Realistic Forex returns show the real return traders get from their investments. While trading Forex means that some processes are happening in the long-term, there are some factors, which have a crucial effect on the money returning. One of the main factors among them is inflation. Calculating the realistic Forex returns supports understanding what is the real profit from the investment.
In this guide, you’ll get detailed information about the meaning of the realistic returns in Forex trading, how they work and what is the amount of average returns, how to raise them, how successful traders are raising their money earnings, and how much do professional Forex traders make.
Realistic Returns Explained
Realistic returns, as we already mentioned above, are the amount of money you get as a profit from your invested funds. However, that’s not all. While calculating the realistic returns traders need to take into account several details, including the inflation rate. For calculating the realistic returns you will need the rate of nominal returns and rate of inflation. More specifically, traders using the following formula: one plus the nominal rate divided by one plus the inflation rate, and after that you have to minus one. What’s more, there’s a more simple formula for calculating the realistic returns: nominal rate – inflation rate.
How can traders have decent returns?
Regularly, any kind of positive return is considered a decent return. A positive balance means that you made a profit and your trading was successful. For having great returns traders need to follow the strategies.
One of the most popular strategies among others is that traders need to go slow and make his or her income consistent. For example, after investing money, having success, and gaining money, investors don’t need to take high risks. Instead, all the steps should be rationally taken and raise their earnings by reasonable risking.
What’s more, as long as the FX market is volatile and unstable market prices are often changing, which may lead you to loss. For that reason, there is another strategy, which traders are using mostly. The strategy implies depositing a small amount of money daily on their account and take little risks. This kind of strategy supports them to accumulate earnings and finally get great profits.
For getting high Forex realistic returns traders are dedicating quite a lot of time. For instance, when the trader thinks that his performance is quite well, he thinks that he can do better in the future and is taking high risks. Higher risks, frequently, are linked to money loss. As long as it is an unstable market, he can’t foresee or predict the exact processes that can be taken.
Furthermore, traders are adopting the scalping strategy. Scalping strategy needs a lot of time daily, however, the results in most cases are positive and lead them to high benefits. The scalping strategy means to open and close trades in a short time and very quickly. The above-mentioned strategy is frequently used by experienced and successful traders.
Significant Things to Consider For Having Realistic Returns
Several factors should be taken into account if you want to get high realistic Forex profits.
Focus on Your Own Performance
One of the main things that should consider traders while trading Forex is to focus on their own performance rather than other traders’ performances. Focusing on other traders’ performances in most cases leads traders to money losses. So, if the trader wants to have highly realistic returns they should have their own masterplan and generated strategies. It’s always important to have your own strategy. Strategies allow people to count every step. There are several strategies in FX trading and traders can choose among them the best one, which suits them the most.
Luck
What’s more, there are stories of successful traders who managed to get high realistic returns. Their stories are sometimes inspirational for newcomers and people who are new to FX trading. However, you should take into account that behind their success there were some factors which lead them to get high profits, including luck. And their acts were riskier and by placing very large trades they found an amazing opportunity. However, that’s not always what happens. As long as the FX market is volatile, in most cases, the successful traders’ stories aren’t as useful as they may seem. Besides, the average Forex trader return every month ranges from one to ten percent. It’s significant to always remember, that behind some successful stories there are a large number of failure stories.
Low-Profit Goal
What’s important, traders need to plan a low-profit goal, which is somewhere around 0.1 %. As long as planning means a lot in FX trading, traders need to define little by little their low-profit. The low-profit goals make traders satisfied after the goal is achieved. What’s more, a low-profit plan allows them to feel less pressured. It eventually leads traders to a feeling of joy while trading FX. After reaching the defined low-profit goal, traders need to raise their goals and step by step increase their weekly, monthly, and finally Forex annual income.
Keep Track of Time
One of the significant factors to consider while trading FX is the time that is spent on trading. For getting high realistic returns traders should allocate the time for both trading and researching. For instance, some traders need to spend more time researching and less on trading, while some of the traders are spending more time on trading, rather than researching. When a trader consumes more time for researching, regularly, he doesn’t place trades daily, but for example, once a week. And in that case, they used to place extra-large trades, which may be risky as well. However, the more often a trader opens his positions and places trades, the smaller can be the returns and profits. Even though that the trader takes a little profit, he is sure, that the risks are lower and the chance of losing money is decreased, as well. Generally, the mentioned strategy is what newcomers choose to start with.
How Much Money Do Forex Traders Make?
It can’t be said definitely what is the actual amount of money traders can get through FX trading. On average, the annual salary of the FX traders is defined as $81 910 and the monthly payout is $6 825. What’s more, the average amount of salary in the case of the top earners is $125 000 while the monthly payout is defined as $10 436.
The main factors which affect the received amount of money and profit are the bet sizes and the amount of FX leverage. Also, the risk you take while trading Forex. The bet sizes and the amount of money you place to trade differs and mostly is defined by the traders’ preferences and their goals. And the amount of leverage, in the case of the EU countries is defined as 1:30, through the regulating system. Besides, in the U.S. Forex brokers provide leverages up to 1:50 on major currency pairs. Forex brokers, usually, don’t require the commission fees from the traders, instead, the number of spread is increased. The spread is the difference between the bid and the ask prices and that’s the money brokers can take through traders.
What’s more, the risk/reward ratio defines the potential returns while trading Forex. The mentioned ratio defines the amount of money you risk to get a certain amount of earnings.
Final Words
Realistic returns in Forex trading define the real amount of profit traders can get through FX trading. For calculating the realistic returns there’s a basic and simple formula, which shows throughout the inflation rate what is the real amount of the profit traders got through trading. What’s more, you’ve seen how much do Forex traders make and what are their average amount of earnings both monthly and annually, what are the main, significant factors which affect realistic returns in Forex trading, and what are the main things you need to take into account to get notable profits while trading Forex.