Forex trading is a very popular and lucrative way of making money online. It involves buying and selling currencies in the foreign exchange market. Day forex traders are traders who open and close their trades within a day. They aim to make profits from the fluctuations in the currency market. One question that many beginner traders ask is how many pips can day forex traders make?
Before we answer that question, let us first understand what pips are. A pip is the smallest unit of measurement in the forex market. It stands for “percentage in point” or “price interest point.” It is used to measure the change in the exchange rate of currency pairs. For example, if the EUR/USD currency pair moves from 1.2000 to 1.2010, it has moved 10 pips.
Now, back to the question, how many pips can day forex traders make? The answer to this question depends on various factors such as trading strategy, risk management, market conditions, and trading capital. However, it is essential to note that making a specific number of pips per day is not the goal of forex trading. The goal of forex trading is to make profits consistently over the long term.
Day forex traders can make anywhere from 10 to 100 pips per day. Some traders make even more than 100 pips per day, but they are few and far between. Making 10 pips per day may not seem like much, but it can add up to significant profits over time. For example, if a trader makes 10 pips per day and trades five days a week, they would have made 50 pips in a week. If they trade with a lot size of 0.1, each pip would be worth $1. This means that they would have made $50 in a week.
The amount of pips that a day forex trader can make also depends on their trading strategy. Some traders use scalping strategies, which involve opening and closing trades very quickly to make small profits. Scalping traders aim to make 5-10 pips per trade. Other traders use swing trading strategies, which involve holding trades for a few days to make larger profits. Swing traders aim to make 50-100 pips per trade.
Risk management is also a crucial factor that determines the number of pips that a day forex trader can make. Traders who risk a high percentage of their trading capital on each trade may make more pips, but they are also more likely to blow up their accounts. It is essential to have a risk management plan in place to protect your trading capital.
Market conditions also play a role in how many pips a day forex trader can make. Some days, the market may be volatile, and traders can make more pips. Other days, the market may be slow, and traders may struggle to make any profits. It is essential to be patient and wait for the right trading opportunities.
In conclusion, day forex traders can make anywhere from 10 to 100 pips per day. The amount of pips that a trader can make depends on various factors such as trading strategy, risk management, market conditions, and trading capital. However, it is important to remember that making a specific number of pips per day is not the goal of forex trading. The goal of forex trading is to make profits consistently over the long term.