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Is it Possible to Make Day Trading for a Living?

Earnings on Forex are not fixed. It is possible to have a regular and stable income, however, just not a fixed income. Because at each moment, two groups of factors — general and temporary — affect the success of a trader and his income. Let's first describe the general ones:

Common factors:

  • Choosing a broker.

    The broker provides the trader with the opportunity to enter the interbank market to trade currencies and other trading instruments. the size of leverage, opportunities for risk diversification, bonuses, and commissions all affect a trader’s daily income.

  • Choosing a strategy.

    The strategy as a whole determines the intensity of trading and the amount of the trader's earnings. Some traders open and close many orders each day (scalping, intraday), while others focus on long-term trades. Some traders risk more and therefore, gain more in profits (or losses), and other traders who risk losing only a little, gain (or lose) a small amount per trade..

  • Deposit amount.

    The larger the deposit a trader uses, the higher his earnings will potentially be. With the increase in leverage, the potential profit also increases. However, this also increases financial risks. In general, we can say that the amount of the deposit is the main factor in determining how much a trader can earn per day.

  • Experience of traders.

    The longer a trader trades, the more experience he gets, which improves his chances of increasing his daily earnings. A better understanding of market mechanisms improves your trading strategies.

These are factors that do not depend on time. That is, a trader can work with one broker for years. He can use one strategy for many months until he finds a better one. In general, it can be stated that all these factors affect the percentage of the maximum income that a trader can receive on his deposit.

Time-related factors, unlike general ones, change constantly:

  • Market situation.

    In the world economy and politics, there may be events that constantly affect Forex and which a trader must take into account. His daily earnings primarily depend on the market situation.

  • Analysis of the previous trading day.

    A trader always starts his working day by assessing the results of yesterday's trading. And this is new information every day, a new experience that needs to be analyzed and applied in practice.

  • Signals and analytics.

    These are charts and calculations that a broker can provide to a trader, or that a trader can obtain independently from various sources (programs on TV, podcasts or from other traders, etc.).

Time factors cannot be taken into account in advance. That is, sometimes traders do manage to predict a stock market crash, a merger of two large corporations, or some other important event. But it is more likely that they will react to conditions in the market.

None of those factors make it possible to give clear figures on how much you can earn day trading in the Forex market. Your profit can be $50, $50,000 or several million dollars. And it would be more correct to show the real possible earnings not in numbers, but in percentages. Provided that the trader is lucky and all the above factors are positive, he can easily earn, say, 100% of his deposit during the day. That is, if the trader had a deposit of $1000, then the exact number of his earnings will be $1000. Well, if the trader had a deposit of $100,000, then his earnings would be $100,000. This is the most precise answer to the main question of this article, which is: How much can you earn on Forex per day?

One Day in the Life of a Forex Trader

So, daily earnings in the Forex market depend on many factors, not all of which a trader can control. But he has the opportunity to analyze all of them, draw conclusions, and based on the conclusions, make his own predictions. Now, we will describe a typical Forex trader's working day to give you a clear understanding of the profession.

One Day in the Life of a Forex Trader

How Does Trading Day on Forex Begin?

As a rule, a professional trader gets up at 6:00 in the morning because he needs to take a shower, eat breakfast, take a child to school. Then (at about 7:00-7:30 am) he logs on to his broker’s platform using either his home computer or his office computer and begins evaluating yesterday's market activities, trades, financial news, etc., to get a clear appreciation of the status of what the market is like today.

In the background, he watches CNBC or Bloomberg and looks at quotes on the main monitor or chyron. Most traders write notes with a pen in a notebook, not on a computer. In the morning, one should note potentially profitable currency pairs, key levels, review price signals, and other data points that a trader considers important for his strategy.

Each trader has his own approach, but the goal is to assess the results of the previous trading day and their correlation with the current situation in the Forex market. Is today’s market trending or consolidating? How are prices moving against key data points? There are dozens of such questions. But for an experienced player, they are not difficult, they just take a little time to develop today’s market strategy after fully evaluating all pertinent factors.

