How Much Do The Best Forex Traders Make?
- 1 Best Forex Traders: Looking at the Numbers
- 2 Determining which factors are related to business performance
- 3 Examining how professional traders differ from others
- 4 Top Forex Indicators Top Traders Trust
- 5 Economic events followed by top traders
- 6 Managing your emotions and overcoming fear
- 7 Rising to a position as a top trader
There is serious earning potential at hand when you choose to trade currency, something every investor should try to unlock. Looking at the scale of Forex trading, it is certainly worth knowing not only what top traders are doing, but also how they are doing it and how top traders differ from the rest.
While most Forex traders take advantage of their free margin to maximize their trading power—hence, their earning potential—margin trading is just one aspect of their success.
What is free margin in Forex? Basically, it is the amount of capital available in your account to open a position using the borrowed margin offered by your online broker.
Again, this is just a characteristic of high-yield traders. Here are some of the other traits that are common among the best Forex trading professionals in the world.
Best Forex Traders: Looking at the Numbers
While everyone's Forex trading experience differs, if you are looking at the true upper echelon of Forex traders, you will see that the percentages being achieved yearly and monthly are truly astounding.
Most traders will look at their margins on a monthly basis, and it would not be surprising to see a professional trader generate a profit of between 5 — 15% per month over the course of a year, with a few slightly less profitable months spread between them…
With this in mind, with an average monthly profit of 10% over a year, a top trader would generate a total profit of 120%.
This would mean that $100.000 in total capital could be converted into $220.000 for a profit of $120.000. This is just one example, but top Forex traders tend to earn six figures (or possibly more) a year, with the above explanations explaining how this can happen.
Determining which factors are related to business performance
How much capital you have will have a direct impact on how much you can earn when trading Forex.
As you saw in the example above, the biggest earners are able to play the percentages and generate big returns because they have a lot of capital to work with.
You can build things up slowly, but great capital is intrinsically linked to the best traders for a reason.
master the use of leverage it is also important for anyone who wants to be successfully ranked as a top earning trader.
When used, this means you can trade with more capital than you actually have. The use of leverage in any capacity is linked to your attitude towards risk.
If you want to use leverage on a large scale in an attempt to increase your profit levels, you will need to take greater risks, which can result in both negative and positive account fluctuations.
Finally, the currencies you actually trade will have a huge influence on your profit and loss levels.
Some coins are slow-burning, which makes them a favorite for beginners and high-volume traders, while others have a true “pop” which means volatility, risk, and potentially higher profits when trading them.
Examining how professional traders differ from others
It's been said before, but it's certainly logical: professional traders make up 1%, while casual traders make up the other 99%.
This is because professional traders approach the market in a distinctly different way than casual traders. As you look at how professional traders differ from the rest, you will find that a lot of it comes in the form of mindset and focus…
Casual traders are known for not being selective when entering trades, showing impatience.
They also have a history of letting emotion, fear and greed take over, straying from what could be a good trading strategy.
Casual traders can certainly turn a profit — in fact, many do — but letting the heart rule the head, as well as always looking for the next “quick fix” position in the market, often hurts performance.
When trading Forex at a professional level, patience and discipline are unequivocally key.
The best traders understand the damage that emotion, fear and greed can do, so they don't hit the panic button when they see volatile price movements.
Undeniably stubborn at times, they cling to a system and follow a business plan.
Instead of jumping on every common trend that appears, buying and selling in the blink of an eye, they gauge their success or failure based on a series of trades rather than a single individual trade…
The above is just the tip of the iceberg when it comes to what professional traders do differently than the rest.
But as you can see, mindset is what allows the best traders to succeed and undoubtedly gives them an edge over others in the Forex market.
Top Forex Indicators Top Traders Trust
While top performing traders can be expected to rely on obscure indicators that have guided them to impressive success, the indicators featured in these strategies tend to be remarkably common.
You may already be using some of the indicators that are a favorite of these world-class traders, largely because the reputation of these indicators and their accuracy over time has been proven to both top traders and the Forex trading community alike. general.
Here are some of the top indicators used by top Forex traders:
Moving average: Top traders use the moving average for a variety of reasons. First, moving averages can be customized to assess different timeframes for a currency pair, providing flexibility to match the trading window under consideration.
A moving average it is also easy to combine them with other indicators to see if these indicators support the trends suggested by each other. And with over 100 years of use in currency markets, the moving average has a large body of evidence that its indications are valuable.
Relative Strength Index (RSI): Developed in the 70s, this is one of the most popular oscillators because of its value in reflecting the strength of an emerging trend.
The best traders use this not only to identify entry and exit positions, but also to calculate when and where to place as they seek to maximize profit and minimize risk.
Bollinger Bands: Bollinger Bands were first developed in the 80s and have since become a staple indicator for Forex traders of all experience levels.
While Bollinger Bands are an accurate measure of a currency pair's volatility, the true value of this indicator lies in the way it adjusts to changing market conditions, providing more timeframes and price data that traders can use. to make informed and responsive decisions.
Exponential Moving Average (EMA): Similar to Bollinger Bands, the exponential moving average (EMA) for a currency pair maps the volatility of price changes, while averaging that volatility to clearly illustrate price trends and without giving too much weight to extreme prices.
