How much can you earn from trading? Real numbers
In modern society, when it comes to brokers, trading and earning by investing in the stock market, two imaginaries are usually preset. On the one hand we see films like The Wall Street and TV series like Billions, where successful traders earn millions and live sumptuous lifestyles. On the other hand, we interface with statistics, which tell us that most traders lose their money. So: what is the salary of an average trader? How much does a professional trader earn? Do you really make money with online trading?
These are the questions that this article will attempt to answer as exhaustively as possible. We carried out a research and investigated what hedge fund managers earn and then compare it with the typical earnings of those who trade in Forex . We looked at traders who work for companies and banks, as well as independent investors who trade directly on the markets with their own money from their home computer. So if you are wondering how much you can earn with online trading, you are in the right place. Let’s begin!
How much a professional trader earns
Before sharing the different salary levels for traders, the first point to cover is that there are several options for building a career as a professional trader. They can be broadly divided into two categories: working for a company and working for themselves.
If you work for a company (such as a hedge fund or an investment bank) as a day trader, hedge fund manager or quant trader, you are an employee who receives a base salary and often a performance-based fee. Some of the benefits of being a company employee trader include the following:
You can use the company’s existing tools and strategies, which hopefully have already proven profitable
There are often training and mentoring programs integrated into the corporate structure, which means you have more support than you can get in a career of your own.
You are not risking your money to trade, which can eliminate some of the stress caused by trading and mitigate the negative aspects of the psychology of trading.
There is the possibility of progress in the career, which means that you can level up to manage the funds of the customers of higher value or more customers
When you have an employee job, you have a reliable salary and, depending on the company and local laws and regulations, you can also get health or pension benefits.
However, there are a few downsides to being an addicted trader:
If the company’s profit goals are not achieved, you will probably have to deal with multiple rules, restrictions and observations
There’s less flexibility – while TV and movies might make the trader’s role seem fascinating, it’s still a regular job, with schedules that go beyond 8 standard office hours.
There may be an office policy or difficult customers that you have to deal with often
If you invest well, you will only get a small percentage of the profits paid in the form of a bonus, instead of benefiting completely
If you are an independent Forex trader, a stock or commodity trader , instead of being paid with a salary, you would trade and invest your money you would benefit from the profits of your investment operations. The benefits of working for yourself include:
Greater flexibility – you can work from anywhere with an internet connection, and you can operate at any time when the market is open
No earnings limit – if you have a profitable strategy, there is no limit to the amount you could earn (assuming you have the available capital to start trading, of course)
As in trading for a company, however, being an independent trader has its downsides:
You are risking your own money, which could lead to higher stress levels
There is less security, as you cannot count on the fact that the same basic salary is automatically paid every month, especially if you spend a bad month in investments and your earnings are reduced
The structure and support are less integrated than that of a company – although there are many educational resources available for online traders, you have to look for them independently rather than using them automatically and without further worries
You need to find or develop your own trading tools to improve your investment performance
Are you already thinking that independent trading would be a good opportunity? The good news is that you can start practicing today with a free demo account!
A demo account allows you to trade risk-free on the markets, so you can develop your trading strategy and learn how to use the different tools, all with virtual money in your account. To learn more and open a free demo account click on the banner below!
online trading real earnings
Now that you have an overview of the pros and cons of the trading profession, let’s take a look at the typical wages of each of these traders.
Earning with trading: what the numbers say
For traders who are employed by an e company, salaries can vary widely depending on the specific job role of the trader, the company they work for and even the city or part of the world in which they work.
If we start with US trader salaries, based on Indeed, the average trader salary is $ 98,652 per year plus $ 25,000 in commissions / bonuses. However, the highest salary they listed was $ 196,917 with Citi Trader.
According to Payscale, equity traders earned an average of $ 80,935 with a bonus of $ 14,916, a commission of $ 21,000 and profit sharing options of $ 6,000. Their range for basic salaries ranged from a low of $ 47,000 to a high of $ 160,000.
Important factors to earn with online trading
Factors that can determine traders’ salaries include the trader’s role and seniority within a company, his performance, the company he works for, and even his position.
Earn with trading depending on the roles
There are several positions available in hedge fund trading, including:
Junior trader / portfolio managers
Senior trader / portfolio managers
Most employees will move from being an analyst (4-8 years) assisting junior and senior traders with data, then moving on to the junior trader business. , however, these figures are almost always based on performance and therefore on the success rate.
Since this is a high turnover sector, while the highest salaries are very high, the average is dragged downwards because most traders will never reach that level.
Online trading earnings and performance
Working as a trader within a hedge fund or investment bank is a performance-focused role, and the salaries listed above depend heavily on bonuses.
if a trader manages a $ 50 million asset portfolio and manages to get a 10% return, his income will be $ 600,000. If he can’t get positive results, he’ll only have the base salary left, which is around $ 60,000 – $ 90,000 a year, according to the Page Executive 2019 survey.
A senior manager who manages a $ 500 million portfolio and achieves a 10% return would earn a salary of approximately $ 6 million a year.
Whether it’s independent trading or trading for a company, performance is everything when it comes to how much money you can earn. The good news is that there is an easy way to improve your trading performance, and it’s to learn from the professionals.
Our educational section is full of articles and training materials that can help you on your way to excellent trading performance. The theory is fundamental, but remember that without practice, nobody will gain anything. For this reason we advise you to start experimenting what you are learning from the training material as soon as possible in a free demo account. It takes just a few clicks to start immersing yourself in the charts and trends of international markets!