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The question is, what’s the average forex trader income?

It’s a good question. But, truthfully, the sky is the limit in terms of the average forex trader income. You just need to learn how to trade forex like a pro.

Forex is the largest traded market in the world, with a value of over $5 trillion. Corporations, traders and central banks, involved in the buying or selling, make up the forex market.

Trading 24 hours a day across the week, it’s the most accessible financial market in the world.

The best thing: if you want to start trading forex, it requires little capital.

Let us explain…

What’s the role of a forex trader?

Forex trading professionals can be either employed by a financial institution or act independently. By looking at the cash exchange rate, a forex trader makes profit by predicting the future.

Forex traders try to forecast the currency value in the future. They do this by using either fundamental or technical analysis, which we explained in our free forex course. Once forex traders have an idea of where a currency is going in the future, they buy or (short) sell it to try and make a profit.

To stay profitable, the best forex traders focus on their ‘risk’. For example, the average amount of risk should be 1% or less per transaction. For instance, if you have $5,000, you should not risk more than $50.

By keeping their risk small, forex traders can live to fight another day. If the trade doesn’t work out, no big deal. Just cut your losses and move on to the next trade. Professional forex traders, who make a lot of money, are excellent at managing risk.

Types of forex traders

Some professional forex traders are recruited by financial firms, such as international banks and hedge funds. Other forex traders are employed by proprietary trading firms (i.e. prop shops). Forex traders working at prop shops are mostly day traders and swing traders. These types of traders seek short-term profits.

You can even trade forex for yourself!

Employed forex traders

As an employed forex trader, you benefit from greater financial security. There is because you still receive a salary regardless of your performance. If the bank or hedge fund does bankrupt, it’s not your problem!

Just find another job!

The best news: the salary also comes with additional bonuses, if you make a lot of profits. The downsides are the long hours and lack of flexibility in the job.

Let’s look at independent forex traders…

Independent forex traders

As an independent forex trader, there’s more room for freedom and flexible hours. You’re also in charge of your decisions, including what to invest in, the amount to invest, and the trade time.

Remember, as a sole forex trader, you keep all the profits. But there are disadvantages too, such as risking your own money and not receiving a salary (unless you pay yourself one…or have a day job on the side).

The question is, what’s the average forex trader income?

What is the average forex trader income?

The average forex trader income depends on how much capital you have and your risk management strategy. The average forex trader income also varies based on whether you are self-employed or employed by someone else.

Employed forex traders

An employed forex trader’s income comprises of a base salary, bonus, and employee benefits such as health insurance and pension plans. The average forex trader income differs depending on your position (i.e. head trader), experience, financial organisation, and overall performance.

Each organisation has a distinct company culture and incentive scheme. A challenging trading period affects the bonus amount. But, if the firm is making a lot of money, you can get paid generous bonuses.

Prop shop forex traders can earn more than $1 million a year. The downside is that prop shop forex traders only ‘eat what they kill’. For example, if you don’t make any money for the firm, you don’t get paid any money…and if you lose money, you risk getting fired.

It’s that simple.

Forex traders working for hedge funds and international banks have a medium- to long-term outlook. If you want a position at a hedge fund or bank, you need a presistgious university degree. But if you don’t have this, there’s other ways of getting in as well. You could learn how to trade forex profitably and build a track record…or seek employment at a prop shop. There, with experience under you belt and a track record, you can move to a hedge fund in the future.

If you work at a hedge fund or bank, you’re probably going to be on $200,000-plus a year, with a bonus scheme in place as well. The incentive for working for a hedge fund or bank is really prestige. Also, if you make the firm a lot of money, you can make millions of dollars.

But who wants to work for someone else….and who wants to make someone else money?

Independent forex traders

The dream job is doing what you love, making a lot of money, and working when you want and where you want. In this case, lots of successful forex traders decide not to work for anyone. They prefer to be self-employed or, if they love their day-to-day job, trade forex on the side to make extra income.

For self-employed forex traders, the financial dynamics are completely different. Since you’re risking your own money, you have more freedom. Working for a hedge fund or bank, you must trade within guidelines and strict risk parameters. If you’re trading forex with your own money, you can decide how much to trade and what to trade.

When you’re starting out, don’t try to ‘hit the ball out of the park’.

Little wins add up.

Your average forex trader income isn’t fixed and will rely on your forex trading skills. If you’re a consistent forex trader, you can make a lot of money. But your earnings are subject to tax, which affects your net income. The higher your forex income, the higher your tax. That is, unless you live in a low-tax country!

Becoming a successful forex trader gives you options. Money buys you options. So, if you learn how to trade forex successfully, as we explain in our free forex course, you can trade forex anywhere in the world.

The bottom line: the average forex trader income is anyone’s guess. It really depends on how good you are at trading forex. Remember, elite forex traders aren’t born elite forex traders. They learned how to trade forex successfully and are excellent risk managers.

Your ‘Start With Forex’ Takeaway: Average forex trader income

How do you learn how to trade forex successfully?

Truthfully, we can’t explain how to trade forex successfully in two paragraphs. We devoted 24 lessons to that topic – how to trade forex. In short, forex traders minimise their risk by using stop-loss orders and adjusting their trading size.

Forex traders focus on the win rate.

For example, if you win 50 out of 100 trades, your win rate is 50%.

No one can win every trade, which is why elite forex traders are elite risk managers. But the best forex traders tend to have win rates of 50-60% or higher.

Remember, forex trading always gives you opportunities to make money. The average forex trader income is excellent if you implement an effective strategy and manage your risk.

With a smart trading strategy, there’s potential to earn a good income and have lots of freedom. But it takes time to get good at trading forex. First you need to ‘learn’ how to trade forex, then you need to practice trading forex, then you develop skills…and then you make money! If you want to give this game a shot, it’s crucial that you stay focused and committed. It also helps signing up a forex signal or a forex system provider, while learning how to trade forex. That way you can learn how to make the best trades.

The bottom line: trading forex successfully can be extremely lucrative and give you a dream life. If you want to learn how to trade forex like a professional, start by reading our FREE forex course. Remember, there’s a million ways to make a million bucks in the forex markets. So if you want a head start in forex trading, alongside our free course, check out our approved products page for forex trading signals and systems to help kick start your trading.

To your trading success,
Start With Forex

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