“How much money can I make Forex trading?” is a frequently asked question, so I thought I’d show day of trading on the EUR/USD to provide an example, and also explain how much can be made and more.
The example used (below) is from Friday June 29th, and was a good day, although you do get better and worse. In fact, Friday afternoons are not usually the best time to trade, but this was the one that was most recent at the time of writing this article.
The image above shows price changes between the EUR/USD (Euro/U.S.Dollar) from early morning to early evening, and you will notice a run which starts at about 1pm (GMT), and closes around 40 minutes later. If you look at historical graphs for this currency pair you will see that this is often a good time to trade.
The run was from 1.2573 to 1.2674, an increase of approx 100 pips.
How Much Money Would I Make If I had Bought At This Time?
How much you make depends on the Lot Size you are using.
Standard Lot – If using a standard lot, you could have potentially realised almost $1,000 profit in approx. 40 minutes (minus the spread which would have been around about $16-$30, depending on the Forex broker you are with). To fund an account of this size though you need to have a high minimum deposit. Some brokers will allow you to trade on even larger lot sizes.
Mini Lot – For a a mini lot, each pip (4th decimal) move would be equal to a dollar, so, about $100 profit minus the $1.60-$3.00 spread.
The 100 pip increase is the maximum that could have been profited from the change in the price of the currency pair (in the run shown). Although, traders could have profited from this situation suing other trading methods
Forex Strategies – Scalping
One of the main strategies for taking advantage of a situation like the one above is scalping, which literally means get in quick, make a profit, get out quick. A lot of scalpers make profits on smaller moves, and to be honest, it would have been difficult to maximise the entire amount of pips gained in the example above (however it is possible).
The purpose of this post is to look at how much money can be made, without going into too much detail about how to scalp, but there are two simple ways (among others). Some traders will follow the charts at key trading times (e.g. 1pm GMT), and as the market starts to move, will follow the trend, and hopefully get out before it turns around. Other traders will wait for an announcement such as the U.S. non-farm payrolls, and see how the market reacts, and follow that.
How Much Could I have Lost?
This all depends on whether you have applied a stop loss, which prevent your account from going past a set debit point. You could have set a conservative stop loss at 20 pips ($200 standard account, or $20 mini account). And, that would be the maximum that you could lose in this instance.
If you have available equity that you can afford to lose, you can sign up with one of the brokers below:
Sign up at Forexyard | $1,000 Min Deposit | * Good support / Bonus More
Sign up at Trading Point | $1,000 Min Deposit | * Good bonus system More
Sign up at eToro | $50 Min Deposit | * User friendly interface More