How Does Forex Trading Work?

At approximately 9:00 am, a trader summarizes the analysis and makes his decisions. If there are worthwhile setups (potential conditions for entering a trade), the trader places an order or several orders at once. Someone starts trading later, someone earlier.

Here the trader's actions and his daily earnings are directly determined by his strategy. Here are some examples:

  • Scalping (or pipsing).

    The purpose of formulating a strategy is to be able to complete a trade immediately, as soon as the price has risen by literally a few points (pips - percentage in points). These are short-term trades, usually taking from a few seconds to a couple of minutes to complete. A Forex trader can make at least several hundred such trades per day.

  • Long term (or long term strategies).

    In this case, the trader's deals are not closed in less than 24 hours. Such a strategy requires a fundamentally different approach to market analysis. Unlike scalping, this method is not performed momentarily, but for the long term.

  • Intraday (or day trading).

    This is not a strategy, but an approach to trading, the essence of which is to absolutely complete all trades during the day. The duration of trades can vary greatly depending on the chosen strategy.

Not all traders can safely call themselves scalpers or long-term traders. More often a trader simply sees the right moment and seizes it by combining and applying strategies, techniques, and styles. Therefore, the daily earnings of each trader also differ. Today it can be $46, and tomorrow it could be $7,200. And, the day after tomorrow, you may go into the negative for the day because there are no traders who win all their trades every day.

Planning the Next Trading Day

Planning the Next Trading Day

Professional Forex traders usually take a break during the workday. For example, from 11:00 to 14:00. At 2 pm the market analysis and trading either continue “as is” or begins with a new strategy. Also, along the way, the trader necessarily plans the next day by marking down currency pairs in his notebook that may be profitable to work with tomorrow. He notes down important events and signals that may affect tomorrow's trading.

An important point: the planning of the next working day does not take place in the evening, or rather, not only in the evening. It happens all the time, sometimes from very early morning or from the first news on Bloomberg. Planning is important because it determines the strategy for the next day and the likely setups. Forecasts never produce 100% guarantees, but they need to be done to understand the market better and respond to successful situations promptly.

Forex Trading Completion

Each trader has his own closing time of the workday because it depends not only on the schedule of exchanges (after all, Forex operates 24/7) but to a greater extent on his strategies and forecasts. Conventionally, this is the period from 22:00 to 00:00. But there may be exceptions.

Forex Trading Completion

For example, a trader may leave several open positions and pending orders at night. He sleeps from 23:00 to 01:00, and when he wakes up, the result is waiting for him in the form of a stop-loss or a profit. Then he goes to bed until the morning. This strategy is widespread, and it is followed by many on Forex; for example, by the famous Australian trader Nial Fuller.

Summing Up Trading Results and Fixing Earnings

Summing Up Trading Results and Fixing Earnings

Before going to bed, a Forex trader usually calculates his daily earnings, because this is also a factor that determines his strategy for the next day. If he is in the red, this is a reason to reconsider your strategy or approach. If he is in the black, he has to identify and analyze all the points that influenced his success.

But by the end of the working day, the trader may or may not close all trades. Some orders may remain open until the next morning. Still, others may remain open for several more days. Again, everything depends on the strategy and trading style, which dictate the daily routine.

What Determines a Stable Day Income as a Trader?

A Forex trader's earnings per day, as we have just seen, is a "floating value". For example, a trader can keep an open trade for several days and, accordingly, at this time he does not receive any income from it at all. And upon closing, he may get an excellent profit. Everything is different for scalpers: they receive income constantly throughout the day from dozens of trades. Summarizing all the potential opportunities, we list the main factors that determine how much a Forex trader can earn per day:

Main factors:
  • Deposit

    again, the more funds a trader uses in trades, the higher his potential earnings will be;

  • Strategy

    the number of trades and their volume directly determine the amount of a trader's daily income;

  • Forecasts

    the success of a trader's strategy depends on his forecasts for the market as a whole and for specific currency pairs;

  • Stress resistance

    the ability to think sensibly, exclude momentary impulses, and determine how well-considered and thought-out a trader’s decisions are;

  • Mood

    the emotional state of the trader influences the decisions he makes; therefore, professionals need to be able to tune themselves into the working rhythm and try to set aside all extraneous thoughts or problems;

  • Bonuses

    a trader can participate in various contests and receive brokerage bonuses for winning;

  • The market situation

    is an unpredictable factor that can easily devalue even the most well-thought-out strategy or, conversely, makes a trader a millionaire in a matter of minutes.