The EMA is easy to plot and interpret, making it popular for Forex traders of any experience level, and it can be adjusted for different timeframes depending on the type of trade and period of volatility you are interested in analyzing.
Fibonacci Levels: While many Forex experts question the reliability of Fibonacci extension and retracement levels as an exact Forex science, top traders are always paying attention not only to the price action of a currency pair, but also to the trading activity around it. of those positions.
Given the widespread use of Fibonacci levels, high-level traders are more likely to play a psychological game in which they predict price action, anticipating how traders will act based on these levels. support and resistance.
While these indicators can be useful in developing your own trading strategy, it is important to keep in mind that no world-class Forex trader has made his fortune with one or two independent indicators.
Instead, high-performing traders have built their success by developing a valuation strategy that utilizes multiple indicators along with other relevant Forex data, including global economic news.
Economic events followed by top traders
Technical indicators are just one way to assess the trading opportunities of top traders. Economic events are also crucial to follow, which is why you see many of the top Forex traders displaying extensive knowledge of geopolitical and economic activity.
The more you understand global events and their impact on currency value, the more prepared you will be to take advantage of this news to maximize profit potential. Here are some of the top economic events to follow:
Gross Domestic Product (GDP)
GDP reports are one of the best ways to get a picture of a country's economic activity. These reports often have a significant impact on how traders, in general, will value a particular currency, so major traders will assess GDP not only to understand the strength of this country's currency, but also how other traders might react.
Non-farm payroll report
Experienced Forex traders are always looking for economic information that could indicate changes in price levels in Forex. One of the best sources of domestic economic data is the US Non-Farm Payrolls report.
This monthly report provides key insights into economic trends shaping the US economy, which may affect currency pairs and currency account balances.
The most important data found in the Non-Farm Payroll report includes overall US payroll numbers and the unemployment rate, among other factors.
Jobs reports are another simple indicator of economic activity, as jobs tend to be highly correlated with economic health. In many cases, the decline in jobs can be a harbinger of more economic conflicts to come, which can trigger a decline in the value of the currency.
Consumer Confidence Index (CCI)
The ICC is a metric that quantifies consumers' confidence in their own income and in the economy as a whole.
This metric can help leading traders understand economic conditions based on information that may not appear in other economic reports.
If a country's consumers are being more cautious with their money and cutting back on spending, there's probably good reason for the push.
Managing your emotions and overcoming fear
Perhaps the biggest pitfall of amateur traders — aside from a lack of market knowledge — is the risk of making trades based on an emotional rather than a rational response.
Forex traders invest a lot of time and energy in developing a trading strategy that takes an objective, data-driven approach to analyzing trading opportunities.
But when you allow your emotions to take over — ignoring signals that you should exit a position in hopes of chasing more profits, for example, or making a reckless trade in an impulsive effort to recoup your losses from a past trade — you you can end up digging yourself a much deeper financial hole.
Top Forex traders have learned how to avoid impulsive decisions driven by emotional and fear-based trading.
They achieved this by developing a rigid strategy for evaluating trades without any emotional input.
And they trained themselves to follow this strategy despite their strongest emotional urges to pursue potential gains based on a hunch.
This emotionless approach to Forex trading is something every professional trader should strive to achieve.
Rising to a position as a top trader
If you've spent time on Forex trading but haven't exactly found your account overflowing with profit — or simply wondered, "What's next?" — then it's worth taking the step into a professional negotiator position.
Anyone who wants to trade professionally needs to understand that it's more or less a full-time commitment. The importance of monitoring the markets cannot be underestimated.
In addition to a mindset shift—which will take time—you also need to be willing to change your business approach.
Any professional trader can implement the basics better than most, but what this should be used for is a foundation, not an end goal.
More complex trading systems and strategies are generally considered beyond the reach of a casual trader, but professional traders will know how to implement them at will.
Research, education and practice can help you adapt to advanced level trading systems that can transform your success rate in Forex trading.
Other factors any casual trader with professional trading aspirations needs to address include profit reuse, investment capital levels, and risk management practices.
Taking the position of a high-level negotiator is certainly plausible, but by no means is it something anyone can take lightly, as it can be a very intensive process.
The best traders can earn six figures a year or more, but it doesn't happen by accident.
The reason this group of operators is able to reach these levels is that they approach the market differently. So if you want to start earning the same as the best traders, you must be prepared to build, change and revise your Forex trading efforts.
What is the XM Forex Broker Loyalty Program?
[box_text] Forex XM Broker Loyalty Program - Trade and earn XM points that…
The Four Trading Signals You Need to Master
When it comes to the scope of Forex trading, it is very clear that all traders…
How to Open a Demo Account at XM Broker
[box_text] This lesson is dedicated to explaining how to create a demo account on the Forex broker…
Trading Psychology: Profit Targets in Forex
[box_text] Closing a trade at the most favorable price level is just as important as entering…
Beginner Traders Guide (HK50)
[box_text] If you have never traded the HK50, you may be missing a great opportunity to capitalize…
Forex Hedging (Hedge)
[box_text] Investors of all types use hedging as a strategy to protect…