Reasonable ROI/month for a profitable trader

Beginner Questions
1

Hello everyone,

I’m about to finish the Pipsology school (a couple of hours tops) but haven’t yet been able to figure out a number for a realistic profit/month.

What do you all think a profitable trader can make a month in terms of ROI?. I just want to have a down-to-earth, average expectation on the real numbers Forex has to offer.

I haven’t started on a live account yet, as I believe I still need some more practice on demo accounts. However, I would like to know what is a realistic amount to shoot for in the mid-term. For example, one other poster was shooting for 150% ROI/month, which a lot of you thought was too high, specially for a starting trader.

So, would you think 10%-30% ROI/month is reasonable to expect if you stick to your system, be disciplined, etc?

I was thinking on starting a live account first with 100 USD to get the feel of trading live money, and if all goes well for a couple of months, then slowly jump to 1000 USD. Is it then possible to constantly profit 100-300 USD a month?

I’m trying to see if my figure is believable as this would be my target for the next year or 2. If I can profit that amount a month, it would be a nice extra money without risking my life savings.

I would very much like to listen to all your opinions.

Thanks a lot for your time!

2

I think 10-30% is a reasonable target if you ready to put in the work. I went live for the second time 2 months ago and have made 75% in total. With my first attempt at going live however I started too soon and blew my account in about 3 weeks after some wild swings. I failed miserably the first time as I hadn’t done the groundwork properly.

If you’re prepared to put in at least a year of solid study and practice it’s a reasonable target though there’ll probably be ups and downs along the way as you get more experience. That means a few hours most days of the week. If you don’t have that much time to invest it’ll probably take more than a year to get somewhat consistent but that’s just my opinion. I’d recommend working off demo for maybe 2-4 months more until you’re comfortable with the technical side of trading and have found a trading style / system that suits you. After that opening a $100 micro account would be the way to go so you can get used to using real money. Go with that for a while and then see where you’re at. Good luck!

3

Hi Saganus

I’m in a similar position, though I completed the Babypips school a couple of months ago and have already taken those first tentative steps into demo trading. To be honest, the results were disappointing and I never really felt that I had a grip on what I was doing, if that makes sense. When I got a good result, it always felt more by luck than judgement.

I then came across a thread that’s currently on page two of this forum called ‘What Every New & Or Aspiring Forex Trader… Still Wants To Know’ (sorry I can’t link to it, I don’t have enough posts so it won’t let me) which ws a real eye-opener. Although the content is not all in place yet, it feels like a natural ‘next step’ from the school.

Anyway, in answer to your original question, my expectations once trading (which will be after at least six months of demoing a strategy) are quite a lot lower than they were originally. Take a look through the first videos to see the reasoning behind this. When starting out, 6% per month would make me more than happy. It’s a beginning that can be built upon, and from what I have seen it’s a hell of a lot better than many who try Forex out achieve!

Those are my thoughts as a fellow newbie… I’m sure the more experienced people will give you a far better insight though.

Best wishes.

4

This question is asked all the time, seriously. You should maybe look at getting a consistently profitable system down first, before worrying how much ROI can be made a month. Even if you were trading live, results for one whole year are not indicative of what you can make the next year. On another point, you said you were looking to fund your account with $100. In my personal opinion, nobody can give forex a true ‘shot’ with this minimal sum of capital. You may have heard before that you need to treat forex like a business to make money. Well what kind of capital is $100 really? Using proper money and risk management, your potential returns would be so minimal I imagine you would question why you are doing it. If however, you just want to use $100 instead of a demo account to learn some basics, by all means, that makes sense.

5

Hello all,

I have been a live FOREX trader now for about 9 months - after about 6 months demo trading and reading every FOREX documentation I could find.

In the beginning I started with a $1000 USD account and for the first few months I was averaging about 7-8% (well - to tell the truth my first ever live trading month resulted in a 3% loss but I put that down to overtrading and not scrutinizing the trades enough before entering). After about 5 months I upped my account to $10,000 USD and I am now averaging 15-20% a month - though this month I am currently at break even with less then a week to go - need to get moving on it.

My advice is in the beginning start with low % risk per trade - say 1-1.5% per trade. Though it won’t look like much money when you win, it will also not be too big a deal when you lose - and when you start the losses do hit home big time. Once you get comfortable and consistently profitable on a monthly basis up your Risk / Reward ratio - I currently use 3% per trade and never have more then 3 trades open at the same time.