Many more factors affect how much a Forex trader can earn per day. But those above are the main ones. And, each trader has personal qualities that determine his success. For example, someone does not turn off emotions, but, on the contrary, acts impulsively and fanatically, while managing not to violate the rules of money management. But these are, of course, exceptions.

5 Basic Day Trader Rules to Follow Every Day

To make good money, Forex traders must be disciplined and be able to follow his own established daily routine. This procedure need not be very strict. The point is to know for sure at what moment it is most reasonable to open an order, when you can take a risk, and when there are no suitable setups and it is better not to open trades at all.

5 Basic Day Trader Rules to Follow Every Day

Each trader fashions his own rules to trade by. But we have collected the main points that all successful players must take into account and which are predetermined by the rules of Forex. The rules are:

  • Trading is a business, not a hobby.

    Forex trading used as a hobby will not bring you significant income. On the contrary, dabbling in the Forex market will most likely result in the trader losing his deposit over and over again. Therefore, trading should be treated as a business, a professional activity that requires skills and develops experience, and with experience, earnings will increase.

  • "Plan your trades and follow the plan."

    It is unknown who said this, but presumably Andy Krieger. The point is that each trade, even within the scalping strategy, should be as calculated and planned as possible.

  • Never risk money that you cannot afford to lose.

    There will always be unsuccessful trades. They can be minimized, but not eliminated. Therefore, it is unacceptable for traders to use the money saved for other purposes, for example, to pay your monthly mortgage, your children’s tuition, etc.

  • Use technology.

    Today some technologies can significantly facilitate the process of trading and speed it up, like high-speed Internet, a powerful computer, and innovative market analysis applications, etc. Employ whatever increases your chances of success.

  • Assess the risks.

    Never break the rules of money management. In 99.99% of all cases, the player loses. The generally accepted standard for risk in the industry is 2% per each trade. You should know how to stop your trade immediately when you realize that your chosen strategy is a losing one.

Your list should be constantly updated. And the longer a trader trades, the longer his list should be. And at some point, he should organize the data points into groups, thereby reducing the list to a few checkpoints. By this time, his well-honed list will define his trading style and, as a result, help to determine how much he can earn on Forex.

The main thing

The main thing is to learn to plan and understand in time whether the plan is successful or not. You need to expect and accept losses; they will come in any case. However, risks on Forex can be successfully reduced and managed through well-planned diversification. Forex is the market with the highest volatility, but the profit potential is also the highest. The 3-4% that you get from bank deposits per year can be easily received on Forex in a single trade.

Is it possible to earn serious capital on Forex?

Today, tens of thousands of professional traders trade on the Forex market. Not all of them are millionaires, but many — even without higher education or a minimal knowledge of economics — manage to achieve significant income. Here are a few striking examples:

  • Jesse Livermore

    Jesse Livermore

    sold Union Pacific shares in 1906 exactly one day before the San Francisco earthquake, which nearly destroyed the company. It is not known how Livermore predicted this disaster, but he earned £250,000 from the sale of assets. And in 1907, predicting the fall of the American financial market, he received $1 million in a day — in 1907.

  • Paul Tudor Jones

    Paul Tudor Jones

    spent months analyzing the chronicles of the Wall Street crash of 1929. In the end, he predicted another crash in October 1987. Two weeks before the expected event, he began to trade aggressively against the market, although other players were moving with the market’s trends. On October 19, the Dow Jones fell 22% and many traders lost colossal sums. But Jones, owing to his forecasts and competent strategy, earned 18 million that day.

