A day trader is an individual who regularly buys and sells equities the same day. The occupation, if it is one, is apparently highly click-worthy. There are many confident online reports that a day trader can return profits of 10 percent each month, or no, wait, that's 18 percent per month or Pick a profit percentage. There's someone online waiting to tell you that's how much you can make. The reality is that all academic studies of the practice conclude that, with few exceptions, you can't make money day trading at all.

Since it's always fun to dream, start with the myth. Many of the online articles are specific about the profit ratio you can expect when you become a day trader. Not bad, and the best news is, you don't even need to get dressed for work. According to a study of the Taiwanese stock market led by economist Brad Barber of the University of California, Davis, Graduate School of Management, and encompassing everyday trade in that market over a year period, less than 1 percent of all participant traders made a profit.

Putting it another way, 99 percent of all day traders lost money. They concluded that frequent traders not day traders, necessarily, but including day traders and those who trade stocks frequently underperformed investors who employed a buy and hold strategy by about a third. The more frequently a given participant traded, the more they underperformed the average return. True, more recent studies, like the research study at the Cass Business School at City University of London concluded that monkeys throwing darts at the stock pages could achieve better results than stock traders.

OK, they were digitally simulated monkeys, but still. This is probably the first question that came to mind when you thought about trading Forex for a living. I certainly wanted to know how much I could make when I started with equities in Curiosity is natural. In my opinion, the people using these kinds of profits as a selling mechanism give this business a bad name.

Sometimes in order to move forward, you have to forget what you think you know. This is one of those situations. The business of trading is a marathon, not a sprint. This brings me to an extremely effective, but somewhat unconventional, way of thinking about earning potential.

Average Rate of Return for Day Traders

If you want to become a consistently profitable trader, you must focus on the process first. No trader has ever become successful by focusing solely on how much money he or she can make each month. Trading is no different. It will, however, put you out of business in a hurry. Just like the race car driver, you should focus on the trading process. These are a few of the steps of this process that you should focus on. You may only get five to ten quality setups each month if trading the daily time frame.

You could also set quarterly and yearly targets. Just remember that the process required to achieve those profits is far more important than the money itself. The amount you can earn from Forex over the long run is nearly limitless. The market favors the disciplined. Those who have the patience to wait for quality setups and never take excessive risks get rewarded for their prudence.

Of course, those are just hypotheticals. You will always have good and bad months no matter how much experience you acquire. Figures like these may seem unthinkable to some. But many of the multi-millionaire traders we read about started with far less. All three grew their accounts into millions of dollars despite starting with a relatively small amount of capital.

You have to put more focus on how much money you could lose rather than how much you can make. Remember, a trading edge is far more than just a strategy. Anyone can learn to trade price action or swing trade and utilize the various strategies of each. An edge is the entire process from start to finish.

So start thinking long-term.

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Trading any market successfully is a long-term endeavor. It takes years, not months or weeks, to become consistently profitable.

Chapter 14. Making a Living Trading Forex

Armed with that information, it becomes much easier to take things slowly. Keep bets small and focus on quality setups, rather than attempting to trade every day. That includes things like risk management , having the patience to wait for quality setups and drawing accurate levels among other things. As long as you master the process of trading well, the profits will follow. In other words, let the money you earn from Forex become the byproduct rather than making it your motive. If you must aim for a specific monetary figure, make it a conservative one. Of course!

Is it easy? The key is taking the time to understand what it takes to make it in this business. That includes finding a time frame and strategy or strategies that suit you as well as developing patience and discipline, all of which takes a considerable amount of time and energy. The Forex market exchanges trillions of dollars every day. That means your earning potential is technically limitless. Focus on the process of good trading and let the profits be a byproduct of that process. The best way to make money with Forex is to forget about making money.

The Basics

You want to focus on the process of good trading. That includes things like conservative risk management, staying patient and only trading the best setups, and having a plan before you enter a trade, among other things. Focus on those things first. Save my name, email, and website in this browser for the next time I comment.

It depends on your trading pattern and consistency.

Your Biggest Job As A Forex Trader

I suppose your post is about swing traders. It applies to every trader. I have a really good and reliable trading Strategie, and I made So it is possible. The point is, there is not fixed return in a month.

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This is Quite an information. Thank alot. My name is Franck and my question is, what is your take on binary options?

Is it profitable? Can I make money out of binary options? If No, why?.. Thank you. Hi Frank, I might write about this one. Personally, I dislike binary options.

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Too much fraudulent activity concerning brokers. I am an employee, how can I start the process of trading. Is it possible to be working as an employee and still be trading? What u are saying it is true bcuz since I have been in trading industry I have never make consistent profit buzzy over trading i read everything that u are posting i like to say thank.