How Much Can You Make Trading in Forex in 2021?

How Much Do Forex Traders Make?

The nature of Forex earnings is that the income level is not fixed and earnings depend on many factors. However, don’t be discouraged by that statement because you can certainly make good money in the Forex market. Moreover, you can make really good money like the Chinese trader Chen Linkuy, who started with a deposit of $100 and, in just a few weeks, had profited $100,000.

Linkuy obviously used tremendous leverage and clearly violated the rules of money management using extremely high-risk strategies. However, this is not an isolated case, but just one of the few that has been made public. On the Internet, you can find many similar stories about how people earned $1,000, $10,000, and other significant amounts at Forex, starting from scratch. However, Linkuy’s level of income is rarely written about, for the obvious reason that high earners at any activity tend to avoid publicity, and publicity often leads to tax audits.

Deposit amount, leverage, currency instruments used, trading platform functionality, competent trading strategy, and successful risk diversification are some of the basic parameters that determine a trader’s earnings success. However, Forex is a global exchange market and is therefore subject to global trends. Therefore a successful trader needs to know what is happening around him locally and around the globe. George Soros is a good example of someone who keeps abreast of world economic and financial conditions. In 2012, his Forex traders began to work with only one currency pair, the American dollar/Japanese yen because of the re-election of the Japanese Prime Minister Shinzo Abe to a second term.

Abe immediately determined a strategy to depreciate the national currency, and according to his devaluation program, in two months the yen collapsed by 25% as against other world currencies. European players were outraged and demanded total financial war against Asia. Soros’ trades followed the trend — betting only on this currency pair, and taking into account the laws that were adopted on the initiative of Shinzo Abe. As a result, Soros earned more than $1 billion only for this currency pair.

Once again, this is not an isolated case. As the volatility of trading instruments at the Forex market is extremely high, and it depends not only on traditional economic factors but also on keeping up on the news and market trends. People who do this well are becoming known as the so-called "mood of traders".

Well, of course, the examples of Soros and Linkuy are more an exception than a rule. In 2021, a successful novice can earn around $100 a day at Forex, provided that: his deposit is at least $200, he trades using the EUR/USD currency pair, with leverage of 1:100, and uses a successfully aggressive strategy. The larger your deposit is, the larger your profit will be. In theory, if your deposit is $10,000, then you can earn up to $5,000 a day. However, this is not dogma or law, it is only a roadmap, and it is reserved for a very aggressive strategy. Professionals, as a rule, do not seek to earn more than 5-10% of their deposit per day and avoid taking risky steps.

How Much Money Do You Need to Start Earning in Forex?

The profit at the Foreign Exchange Market is usually calculated as a percentage, and not in specific dollar amounts. Moreover, the percentage of a profit for each category of traders has its own subjective indicators of assessment. Thus, novices consider 1% per day to be a very small profit, while traders of the leading world banks who control huge deposits consider the same 1% to be a huge profit.

Earnings are also directly affected by the leverage and the number of lots that a trader holds per day. The risk increases as the leverage is increased because the leverage and the profit grow (or deflate) proportionally. We will return to this aspect when we consider the main mistakes of novice traders. However, the player who takes his first steps at Forex is always most concerned about the question: How much do I need to invest to acquire reasonable earnings?

To help you find your way around this issue, we have calculated the options and compiled a comparison table that shows the possible earnings at Forex, taking into account the use of a moderately aggressive strategy.

$10

eur/usd

1:100

3–15 eur/usd

$500

eur/usd

1:100

150–750 eur/usd

$10 000

eur/usd

1:100

1000

3000–15000 eur/usd

Deposit ($)

Trading Instruments

eur/usd

Leverage

1:100

Volume (lots per day)

Possible income

3–15 eur/usd

Deposit ($)

500

Trading Instruments

eur/usd

Leverage

1:100

Volume (lots per day)

Possible income

150–750 eur/usd

Deposit ($)

10 000

Trading Instruments

eur/usd

Leverage

1:100

Volume (lots per day)

1000

Possible income

3000–15000 eur/usd

Please note that the ideal conditions coupled with an extremely risky strategy, are considered here. That is, a trader places into play a very large amount of money, uses the maximum leverage, and his predictions are fulfilled in the vast majority of cases, as it was with Chen Linkuy. However, this rarely happens in real life, and the above table should be considered more as a theoretical guideline on how much you can earn at Forex in 2021.

Conclusions!

The two main factors affecting a trader’s earnings are the size of the deposit and the amount of leverage. The success of the predictions and the correct assessment of the general economic situation in the world are also of conceptual importance. These components are directly related because it is by analyzing the state of the world market that gives the trader the knowledge and insight to make reliable market predictions. However, in any case, the actual earning is governed in large part by the size of the deposit. That is, the more you invest, the more you can get.

