While it isn't required, having a win rate above 50 percent is ideal for most day traders, and 55 percent is acceptable and attainable. If a trader loses 10 pips on losing trades but makes 15 on winning trades, they are making more on the winners than they're losing on losers. Therefore, making more on winning trades is also a strategic component for which many forex day traders strive.

This is accomplished by using a stop-loss order. For this scenario, a stop-loss order is placed 5 pips away from the trade entry price, and a target is placed 8 pips away. This means that the potential reward for each trade is 1. Remember, you want winners to be bigger than losers.

Let's have a detailed look at how much can you really make as a day trader?

While trading a forex pair for two hours during an active time of day it's usually possible to make about five round turn trades round turn includes entry and exit using the above parameters. If there are 20 trading days in a month, the trader is making trades, on average, in a month. In the U. Forex brokers often don't charge a commission, but rather increase the spread between the bid and ask , thus making it more difficult to day trade profitably. This estimate can show how much a forex day trader could make in a month by executing trades:.

This may seem very high, and it is a very good return.

See Refinements below to see how this return may be affected. It won't always be possible to find five good day trades each day, especially when the market is moving very slowly for extended periods. Slippage is an inevitable part of trading.

Forex trader annual salary: What do the numbers say?

It results in a larger loss than expected, even when using a stop-loss order. It's common in very fast-moving markets. You can adjust the scenario above based on your typical stop loss and target, capital, slippage, win rate, position size, and commission parameters.

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Most traders shouldn't expect to make this much; while it sounds simple, in reality, it's more difficult. The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results.

Investing involves risk including the possible loss of principal. Admiral Markets. Trading Forex Trading.

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Table of Contents Expand. Image via Unsplash by spanic. In addition, few day traders share their trading results and profits to anyone apart from the Internal Revenue Service. In fact, losing money is much more likely as a day trader. Further adding to their losses are the high transaction costs they faced.

While these average salaries may motivate you to want to become a day trader, remember that it takes time and plenty of determination to turn a decent profit. Though there are several risks that come with day trading, you stand to earn a good amount of money if you find success.