How Much Money Can I Make As a Forex ecn market depth explained Trader? Here we’ll look at income potential for stock, forex and futures day traders. How much money can I make as a day trader?
Obviously there is a massive range of income potential when it comes to day traders. Stocks are generally the most capital-intensive asset class, so if you trade another asset class such as futures or forex you can generally start trading with less capital. How much money you start with. How much time you put into your trading education.
These issues are not our focus here. Income potential is also based on volatility in the market. The scenarios below assume a certain number of trades each day, with a certain risk and profit potential. In very slow market conditions you may find fewer trades than discussed, but in active market conditions you may find more trades. The numbers below are based purely on mathematical models, and are not meant to indicate you will make this much.
The numbers below are used to show the potential, but are not intended to reflect typical returns. As indicated in the first paragraph, most traders fail. For all the scenarios below we will be using relatively small accounts, as that is what most day traders start with. It is easier to make high percentage monthly returns on a smaller account compared to a larger account. Very small changes can have a huge impact on profitability. For these scenarios we assume a modest 1. How Much Money Can I Make Day Trading Stocks?
Day trading stocks is probably the most well-known day trading market, but it is also the most capital-intensive. You average 5 trades per day, so if you have 20 trading days in a month, you make 100 trades per month. 7,500, but you still have commissions and possibly some other fees. Also, you are highly leveraged, and there is a chance of catastrophic loss if a stock where to move aggressively against you and your stop loss became ineffective. How Much Money Can I Make Day Trading Futures? 7,500 in your futures trading account. 15,000 to start your trading account.
Your risk is 6 ticks, and you will try to make 9 ticks, as that is a 1:5: reward to risk ratio. Assume you average 5 trades per day, so if you have 20 trading days in a month, you make 100 trades per month. 3,750, but you still have commissions and possibly some other fees. This is simply a mathematical formula, and would require finding five trades a day that offer this reward:risk.
Also, you are highly leveraged, and there is a chance of catastrophic loss if a market where to move aggressively against you and your stop loss became ineffective. How Much Money Can I Make Day Trading Forex? Forex is the least capital-intensive market to trade. With 6 pips of risk you can trade 8. Notice how highly leveraged this position is. If uncomfortable with this amount of leverage, reduce the position size.