This is actually a bit of a tricky question, surprisingly enough. CFD traders don’t have their earnings public available like many government employees, so it’s not like you can look it up easily. Also, it’s not like traders even have employers you can ask; how much money a CFD trader makes is entirely up to them, and they can be as secretive about it as they want.
Got your risk management sorted? Open your account now!
Brokers, however, do keep track of their trading statistics, from which you could presumably gather earnings data. But these companies are notoriously tightlipped about how much their customers have and make, mostly to protect their customer’s privacy. All this is to say that potential earnings are mostly estimates that are self-reported, and there are reasons for traders to both exaggerate their results as well as downplay them (especially around tax officials).
What About Billionaires?
Is it theoretically possible to make a load of money trading only CFDs? Well, it’s also theoretically possible to win the lottery. There are traders who have become quite wealthy, but usually through a diversified portfolio that includes CFDs.
Realistically, however, most traders who count themselves as successful and end up living off of their trading have gone for consistency and a modest but reliable return on their investment. A strategy that works consistently and is constantly being updated and improved is usually the ticket to financial independence through CFDs.
You Get What You Pay For
Probably the biggest factor in determining how much you will make depends on your account size. The more money you put in, the larger the trades you can make, the more money you can make on the trades. As a ballpark average, most successful traders make around a 10% return on their account.
This varies depending on a lot of other factors, and usually traders will go through a growing period when they are starting out. So this isn’t a measure of your initial deposit, but how much you have in your account. If you have $5,000 in your account, and have become an experienced and successful trader, it wouldn’t be unreasonable to average around $500 a month profit. That might be a livable wage, or not nearly enough, depending on where you live.
Upsizing
One of the ways to overcome that is to build your account until your rate of return is enough, or to save up from other means. There are traders who manage to make more than a 10% return – it’s an average – but there are also other traders who manage around 5%. After all, 5% on a $10,000 account is the same as 10% on a $5,000 account.
Mind you, these figures are for experienced traders who have polished their craft. Don’t quit your job after putting a few grand in your account, expecting to live the high life. It takes skill and learning to become a consistent winner trading CFDs, and it’s really important to manage your risk.
FAQs
As a ballpark average, most successful traders make around a 10% return on their account. This varies depending on a lot of other factors, and usually traders will go through a growing period when they are starting out.
How much do CFD traders earn? ›
However, there are a few real-life examples that can give you an idea of the potential earning power of CFD trading. A trader with a $10,000 account who consistently achieves a 10% return on their trades would earn an average of $1,000 per month.
Do people make money trading CFDs? ›
It's possible to make money trading CFDs with experience and a thorough understanding of how the financial markets work. But, it's well known that around 75% of retail traders (private investors) lose money when trading CFDs.
What is the average income for a forex trader? ›
As of May 7, 2024, the average hourly pay for a Forex Trader in the United States is $48.81 an hour. While ZipRecruiter is seeing hourly wages as high as $94.23 and as low as $25.48, the majority of Forex Trader wages currently range between $27.64 (25th percentile) to $87.02 (75th percentile) across the United States.
What percentage of forex traders make money? ›
Forex trading is a popular way to make money, but it's also a risky business. Many people start trading Forex with the hope of getting rich quick, but the reality is that most Forex traders fail. So, how many people actually succeed in Forex? The exact number is difficult to say, but estimates range from 5% to 10%.
Why is CFD trading illegal in the US? ›
CFDs are illegal in the US because they are an over-the-counter (OTC) trading product. OTC trading products aren't listed on regulated exchanges like the New York Stock Exchange (NYSE), bypassing US regulatory bodies. However, US traders have alternatives such as forex, options and stocks.
What is the success rate of CFD trading? ›
CFDs are a highly risky way to trade. Financial Conduct Authority (FCA) analysis has revealed 82% of CFD customers lose money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 51%-81% of retail investor accounts lose money when trading CFDs.
Why do so many people lose money trading CFDs? ›
CFD Traders Reducing risk exposure
One of the main reasons many traders fail is the lack of risk management strategies. By failing to adopt certain risk management techniques and simply opening trades without protecting their trades with take-profit and stop-loss orders, they risk losing all their trading funds.
Why is CFD trading so hard? ›
This requires constant vigilance of the market and price movements. As well as the use of effective risk management to safeguard funds. Some of the most popular risk management tools used in CFD trading are stop-loss and take-profit orders.
Are CFDs better than forex? ›
Unlike forex which limits you to currency pairs only, CFDs allow you to trade a wider range of assets, including forex. There isn't much diversity in the forex markets. For example, most forex brokers offer the major eight currency pairs, but also allow you to trade up to 70 other minor currencies.
The answer to this question ultimately depends on your individual goals, dedication, and skill level. While it is possible to make a living off Forex trading, it requires hard work and continuous learning. It is crucial to have realistic expectations and understand that success does not come overnight.
Are forex traders wealthy? ›
Forex trading may make you rich if you are a hedge fund with deep pockets or an unusually skilled currency trader. But for the average retail trader, rather than being an easy road to riches, forex trading can be a rocky highway to enormous losses and potential penury.
Who is the richest forex trader? ›
Ray Dalio is widely recognized as the wealthiest forex trader in the world. With a net worth of billions, Dalio's success in the forex trading industry is a testament to his exceptional skills and strategies. Starting his career in finance, Dalio founded the highly successful hedge fund, Bridgewater Associates.
Has anyone become a millionaire from forex? ›
The answer is yes! Forex can make you a millionaire if you are a hedge fund trader with a large sum. But forex from rags to riches for the majority is usually a rocky and bumpy ride which often leaves some traders in their dreams.
What is the biggest secret in forex trading? ›
Opening and closing orders should just be treated as an execution that is always performed without any emotion. All of your trades should open according to your system and analysis conducted beforehand, this is one of the most important Forex trading secrets.
How do I turn $100 into $1000 in forex? ›
How to Grow Your 100 Dollar Forex Account From $100 to $1000
- Save up and start with at least $100 in your account.
- Use a broker that has low fees.
- Use leverage effectively.
- Consider using a robo-advisor to automate your Forex trades.
- Diversify your portfolio by investing in different currency pairs.
This has consistently resulted in increased requirement of skilled CFD resources and proving to be a very good career opportunity for engineers aspiring to make a career in the interesting domain of heat transfer and fluid flows.
How much is 1 lot in CFD? ›
Lot — Usual volume term in the Forex trading world (traders talk about a number of "lots" in Forex and usually a number "contracts" with CFDs). 1.00 refers to 1 standard lot or 100,000 units of the base currency. 0.10 refers to 1 mini lot or 10,000 units of the base currency.
What is the highest salary in CFD? ›
Employees who knows CFD earn an average of ₹19.3lakhs, mostly ranging from ₹15.0lakhs to ₹49.6lakhs based on 123 profiles.
How much money do day traders with $10,000 accounts make per day on average? ›
With a $10,000 account, a good day might bring in a five percent gain, which is $500. However, day traders also need to consider fixed costs such as commissions charged by brokers. These commissions can eat into profits, and day traders need to earn enough to overcome these fees [2].