How to Earn Money in Forex Trading?

You have now seen stories of wild earnings. Now is the time to stabilize your earnings each month to avoid the see-saw effect of “bust to boom”, which is never desirable for long-term money management or for sustainable passive income.

Earlier, we noted that it is impossible to receive a fixed income at the Forex market. However, “fixed” is not synonymous with the word “stable”. It is very possible to receive a regular permanent profit, and that is the goal of every novice trader. It is income stability, among other things, that distinguishes a professional from a novice. As for the factors determining the stability of Forex earnings, here are some things to be mindful of:

Choosing a broker

Experts are sure that selecting the right broker is almost half the success. The trading instruments that the manager/broker uses, the amount of leverage, the types of accounts, the opportunities for risk diversification, etc., all depend on a broker’s expertise in the Forex markets.

Deposit management

It is not recommended for novices to use large leverage or expose their entire deposit. A deep calculation of risks is needed so that in case of a failure you always have enough funds in your account to continue active trading.

Minimization and diversification of risks

Working with several trading instruments, opening several lots at the same time, obtaining relevant market analytics, using PAMM portfolios, and not a single PAMM account when investing. The Forex market provides a lot of opportunities to reduce risks, and you need to use all (or most) of them for stable earnings.

Predicting

Constantly correct predictions are the basis of stable Forex earnings. Predictions are made based on the market analysis, charts, and tables for specific trading instruments (these tools are often provided by brokers themselves). Also, you can focus on the top signal providers.

Psychological readiness

A trader must clearly understand that any of his lots can not only win but also lose. He must be prepared for the fact that several lots in a row can lose. Risk preparedness and psychological stability protect against rash decisions.

Of course, you need to take into account the specifics of the trading instrument with which you work. For example, let’s step away from the classic currency pairs and take the oil trade. Here, the traditional currency markers do not matter because oil traders are guided by three sources: EIA (report of the US Energy Information Administration), API (oil reserves data from the American Petroleum Institute), and Baker Huges (report on the number of operating drilling sites). Their information is updated throughout the day but is useless for trading in other Forex instruments, such as US$/Eur. However, it is impossible to make money at oil trading successfully without these three sources.

Stories of Successful Forex Earnings

The potential earnings at the Forex market in 2021 are unlimited, and the basic mechanisms for implementing trading strategies are similar to those that traders used a half-century ago. To demonstrate, let's take a trip into the past to see some examples of extremely large profits and highlight key episodes in the history of the world currency market.

Bruce Kovner - Over 87% per annum for 30 years

Unlike Krieger and Soros, Kovner did not make a one-time multi-million dollar or multi-billion dollar transaction. However, he is the only trader in Forex history whose annual profit has not dropped below 87% for more than three decades.

Whereas, he began with the supplies of soy, investing $3,000 in borrowed funds in them. A year later, when he had already earned $45,000 in profits, Kovner switched to short contracts on Forex. His first bets related to the spread in the copper futures, and then, taking all the known methods of risk diversification as the basis of his strategy, Kovner switched to trading classic currency pairs.

At the moment, Bruce is a billionaire and is in the TOP 100 on the Forbes list, being one of the leading traders in the world. Yes, he is already 75 years old, but he still trades. What is interesting, unlike Krieger and Soros, Kovner does not have a formal education in economics or finance. Kovner studied political science, which does not relevant to his success in trading.

George Soros is the man who brought down the Central Bank of England

In 1992, England was a part of the ERM (this is a single exchange rate mechanism that works as a part of the European monetary system). According to this mechanism, if the pound depreciated relative to the German mark below a certain value, the state was obliged to join the process of stabilizing the national currency.

Soros successfully predicted that general economic factors (including the high level of interest rates in the country and the unfavorable rate when the UK joined the ERM) would make the Central Bank of the United Kingdom vulnerable. Therefore, over several weeks, Soros’ Quantum Fund built a large position in the sale of the pound sterling. During this time, the English bank realized that due to the mismatch in the level of interest rates, it had to buy back pounds, according to its principle tradition.

However, when on Wednesday, September 16, 1992, the Central Bank of England began actively buying up billions of pounds, it turned out that their price was not changing very much due to the speculation of Soros and the activity of thousands of other traders who followed him. As a result, the UK withdrew from ERM, the pound fell by 15% relative to the German mark and by 25% relative to the US dollar. George Soros earned several billion dollars on that so-called “black Wednesday” (the exact amount has never been announced).

