Can Forex Trading Make You Rich?
More and more people are becoming aware about forex trading with each passing day, most of whom catch themselves thinking whether or not they should give it a shot. After all, maybe they will get lucky. One of the first things that comes to mind then is “How much money can you earn on the Forex market?” Unfortunately, there are no exact answers. It all depends on the circumstances: the state of the market, the skill of the trader, the size of the deposit, the accuracy of the analysis and many other factors.
Traders who have already tried their hand at trading and could not achieve anything usually convince themselves that no one else can do it either, since they have failed, and begin spreading the word. Naturally, they are very upset. They believe that the market, the broker, something or someone else is to blame, but not themselves. On the other hand, more conscious traders have begun to arrive at the market. They are not trying to look for “freebies”, but to put in some seriously hard work. They understand that they themselves are the ones to blame for failures, just as they are to be proud of themselves when experiencing success. Some people quit a few days after they open a forex trading account simply because they lack the patience for commitment. How you approach this market, the attitude with which you come at it will be a very decisive factor.
“Can forex trading make you rich?” is a question you need to be asking traders that have been at it for years, not those that lost their money after a few weeks. Of course, what you will hear as your answer is a definite “yes”, even if the current state of their financial affairs is not in their favor. Veteran traders are well aware of the reasons for their current failures and will make every effort to ensure that similar situations do not happen in the future.
How Much Money is Typically Made?
In international practice, professional asset management organizations, like various investment funds, show an average annual return on each invested dollar in the amount of 15-20%. The most successful – 30-40%. These numbers can be considered as a benchmark for traders to understand how much profit they can receive. Don’t forget though, that 10% profit from $10,000 is a lot more than 40% profit on $1000. According to the latest statistics, the currency turnover on Forex is an estimated $5 trillion per day. This makes the foreign exchange market the biggest in the world. Given the dynamics of trade in this market, it is predicted that in 5-7 years the turnover will likely increase up to $10 trillion. So do people earn money on Forex? They definitely do.
The Importance of a Trading Strategy
Good market conditions and sufficient start-up capital will not save traders from losses if they lead an ill-conceived and unbalanced trade. Therefore, each trader should develop their own trading strategy and stick to it in their work. Having your own trading strategy is what any trader needs, whether you are a beginner or an experienced veteran of the trade. A trading strategy is your set of personal trading rules that take into account your knowledge of the market, the current state of affairs on the market, and your position on risk-based profitability. A strategy will give you an understanding of what goals you are pursuing, how you plan to achieve them, and how to act in critical situations.
It is important to remember no one will be able to teach you in a single article or video what experts study for years. Experienced traders will never reveal all of their secrets that help them make a profit. You can study forex trading algorithms all year round and still not see any substantial progress. This is a platform where anyone can become successful, just as much as they can fail. It is best that you do not start trading until you study the theory in detail and learn how to earn money using a simulator. Forex is very tough on unprepared beginners and can deprive you of your money in a matter of minutes.
Observing and Studying
It is mandatory to learn and practice via trial and error in order to be able to consistently make a profit from trading on the Forex market. It is difficult for beginners to start earning immediately. Gaining experience in the trade practice takes time. To facilitate your entry into independent trading activities on the market, you can use services that copy other traders’ transactions that are more experienced and successful. Monitoring other people’s trade deals will let you make similar transactions by applying their strategies. Copying those transactions will help you lock in some immediate income.
In the event that you are not confident in your abilities but have money to spare, you can put your funds in a trust. There are a lot of experienced traders on the market who offer their asset management service. While you provide the initial investment capital, they are the ones on the frontline doing all the trading.
Summarizing everything above, it should be noted that no one will give you direct instructions on how to make money on the Forex market. However, complying with the rules of money management, market analysis, having a trading strategy and a reliable broker will significantly improve the odds of you making a profit on the market. How and how much you earn depends only on you. Now that you know how forex trading can make you rich, the question is whether or not you’re willing to commit your time, effort and money for a shot at the good life.