The most obvious answer to this question is ‘earn as much as you want’ or ‘look at your current income, decide if it meets your needs, and aim for the same level at the beginning of your trading career.’’. Yet, there are fine-print conditions that apply to this simple answer.
First, being a forex trader stock brokering on Forex is as much a skilled and complex job as, say, being a surgeon or an airliner pilot. You have to learn a lot and immerse yourself in this work. You cannot log in once or twice to the trading website, click a button, and reap the cash. No, if you want to earn, you’ll have to treat it as a full-time job.
Second, unlike in the salaried job, no one guarantees that at the end of the first trading month you get the salary mentioned in the contract. At the end of the day, you will get as much or as little as you earn by trading.
Third, you cannot earn a significant income with little capital. If you want to earn a lot, you’ll have to invest a lot, to begin with. Yet, while you learn to become a trader, it is reasonable to start slow and risk small sums. Hence, your income will not be sufficient enough to support your daily life.
But these are only generalized assumptions about trading on Forex for a living. Are there more accurate and predictable ways to calculate the potential income and how it fits in your trading expectations? Yes, there are industry standards that apply to Forex as well.
The universal formula of actual earning
As you may read in any guide to stock trading, an experienced day trader will earn somewhere between 5% and 15% of the sum they invested. So basically, after closing monthly trade, you end up with the sum you had on your account plus this percentage. If you know how much you want to earn or need to earn to cover your expenses, you can calculate how much you need to invest. It may not look like the most promising way to get rich, but you have to start with little amounts to learn to trade successfully. Then you can increase your investments and reap more income.
If you are already an experienced day trader, you can apply leveraged trade to multiply your investment with the help of borrowed funds. If you trade successfully and close the deal in time, you’ll get tripled revenue (compared to the one you could reap from your own money). Besides, you return the leverage funds to owners without stress. But if you fail, your losses will also be tripled. So, that’s a risky tool.
The rainy day fund
If we speak about making a living off the trade, you should start trading with the reserve fund that will keep you afloat while you learn to ride the markets and make money. You won’t start living off the trade immediately. It would be outwardly wrong to promise you the immediate reward. So while you navigate this complex and interesting universe of forex stocks and prices, you need money to live. Three to five months’ salary equivalent is a minimum to keep you going. Then you will start seeing the first financial results of your trade.
Your attitudes towards Forex trade as an occupation
This all is not to say that you cannot make a living on Forex. You can do it perfectly, but if you approach it responsibly like you approach your nine-to-five job. You have to learn the basics of theory, practice, and again practice, and then start risking small sums, before you try and risk big.
Besides, you need to have a mid to long-term plan of trading. It will be your business plan. If you have this plan and follow it instead of dispersing your efforts, you’ll face lower risks and will win more in the long-term perspective.
So, all in all, you can earn on Forex as much as you want – if you know how to do it and what actual returns on your investments will be. We hope we answered these questions for you. The best of luck!