How much is the Trader’s salary?
What is the salary of a trader? Often hear the profession of traders, but still do not understand the question of the entry of a trader. So, a forex trader can trade for himself or another party with certain agreements. He is an independent trader. But there are also those who can work for a large broker, bank, financial institution or investment company. Those like this are usually referred to as institutional traders.
Trading for yourself or other parties (clients) certainly does not require high formal education requirements, as long as your clients believe in trading achievements or those who recommend you. However, the story will be different if you work for a large broker, bank or investment company. Besides being asked to show proof of trading achievements (for those who have experience), you are also required to pass a series of tests and meet the requirements of formal education according to the provisions.
Large brokers and banks even require certificates from certain regulatory bodies. In the United States, a forex trader must at least pocket Commodity Trading Advisor certificates or Retail Foreign Exchange Dealers from government regulatory agencies such as the National Futures Association (NFA).
If the conditions are already that heavy, how much is the salary of an institutional forex trader in the US? What is the comparison with the salaries of independent traders who are more flexible and free from various conditions?
Salary of Institutional Forex Traders
If you work for a broker, financial institution or investment company in the United States, you will receive a base salary plus a number of bonuses based on work time (in years), as well as trading volume and total profit generated during a certain period. According to a survey of the US Bureau of Labor Statistics (which released Non-Farm Payrolls data) as of 2010, the average salary of forex traders and commodity traders in the US is $ 60.980 per year. For traders who succeed in occupying the top 10% ranking, the salary range can reach $ 104,000 per year.
These numbers do not include bonuses, so you can imagine for yourself how big the salary of institutional forex traders in the United States is. Experienced traders can even earn a base salary of between $ 100,000 to $ 120,000, with bonuses reaching $ 150,000 to $ 250,000 per year.
Burdened with Demands and Lifestyle
This large amount is quite understandable, considering that there are many demands required by financial institutions when recruiting forex traders. Banks, large brokers, and similar financial companies usually take into account traders who have a Masters or Ph.D. in finance, economics, mathematics, or physics. But if your education does not reach that level, you still have a chance if you have a good and proven track record of trading.
According to John McCarthy, Managing Director and Head of Foreign Exchange Trading at ING Capital Markets, LLC, the quality needed by an institutional forex trader is “responsive, open, can feel enjoy dealing with risk pressures, and can work in a time-sensitive environment and risk. “
Institutional Trader’s Work Atmosphere
In the US, forex trading jobs are a separate lifestyle. The market opens at 5am Monday Australian time, and closes at 5pm Friday New York time. If your location is in New York and trading in Asian and European markets, you must be ready at the trading table from morning to late at night. For a forex trader, working 12 hours a day is not surprising. You are indeed paid to live a lifestyle like that; trading or sleeping, of course except on Saturdays and Sundays.
Salary of Independent Forex Traders
Now about the salary of an independent trader, there is something interesting. This group is the type that includes general traders and maybe you meet most often in forums or online communities. Retail traders who open individual accounts at forex brokers, account managers who manage client funds through the PAMM program, and signal providers on social trading and copy trading are included in the category of independent traders. Even just by opening a new account at a forex broker, you can already be said to be an independent forex trader.
So what is the salary of an independent trader actually? When discussing this problem, the more appropriate term is actually not a salary, but a gain or profit that is a source of income for independent forex traders. Why? As a trader who works separately from a particular institution, you are not bound by the provisions of the company. There is no boss who pays you, and the level of income depends entirely on your profits as an independent trader.
Unfortunately, there is no official data that conducts a systematic survey of the annual gain of independent forex traders. In addition because the system is not centralized, not all traders are willing to disclose their actual gains. Profit trading is also not something that can be measured absolutely like the salary of an institutional forex trader.
Every independent trader usually has their own profit target which is still an estimate, not an acquisition that can be 100% achieved. This is because in forex trading, profit and loss is not something that can be predicted with certainty. Even professionals who have carved a record gain of up to thousands of percent in a short time have experienced a decrease in profit or even experienced a loss.
Therefore, the “salary” of independent forex traders per year is usually determined in the range, usually between 20% -30% or $ 1000- $ 2000. The most important thing to note if you are a trader like this is trading consistency. Even if you later become an account manager or signal provider that can reap the “salary” of forex traders additional from investor or follower commissions, you still need to maintain consistency of performance. That is because in the PAMM system or social trading, followers are free to leave any trader who he deems failed to maintain the level of profitability properly.
Anyone Can Become an Independent Trader
Even though it is not guaranteed with a fixed salary per year, independent forex traders have the convenience that no well-paid institutional trader has. Because this is an individual job, you are not required to have a higher education background and are not bound by company demands to work at certain hours. Anyone can become an independent trader whenever and wherever.