ROI on Forex Trading

External question — Personal Finance Stack Exchange Author: Pip Original post: https://money.stackexchange.com/questions/33734 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I have lately been reading up on what Forex Trading is and how it works. In many sources, it is described that a consistent investor can generate 15% return annually. My question is, what is this return based on? Is it based on your margin or is it based on your total position (which includes leverage). Lets say you have a margin of $1000 and your broker provides you with a leverage of 100:1 , so you have a position of $100,000 . Now is your return 15% of $1000 = $150 or is it 15% of $100,000 = $15,000 ?

External answer — Personal Finance Stack Exchange Author: Victor Original post: https://money.stackexchange.com/a/33736 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. To make a return of 15% on $100k the currency you are trading would have to move by 15%. This does not happen to often. In FX trading you are mostly trying to capture and profit from small moves in a currency pair. Based on this, in my opinion, the 15% return would be based on your own capital, ie. the $1000. This would be how I would work out my return when dealing with margin.

External answer — Personal Finance Stack Exchange Author: passing through Original post: https://money.stackexchange.com/a/35355 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Please, please don't believe all the financial sales pitches you will hear in your life. Consistent?? give me a break. The returns promised include the effects of leverage. That same leverage can also generate 100% losses.