead, aim for modest goals such as 10% per quarter or year as this provides more realistic expectations that won’t leave you feeling let down or disappointed should your target goal not been reached; setting unrealistically high goals will only lead to disappointment later on if not reached; instead aim for more attainable and sustainable goals that will allow you to avoid feeling burned out before reaching those lofty lofty targets set ahead of schedule if necessary!