Is Forex Trading A Profitable Career Option?

Typically, the US dollar (USD) is considered the world’s largest foreign reserve currency, with the greenback historically dominant in the forex market. Even today, the USD is on one side of 88% of all global currency transactions, while the EUR/USD pairing accounts for more than 24% of total daily trades.

However, foreign exchange reserves continue to increase at a marked rate, rising to 393.78 AED billion ($107,206,447) in April 2021. Due to the volume of liquidity in the market, forex trading is an increasingly popular career option in the UAE, especially for retail investors and entrepreneurs.

But how lucrative is forex trading as a career option, and what are the key considerations when pursuing this method of income generation? While considering these factors, understanding whether forex trading is profitable can provide deeper insights into potential earnings and market dynamics.

What Are The Average Salaries For Forex Traders?

According to Indeed.com, the average forex trader salary in the US is around $98,652 per annum.

However, this sum can be increased by up to $25,000 in commission payments on average, depending on the nature of the specific job role and whether or not the individual in question works for a large firm or institutional client.

For example, the most significant salary reported by Indeed was $196,917, with this available at the large-scale firm Citi Trader. However, individual and retail forex traders can earn as little as $40,000 per annum, while it’s estimated that up to 70% of investors in this market lose money over time.

This is slightly higher than the average $80,935 annual salary recorded for equities traders, who also report bonuses in the region of $14,916 and commissions payments as high as $21,000. 

Typically, the range here (according to Payscale was between $47,000 and $160,000), making it a viable career and earnings option but one that’s slightly less lucrative than investing in currency pairs.

Why Should You Consider A Career In Forex Trading?

While only around 30% of forex traders are thought to make money, there’s ample opportunity to profit with the right type of preparation and trading strategy.

But why should you consider a career in forex trading, aside from the potential to make a sizable profit in some instances?

• It’s An Accessible Career Path: When starting out as a forex trader, you should know that you’re accessing a leveraged marketplace. This means that you can leverage margin (or debt) to open positions that are disproportionately larger than your initial deposit, often up to a ratio of 100:1. This means you can launch your initial career with as little as £100, while you can also cap leverage as a way of minimizing future trading costs.

• You Can Use A Demo Account To Hone Your Skills: As a forex trader, you can also use a so-called “demo account” to hone your trading skills and gain practical experience in the market. This creates a simulated, real-time trading environment where you can wager freely for between three and six months without risking your hard-earned cash. So, it’s an ideal option for inexperienced traders who want to launch a successful career.

• Benefits from High Liquidity: Any trader who wants to succeed will fare better if they operate in markets with high levels of liquidity. This refers to the ease with which assets can be bought and sold, and there’s no doubt that currency fits this description perfectly. This is especially true in the case of major pairs such as the EUR/USD, which boast the highest trading volumes and typically retain strong demand.