Millions of people from all corners of the world have started trading Forex during the last years. The pandemic year 2020 was particularly suitable for Forex business growth for retail traders and brokerages. So it’s evident that foreign currency trading holds many opportunities and could positively impact your personal finances. Of course, in case you know how to do it right. Let’s see what it takes to become profitable in foreign currency trading and reach consistent money flow from it.
How much money can one earn from Forex trading?
On average, a dedicated Forex trader can reap profits ranging from 5 to 15 percent every month using the leverage.
Also, many seasoned traders at some point start making money from selling trading signals if their trading success shows verifiable track records.
Of course, your profit depends on many factors, the most important being starting capital, leverage used, the strategy implemented, and many more.
However, if you are a newbie, the measure of your success in the first couple of months would be the ability to minimize the losses. Insulating your account against sudden market downturns should be your primary concern.
Have realistic expectations
Yes, the Forex market can change your life in a positive direction. But before showing you how we need to strike you with a cold shower. Almost two-thirds of Forex traders don’t reach the level of making consistent profits from their trades.
The main reasons for this adversity are unrealistic expectations. Although Forex is quite easier to navigate than other financial markets, it’s certainly not a way to get rich quickly.
Start cautiously, with baby steps
Due to the exaggerated expectations, new traders are prone to hasty solutions that usually change their odds for the worst—for instance, throwing all the savings into the trading account, hoping that all will turn into profits, or going for the first brokerage that pops up as an advertisement.
Step one – learning
Instead of rushing your decisions, invest some time in learning the rope of the Forex market. Research the perks and downsides of currency pairs you would like to trade.
Currency pairs’ prices are affected by a multitude of economic data and events. Make sure you know how to grasp them and implement that information into your trading decisions and strategy.
Step two – a trading plan
Create a trading plan that will serve you as a road map for your trading decisions. Outline at what conditions you will enter and exit the market, how large a position you will take, and how much money you can afford to lose daily/monthly.
You should absolutely avoid the temptation of throwing all your savings into the trading account. Therefore, having a specific amount of capital solely dedicated to trading on Forex is ultimately important.
Step three – choose your broker wisely
And finally, last but not least. Choose your Forex broker with particular attention. Many newbie traders fall into the two-thirds Forex trading losers’ category because they opt for a bad trading intermediary.
Most of them get scammed or choose the broker that cannot match their needs in terms of efficient customer support in their native language, too few trading assets available, or poorly customized trading account types.
With so many great brokerages out there, take your time to pick the one that suits you the most.