Updated: Oct 30, 2019
Is Trading Forex Profitable? Can you get rich by trading Forex? How much money can I earn trading Forex? These are possibly the most common questions we hear at nVestFX, and here are our answers!
is forex profitable?
The answer to this loaded question is a big fat YES, and an even bigger, and fatter NO!
Encouraged to learn now?
You may be saying NO, but the truth is, this should be all the encouragement you need to learn to trade Forex.
What do I mean?
Well, simply put, over 90% of the Forex traders who enter the market, enter without any sort of formal preparation. They read through a few blog posts, sit down with a friend of theirs who “trades”, and soon enough they think they have it all figured out, and they’re so excited to be the next big “influencer” on Instagram, posting photos of themselves with a stack of ones wrapped up in a hundred dollar bill.
Boom! You found your solution!
All you have to do is register for nVestFX’s online training courses, and you are all set to get to trading. Wrong! If you want to be successful in forex trading, then you must treat the path to success, as a complete, step by step process. You can’t just wake up one day and be a “master trader”, it comes with time.
Now that the cold hard truth is out of the way, lets look at the technicals behind these questions, and really do the math, to determine just how profitable trading can be.
how much money can you make in the forex market?
Forex is traded in “lots”, which are essentially currency units, standardized for trading purposes.
For most pairs, and most brokers, 1 Lot = $10USD.
Changes in price, move in “pips, which are standardized units for changes in price within a currency pair, for most pairs, 1 pip = the change in price at the thousandth decimal place. (Small right? Not when 1 lot technically equals 100,000 units of currency!!)
Why is that important? Here’s an example to explain why..
Trader is placing a market “buy” order, or going “long” on EUR/USD at 1.1096
Trader is placing an order using a standard lot ($10USD)
Price on EUR/USD fluctuates to 1.1121
Trader exits order at 1.1120
Net gain = 1.1120 – 1.1096 = 24 pips
Total Gain in ($) = 24 pips x $10USD = $240
Theoretically, the trader turned $10 into $240 a 2400% return in as short as 5 minutes (depending on the pair, day, time, etc.). Now, take that $10 lot size, and make it a $50 lot size, at 24 pips = $1,200, or a $100 lot size, at 24 pips = $2,400, and it goes on and on. That means people are making thousands upon thousands of dollars a day, yup, A DAY, trading Forex.
It all comes with time, and practice, and a progressive increase to your capital via gains and preservation measures. Unfortunately, it isn’t all sunshine and rainbows, because just as easily as a trader could make those gains, they could also lose the equivalent of those values, from their trading account.
so, is forex a good investment?
Unfortunately, with everything so very good in life, there always has to be the corresponding dose of negativity associated with the truth.
Forex CAN be a very good investment, but it truly requires a well-trained, and disciplined individual to attack the markets correctly. You can’t go in blindly; it is definitely not a get rich quick scheme. At nVestFX, our passion doesn’t stem from taking your money, and leaving you in the dust, we actually work with our students to ensure their success, because everyone truly reads the markets quite differently. It is an art form, not an exact science!