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How Much Money Do The Top Forex Traders Make?

   

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There is serious earning potential at hand when you choose to trade currency, something that every investor should be trying to unlock. Looking at the scale of forex trading, it’s certainly worth knowing not only what the top traders are making, but also how they are making it, along with how top traders differ from the rest.

Looking at the Numbers

While everyone’s forex trading experience will be different, if you are looking at the true upper echelon of forex traders, you’ll find that the percentages being turned over on a yearly and monthly basis truly are astounding. Most traders will look at their margins monthly, and it wouldn’t be surprising to see a professional trader generate profit between 5 percent and 15 percent per month over the course of a year, with a few lesser months scattered in between. With that in mind, through an average monthly profit of 10 percent over the course of a year, a top trader would generate a profit of 120 percent overall. This would mean that £100,000 in total capital could be flipped into a £220,000 figure, with £120,000 profit. This is obviously just an example, but top forex traders tend to earn six figures (or possibly more) per year, with the aforementioned giving an explanation of how that can come about.

Determining Factors Related to Trade Performance

First up, how much capital you have is going to have a direct impact on how much you can make when forex trading. As you’ve seen from the above example, the top earners are able to play the percentages and generate big returns because they have a large amount of capital to work with. You can absolutely build things up slowly, but large capital is intrinsically linked to the top traders for a reason.

Mastering the use of leverage is also important for anyone who wants to successfully rank as a top-earning trader. When used, it means that you can make trades for more capital than you actually have. Use of leverage in any capacity is linked to your attitude to risk, as if you want to use leverage on a large scale in an attempt to push your profit levels up, you’re going to need to take bigger 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 currencies are slow burners, which makes them favorites of beginners and large-volume traders, while others have a real “snap” as it were, which means volatility, risk, and potentially bigger profits when trading them.

How Professional Traders Differ from the Rest

It has been said before, but it certainly stands to reason. Professional forex traders represent the 1 percent, while casual traders represent the other 99 percent. This is because professional traders approach the market in a distinctly different fashion from casual traders. Looking at how professional traders differ from the rest, you will find that a large degree of this comes in the form of mentality and focus.

Casual traders are known not to be selective when entering trades, showcasing impatience. They also have a track record of letting emotion, fear, and greed take over, diverting away from what otherwise might be a solid trading strategy. Casual traders can certainly turn a profit—in fact, many do—but letting the heart rule over the head, along with always looking for the next “quick fix” position in the market, usually hampers performance.

When forex trading on a professional level, patience and discipline are unequivocally key. Top traders have an understanding of the damage that emotion, fear, and greed can have, thus they don’t hit the panic button when they see volatile price movements. Arguably remaining stubborn at times, they stand by a system and follow a trading plan through. Rather than jumping on every common trend that comes along, buying and selling in a flash, they instead assess their success or failure based on series of trades rather than any single individual trade.

The above is just the tip of the iceberg when it comes to what professional traders do differently from the rest. But as you can see, mentality is what allows top traders to succeed and arguably gives them the edge over others within the forex market.

How You Can Step Up into a Position of a Top Trader

If you’ve committed time to forex trading, but haven’t exactly found your account overflowing with profit (or you’ve simply find yourself asking “what’s next?”), then it’s worth making the step up to a professional trader position. Anyone looking to trade professionally needs to understand that it’s more or less a full-time commitment, as the importance of monitoring the markets can’t be understated.

Beyond a shift in mentality—which will take time—you also need to be willing to alter your trading 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 out of reach for a casual trader, but professional traders will know how to implement them at will. Research, education, and practice can help you acclimatize to advanced-level trading systems that can transform your forex trading success rate.

Other factors that any casual trader with professional trading aspirations needs to address include reuse of profits, investment capital levels, and risk management practices. Stepping up into a position of a top trader is certainly plausible, but it is by no means something that anyone can take lightly, as it can be a rather intensive process.

Conclusion

The top traders may earn six figures a year or more, but this doesn’t happen by chance. The reason that this bracket of traders is able to reach such heights is because they approach the market in a different fashion from the norm. So, if you want to start earning the same as what the top traders make, you should be prepared to build, alter, and overhaul your forex trading efforts.

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Disclaimer:

The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way.

This post was written by Graeme Watkins

CEO Valutrades Limited, Graeme Watkins is an FX and CFD market veteran with more than 10 years experience. Key roles include management, senior systems and controls, sales, project management and operations. Graeme has help significant roles for both brokerages and technology platforms.

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