I also reinforce what has been said before - it all comes down to having confidence in your chosen technique. I have 3 techniques that I use on a regular basis and they are spread across the 15 minute - 1 hour and Daily charts. When I’m not having any luck with one technique I spend more time on the others. May not work for everyone but it does for me.

Remember - FOREX is not a get rich quick scheme - it takes time to build up your confidence and ability so don’t expect to be bringing home 30% per month straight away.

6

Hello guys,

First of all thanks a lot for your responses. I truly appreciate them and feel very much at home here at babypips because of this :slight_smile:

[B]PipBandit,[/B] thanks a lot for your advice and encouragement. I am ready to put in the work, and part of it is getting all my doubts cleared by more experienced traders, as well as listening to opinions all with different perspectives, to “warm up” if you will. Also, it’s a great feeling “getting in the game” by participating and socializing with fellow tradesmen.

[B]ukdave,[/B] thanks too for your advice and good wishes. Although it might sound weird, this is kinda my own “2nd shot” at Forex, even if both times have been with demo accounts. The first time around I felt exactly like yourself, not getting the grip of it even when I thought I read a lot on the subject and such. It turned out that while reading technical stuff was good, I really never learned about the psychology of it, which this time around I’m trying to, including the excellent presentation you talk about. I’m eagerly waiting for him to complete the series. It opened my eyes about approaching Forex with the correct mindset. The rest comes with study and experience…but won’t if you are soaring high above inside your head.

Thanks for the figures too, it gives me hope to see that I’m not the only one aiming at what some people would say low.

[B]WildChancer[/B], thanks for your advice as well. I’m sure it’s not the first time someone asks this questions but it is a very important part of building an strategy for myself. Perhaps I should clarify some more.

Part of my research about Forex includes, just like I would do with any other business, finding out what other businessmen expect out of their industry. Like say, it’s somewhat known that it’s standard practice for food parlors to charge 300% or more of the ingredients price of whatever you order. In the same venue I’m was interested in knowing what would more experienced traders consider “sane” or “standard” (however loosely this words are used).

Also, about “starting a business” with as little as $100, I know it would be very odd to try this with a “regular” one. However this is such a different beast (to me at least, and still…hoping to change it more sooner than later) that personally I feel I have the need to do it, just to get a bit of the rush of knowing it’s real money and not some demoing. Kinda like a “beta testing” of my own senses and psychology. I appreciate your opinion of it though.

[B]Bucketman[/B], thanks to you too for your advice. I appreciate your cold figures very much. Thanks for being so open about them, which is something I believe could be a sensitive subject for some. I’ll take them into consideration for tuning my system and expectations.

Thanks again to all of you! :slight_smile:

7

Actually that sounds like a pretty good idea - and one that I might well take up myself. The psychology of trading (and the inherent pitfalls it presents) is an important thing to get a grip on, I feel. Well, more than important; it’s vital. And also how that psychology relates to you as an individual. Reading about it and nodding along is all well and good, but we are all different people with different emotional/psychological drivers, so perhaps we need to experience it for real if we are to truly understand it and learn to manage it.

Yep, good idea… many thanks for sharing it.

8

I’m glad that you liked the idea and willing to considerate it!

Maybe it’s just my nature or something, but I almost never do things without trying it “in the small scale”. If there’s something I’ve learned in life is that no matter how much you read/study/think about something, when it comes to facing the real thing, there is no substitute for experience.

Like I said, even when demoing I’ve felt more than once the need to "just hold up a little more, I might double my pips. The grip of greed is so tight and strong that I rather flex my psychological muscles first with an amount I can certainly gamble, until I’m comfortable enough not to consider it gambling anymore, and more like a business.

9

Seriously, if you’re making a consistent 5% a month, you’re an excellent trader.

10

And whoever thinks you can make 50% a month forever is dreaming.

11

Guys would you recommend a demo account please. thanks

12

I think it’s a good idea if you search about " Bill Lipschutz " . As I know , he is a famous trader . He is managing his company that is called " Hathersage " . Over the past 15 years, Hathersage has racked up an 18.8 percent average annual return. Only once in that period did monthly losses ever exceed 5 percent.