Forex trading, also known as foreign exchange trading, is the process of buying and selling currencies with the aim of making a profit. The forex market is the largest financial market in the world, with an estimated daily turnover of $6.6 trillion. Many traders are attracted to forex trading because of the potential for high returns, but what is the average percent gain in forex trading?
There is no definitive answer to this question as the percent gain in forex trading can vary widely depending on a number of factors. These factors include the trader’s level of experience, the trading strategy used, market conditions, and the amount of capital invested.
One way to measure the percent gain in forex trading is to look at the performance of professional traders. According to a study by the French financial regulator, the Autorité des marchés financiers, the average percent gain for professional forex traders in France was 1.48% per month in 2019. This represents an annualized gain of around 18%.
However, it is worth noting that this figure is based on the performance of a relatively small sample of traders and may not be representative of the wider forex trading community. Additionally, the study only looked at professional traders, who are likely to have more experience and resources than the average retail trader.
Another way to measure the average percent gain in forex trading is to look at the performance of retail traders. According to data from the forex broker Forex.com, the average percent gain for retail forex traders in the United States was 3.42% per month in the first quarter of 2021. This represents an annualized gain of around 41%.
Again, it is important to note that this figure may not be representative of all retail forex traders as it only includes data from one broker. Additionally, the data only covers a three-month period and may not be indicative of long-term performance.
It is also worth noting that forex trading is a high-risk activity and that many traders will experience losses as well as gains. According to a study by the National Futures Association, around 70% of retail forex traders in the United States experienced net losses in 2018.
To improve their chances of success, forex traders need to develop a solid understanding of the market and the factors that influence currency prices. They also need to develop a trading strategy that suits their personality and risk tolerance. This strategy should include rules for entering and exiting trades, as well as risk management techniques such as stop-loss orders.
In conclusion, the average percent gain in forex trading can vary widely depending on a number of factors. While professional traders in France averaged a monthly gain of 1.48% in 2019, retail traders in the United States averaged a monthly gain of 3.42% in the first quarter of 2021. However, forex trading is a high-risk activity and traders need to develop a solid understanding of the market and a trading strategy that suits their personality and risk tolerance.