  • Andy Krieger

    Andy Krieger

    in 1987, during the global crisis, identified the most overvalued currency, which was the New Zealand dollar. With 1:400 leverage provided by Bankers Trust, he entered a short position against the New Zealand currency. As a result, the "kiwi" (as traders call the New Zealand dollar) sagged so much that the country was on the verge of bankruptcy. And Krieger made $300 million in a day.

  • Stanley Druckenmiller

    Stanley Druckenmiller

    was the executive of George Soros' Quantum Fund hedge fund. He predicted the crisis of the National Bank of Great Britain and a few months before the supposed collapse of the British pound he began selling it on an incredible scale. This led to the UK leaving the single European economic system, and the position of the pound fell by 25% against the US dollar. That day — September 16, 1992 — is now known as "Black Wednesday". No one knows exactly how much Druckenmiller made that day, but the Soros Fund made several billion dollars in profit.

Forex traders occasionally do make incredible amounts of money and sometimes become millionaires in a day. There are also opposite situations when millions are lost within a matter of hours. But this happens much less frequently, because professional traders working with such amounts are excellent at assessing risks, and their losses are the result of unforeseen economic events (for example, during the 2007 crisis, many traders lost millions and even billions).

Again, there is always some risk in the Forex market. Risk is the cornerstone of the foreign exchange market. But this is the very risk that provides the trader with high earnings. It is the losses that give him a unique experience, thanks to which he improves his strategy and collects more wins as a result.

How Much Money Do Day Traders Make? Expert’s Opinion

Daily stable income is the goal of any Forex trader. It is clear that it is difficult to achieve significant profit in the first weeks and even months, but over time it is possible.

According to statistics, only 11-25% of novice traders remain in the market. But the majority leave because they violate the rules of money management, trade on emotions, without proper planning and market analysis, and as a result, they lose most of their capital.

You need to understand that trading is a profession. You can learn the basics on demo accounts by listening to courses, reading thematic forums, etc. But a trader receives and develops professional skills only in the process of real trading. Success is based on the systematization of the workflow, constant market research, and the development of new strategies.

Nearly 95% of a trader's job is analysis and planning. The remaining 5% is for order placement and calculation. If you need to give clear numbers, then I would say that with a competent approach, a Forex trader's earnings with a deposit of $5,000 can be at the initial stage $50-200 per day. But maybe more, or maybe less, there are too many variables in play.

Jacob Jones

trader-analyst at Traders Union

The Author of the Review

Климов Андрей Федорович
David Butler
Independent Trader and Analyst
  • From 1999 to 2005, he worked as a trader-analyst in the Chicago branch of the American brokerage company Interactive Brokers;
  • From 2005 to 2010, he worked remotely as a junior and then as a senior analyst at Wells Fargo, San Francisco, USA;
  • From 2010 to 2016, he worked as a leading specialist in the planning department of the American financial control department;
  • From 2016 to 2019, he worked as a trader-analyst at ‘In Capital’, at the same time as he was a freelance consultant at ‘ Invest and Develop;
  • Since 2019, he has been an independent trader-analyst at Traders Union.

FAQs Regarding Day Traders’ Income

How much money can you make on Forex in one day?

Some traders have earned several hundred million dollars in a day. If we take the average trader, then it can be $50, $200 a day, and much more.

What do you need to successfully make money on Forex?

You need discipline and the understanding that Forex is a profession, not a hobby. Continuous market analysis, planning, and self-education are at the core of successful trading.

Can I lose on Forex?

Yes. Even Bruce Kovner, the most stable Forex broker in the world, sometimes loses trades. He just does it quite rarely due to his experience and professionalism. Forex risk can be minimized, but not eliminated.

How difficult is it to make money on Forex?

It is as difficult as making money in any other profession that requires planning and regular analytics. But Forex does not require a priori knowledge, the trader learns everything himself in the process of trading. It is the highest form of “on the job training”!