Salary of a Trader: Comparison Between Institutional and Independent Traders

Forex traders can receive an annual salary if they work as institutional traders. However, how much is their salary and how does it compare to the salary of independent forex traders?

Institutional Forex Trader Salary

Institutional forex traders working for large brokers, banks, financial institutions, or investment companies in the United States typically receive a base salary plus a number of bonuses based on the length of service, trading volume, and total profit generated during a certain period.

According to the U.S. Bureau of Labor Statistics survey in 2010, the average salary for forex traders and commodity traders in the U.S. was around $60,980 per year. Traders who successfully rank in the top 10% can earn salaries of up to around $104,000 per year. These figures do not include bonuses, so institutional forex trader salaries can reach significant amounts.

Experienced traders can even receive base salaries ranging from $100,000 to $120,000 per year, with bonuses ranging from $150,000 to $250,000 per year. However, institutional traders are usually burdened with various demands and a rigorous lifestyle, including high formal education requirements and long working hours.

Independent Forex Trader Salary

On the other hand, independent forex traders do not receive fixed salaries like institutional traders. They rely on their trading profitability as a source of income. Independent traders can trade for themselves or for clients under specific agreements.

Independent traders fall into categories such as retail traders who open individual accounts with forex brokers, account managers who manage client funds through PAMM programs, or signal providers in social trading and copy trading.

Although there is no official data on the salaries of independent forex traders, their profits usually range from 20% to 30% of the total profit they generate, or between $1,000 to $2,000 per year. However, it is important to note that profits in forex trading cannot always be predicted with certainty, and consistent performance is the key to success for independent traders.

Although institutional traders may receive large salaries and various other benefits, independent traders have greater freedom and flexibility in pursuing their trading careers. Anyone, including stay-at-home moms, can become independent traders if they have the necessary skills and knowledge to generate consistent profits.

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