Andy Krieger - New Zealand's Nightmare

On October 19, 1987, the Dow Jones Index sank by 22.6%, and everyone began to invest in a wide variety of assets in search of a more stable option. At the time, Andy Krieger worked as a trader at the Bankers Trust and realized that under those conditions “everyone [was willing to invest] in [any]thing”. He reasoned that it would be wise to determine one or two revalued national currencies and trade them against the US dollar.

Krieger selected the New Zealand dollar and invested $30 million. Using the leverage of 1:400, he opened a short position for an amount exceeding the money supply of New Zealand at that time. Since the Central Bank of the country, of course, was not ready for this, the New Zealand dollar exchange rate immediately fell by 5%. Andy Krieger earned $300 million on that transaction, and would have snatched even more if the head of the Central Bank of New Zealand hadn’t called the Bankers Trust office with threats and demanded a “stop to the financial attack”.

How Much Can You Earn at Forex per Month According to Statistics?

The above examples demonstrate that you can earn a lot of money on Forex and it is not necessary to be an economist. The age at which you start trading is also not important. For example, Kovner was over 30 when he did his first transaction. However, according to the statistics from Forex Explore, the real numbers for earning “at a distance”, for novice traders are:

50$

500$

1000$

5000$

10000$

50000$

100000$

more than

Your deposit

50000$

50$

500$

1000$

5000$

10000$

50000$

100000$

Your income:

21,1%

Those are the average incomes of traders who adhere to conservative strategies, diversify risks to the maximum, do not make large bets, use moderate leverage, and use approximately 100% of their deposit annually. It is hard to say how much individual earnings will be per month. For example, Larry Williams somehow made 1100%, but you can lose everything if you regularly make mistakes with predictions.

Favorable factors for earning at Forex:

follow and understand market trends (recall Soros and the “black Wednesday”);

rollback periods after sharp and highly volatile movements;

increases in the general price level (inflation);

occurrence/increase of public debt;

increase/decrease in interest rates by the Central Bank;

local and global economic crises.

No matter how financially obsessed it may seem, any problems with the national currency present potential opportunities for a Forex trader to earn money. The crises of economic ecosystems of all levels are also an occasion to react by making an up-to-date prediction and buying or selling a particular currency. Therefore, it is very important to constantly monitor the world news and price movement charts for target trading instruments.

Mistakes and Fallacies of Traders that Prevent Them from Earning

Earnings at Forex largely depend on how well a trader understands what he is doing. As in the vast majority of cases, the loss of a lot and/or errors in a trading strategy are because a trader did not take into account some key aspects, did not understand available information, or did not correctly interpret market conditions. We have collected some basic mistakes and fallacies of novice traders, with a brief comment on each.

Start bidding with a large amount of money.

No. Do not. This is one of the most common mistakes. At Forex, a trader shouldn't work with a deposit of more than $100 in the first weeks or even months. Due to inexperience, people often lose their entire deposit and quickly leave the Forex market, although they may have had the potential for success in the Forex market.

Trading on intuition.

This is the second most common error. Sometimes novice traders consider themselves literally “the most intelligent and cunning”, believing that predictions can be made on intuition. While successful traders need intuition, still the basis for success is constantly studying market mechanisms and in-depth self-training.

Training course as a guarantee of success.

No matter how many Forex trading courses you take, they will never guarantee you a profit. Earnings can only be guaranteed by many years of experience.

Bonus betting.

In 2021, brokers offer deposit and no-deposit bonuses. However, these bonuses should not be unreasonably risked. It is more reasonable to use them for small training transactions to gain experience and hone your strategy.

Having financial/economic education.

This is also far from a guarantee of success. Forex is a live and dynamic market with the highest volatility of trading instruments. Economic theories are good, but success comes only with practice.

The pursuit of quick profits.

The higher the profit is and the shorter the time allowed for its receipt, the greater the risk. This is especially critical for a novice trader. You need to clearly understand that Forex brings earnings at the start only gradually, and it will increase, but only gradually, and over time.

Endless news tracking.

Yes, this is also a mistake because the brain needs to rest, especially from the same type of activities. If a trader monitors news channels for days on end, it is unlikely that this will help to create an ideal strategy, but rather it will lead to intellectual burnout and psychological breakdown.

A special case of the last point is the constant deliberation of a strategy. The Forex market is open 24 hours a day, but people cannot function well in a 24/7 mode. At first, while making money at Forex is not the main source of income for you as a trader, you need to devote as much time to it as you can reasonably spare, without affecting your main work or your sanity or health. In the future, with increasing profits, it makes sense to read more books on trading, watch more courses, and analyze your own methods more often, but without becoming excessive in your effort.

Forex Risks

Earnings at Forex are fraught with high risk, and it is impossible to eliminate all risks. This applies not only to Forex but to any investment program. The difference is that if you make a foreign currency deposit to the bank, you can get 2-5% from it in a year, conventionally. However, when trading at Forex, you are betting here and now and you can get from 10% of the profit from it here and now.

