Traders buy and sell currencies in the largest financial market. They may be self-employed, but the industry also offers more conventional opportunities. Hedge funds, global banks, and brokers are constantly searching for new recruits. Talented traders may also be employed by groups of clients who delegate investment decisions. Here is a look at the average Forex salary in 2021 for experts, both employed and independent.
The average salary a Forex trader can expect varies. Professionals are paid in accordance with their education, experience, managed volumes, etc. The salary of Forex traders working alone depends on their skills and market forces. So, how much money can you possibly make in each of these fields? Here is an overview of Forex trader salary in 2021.
Average Forex Trader Salary
Independence is a double-edged sword: on the one hand, you retain all the profit. At the same time, there is nobody to share the risks with. Forex trading may be a hobby, a side job, or a career, depending on your goals.
The average salary of Forex traders is difficult to calculate. Traders are entirely responsible for their strategy, including what to do with earnings. These may be withdrawn or reinvested — either partially or fully — to boost the volume and future profits. Several factors determine independent Forex trader salary:
Return on Investment (ROI)
This is the size of profit from trading a particular instrument (i.e., currency pair). It depends on the amount invested in the beginning, strategy (short-term or long-term), the number of trades over the period, and accuracy of forecasts. ROI is crucial for the average Forex trader salary. Some strategies like the momentum trading strategy are more successful than others, resulting in a higher ROI.
The Size of Initial Deposit
Today, brokers allow entry with very little starting capital — sometimes, even $10. The less you invest — the less you can potentially earn. Thus, while Forex is affordable to anyone, the smallest investors limit their own profit potential.
Suppose you invested $4,000 and achieved a 5% ROI. This provides you with an extra $200. If you reinvest profit monthly, annual earnings will equal $3,183.42 ($7,183.42 – $4,000). For $80,000 invested under the same conditions, the earnings are $63,668.51 ($143,668.51).
Costs of Trading
Aside from the fees paid to the Forex trading brokers (Forex cost per trade like overnight charges, commission, or spreads), traders may need to buy furniture and equipment (e.g., a laptop), and pay for broadband internet access. Depending on the location, they may also pay income tax.
Professional Forex Trader Salary
An employed trader usually earns a base salary and a commission based on performance. The latter may vary greatly. In addition, employers pay bonuses depending on team results, company turnover, etc. Finally, office employees are entitled to perks like a paid holiday, retirement plans, and profit-sharing.
Obviously, experienced professionals earn more than beginners. Education matters: some companies require at least a bachelor’s degree in finance. Thriving organizations can afford higher salaries across the board. The geographic location, the number of years with the company, and the level in the hierarchy are all essential.
Finance-savvy individuals have a wide choice. In addition to Forex-related jobs, retail brokers post regular vacancies like HR manager or accountant. Thus, you can get hired without a degree in finance.
As a result, Forex broker salary offerings vary greatly. Here is a look at the first group of job postings. How much can you make by monetizing trading skills?
- First, there are analysts. They are also known as currency researchers or strategists. The median Forex analyst salary in the United States was $81,590, according to the U.S. Bureau of Labor Statistics.
This job requires meticulous analysis of the market and the fundamentals affecting it. Analysts keep track of political and economic drivers which sway currency rates — e.g., interest rates, unemployment, GDP, oil price dynamics, etc. Experts provide their conclusions to the employers or clients who hire them. This information is used for rational investment decisions.
- The average Forex consultant salary in the USA is $77,368. These experts lend their expertise to companies and individuals. The responsibilities include the provision of forecasts, market research, and trade advice.
- An fx manager is a trader who makes decisions for other people. One expert may be responsible for one or more accounts. They buy and sell currencies on their clients’ behalf. As a rule, volumes are substantial, which makes the job different from retail trading. Managers have profit targets to meet, and the required level of experience is higher.
Professional Forex trader salary varies. The mean size of Forex manager salary in the US in 2021 is $122,721, and the ceiling is just over $130,000. The pay depends on multiple factors like education, certification, skill set, and years in the industry.
- The average Forex officer salary is one of the highest. These specialists can expect to make between $145,310 and $345,130 in the US. The average figure is just over $208,000. Education, length of experience, and credentials can make a huge difference.
Read Comparison of existing Forex regulation around the world
The Bottom Line
As you can see, being self-employed has benefits and limitations. Traders may also have a 9 to 5 job and help others invest large capital. Salaries depend on education, position, location, and a host of other factors. One thing is certain: the sheer range of avenues and opportunities in Forex is tremendous.