Consistent average trading returns in forex is between 3% – 5% monthly for most Professional Traders. This number can greatly vary with several traders.
Consistency is key here!
In every investment we expect to get a return no matter how small it maybe.
Knowing how much you expect to make from Forex trading determines how much you should commit to trading.
It can be time or money you expose to risk.
factors to determine your average trading returns
- Size of the account. Clearly, larger accounts give more returns than smaller ones
- Strategy Profitability and Draw downs. What is the percentage of your winning trades in a month? How many consecutive losses does your system give before it runs back to profits?
- Risk per Trade. This helps you know your drawn downs. You can always maintain your risk per trade by using position sizing.
- Risk reward Ratio. I call this the holy grail of trading. Bigger reward ratio gives you larger average trading returns.
- Number of Traders per Month. This may not be a big deal if you have a very large reward ratio compared to risk. But number of profitable trades with good reward ratio greatly magnify your average trading returns in forex.
The how much you expect to earn tells your trading style, currency pairs you should trade, the market sessions and the how big the size of your position should be.
Your goals and trading returns move hand in hand. When you achieve one, you gets to the other.
However, every Forex trader should expect to make some losses as they expect returns.
Forex trading is a probability venture. As a trader,you have equal chances of winning and losing as long as you have an open trade.
However much your system performs, it can never win 100% all the time. Expect some draw downs at some point but aim at increasing more of the odds on your side..
Forex trading needs patience and commitment.
Give much time to your system. Take journals and evaluate its performance after a certain period. You can take weeks, days or months.
Have a follow up for your system’s performance and find out where it’s not doing as expected. Focus on your trading first and evaluate your personal performance.
Once you become a consistent trader, you will be able to harvest your expected return with no difficulty. Be patient, consistently trade with discipline and trade only your plan.
Your success in trading Forex depends on only you and so does your expected returns.
Common mistakes most traders make and how to avoid them?
Fear and greed are the number one causes for the common mistakes most traders make when trading. Fear and greed normally come before trading, during and after trading. When you are under fear or greed, you are likely to commit these mistakes most traders make; Get...
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