There is only one risk at Forex — losing the bet, and the higher the bet is, the greater the leverage is, and therefore, the greater the probability of a loss. This is due to the high volatility (unpredictability) of quotes for all trading instruments of the foreign exchange market. The following factors increase the risk of loss:

unreliable broker;

rash trading strategy;

risky bets with a lack of experience;

bidding "on intuition", without a theoretical basis;

ignoring risk diversification methods;

ignoring foreign economic factors.

The factors which increase the risk of loss

In a word, when a trader trades without proper preparation, when he uses the services of an unlicensed broker (or licensed broker in an offshore shop), when he thoughtlessly applies large leverage and does not follow the news in the world, then the risk of losing a deposit increases exponentially.

And vice versa, if a trader prepares for trading, correctly analyzes the market, taking into account the maximum number of economic factors, works with a reliable broker who has a level 1–4 license, and constantly improves his knowledge, then the risk of loss is significantly reduced. Also, there is an extensive range of basic methods for risk reduction and diversification, from returning a spread upon registration through Traders Union to PAMM portfolios. As a result, Forex earnings become not only achievable but also potentially significant.

Expert Opinion on Forex Trading

Compared to traditional earning methods, trading at Forex has several advantages. No one requires reporting from a trader (the broker deals with taxes). He draws up a working schedule for himself and is not limited by anything other than the current legislation. Besides, Forex earnings are really good ones, although perhaps not in the first months. On the other hand, it does not require special skills. On the job training is sufficient.

As of 2021, the profession of a Forex trader is one of the highest paid in the world. This is a status profession, and it has led to a list of the most prestigious specialties for more than half a century in the United States. After all, a professional trader is a market expert and analyst. This is an emotionally and psychologically stable person, with a flexible mind and quick decision-making skills. As a rule, experienced traders are charismatic and erudite, and not only in the field of economics and politics.

If we add the highest earning potential among all professions here, then we get a job that is optimal for most people. A different matter is that you really need to practice it, improving your skills every day and constantly trading, even if initially on a cent account. However, if you approach the issue competently, profit and status will come your way.

Antony Robertson

Traders Union Trade Analyst

Jack Moore

Financial Analyst and Trader

Jack has been engaged in trading and forecasting in the Forex market for more than nine years. During this time, he’s gone from a novice to an expert in stock and financial markets. Jack consults for well-known brokerage companies and he also helps private clients to select a broker.

In 2013, he worked at System Capital Group (trading stocks and currencies online using investments of companies and individuals). He held this position for five years.

Jack Moore advises all traders to work with brokers through Traders Unions. Throughout his professional career, he is proud to have received excellent recommendations from numerous clients who have been satisfied with the advice.

How many traders earn profits at Forex?

On average, 11-25% of novice traders become professionals and achieve a regular income. The rest quit because they want "everything and right now", which leads to fundamental errors and a loss of their deposit.

How much can a novice trader earn at Forex?

This is a difficult question because it depends on several dozen factors. On average, in a successful scenario, a novice trader can earn $4, $40, or even $400 per day.

How much do the top traders earn per month?

Nobody will give exact numbers. However, it is known that such legends as Larry Williams, Peter Lynch or Steve Cohen sometimes make up to $1 million per transaction, and this is not the limit.

How comparable are risk and profit at Forex?

It is impossible to eliminate the risk at the foreign exchange market completely, but it is the risk that determines access to high profits. However, this risk can be skillfully diversified without reducing the earning potential.

How Much Can You Make Trading in Forex in 2021?

How Much Do Forex Traders Make?

How Much Money Do You Need to Start Earning in Forex?

How to Earn Money in Forex Trading?

Choosing a broker

Deposit management

Minimization and diversification of risks

Predicting

Psychological readiness

Stories of Successful Forex Earnings

Bruce Kovner - Over 87% per annum for 30 years

George Soros is the man who brought down the Central Bank of England

Andy Krieger - New Zealand's Nightmare

How Much Can You Earn at Forex per Month According to Statistics?

Favorable factors for earning at Forex:

Mistakes and Fallacies of Traders that Prevent Them from Earning

Start bidding with a large amount of money.

Trading on intuition.

Training course as a guarantee of success.

Bonus betting.

Having financial/economic education.

The pursuit of quick profits.

Endless news tracking.

Forex Risks

Expert Opinion on Forex Trading

Author of This Article About Forex Earnings

FAQs Regarding the Earnings in Forex

How many traders earn profits at Forex?

How much can a novice trader earn at Forex?

How much do the top traders earn per month?

How comparable are risk and profit at Forex?