Hi, I’ve been thinking of putting some $ in FOREX, I’m a stock trader and think I’m pretty good at it, but want to try forex out. I’d like to know, however, what the real, legitiimate possible returns are at FOREX to get a better idea of the market potential. So I’ll propose some different levels of trading:
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Noob but slightly profitable, not a complete idiot and how long would it take to learn?
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Total expert - but willing to risk a lot of capital for high returns
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Total expert - more cautious, has a large bankroll relative to trades
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Average “good trader” who has a good sized roll and spends a lot of time trading, swing-trading day trading but not intraday trading
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Day trader who’s extremely devoted to it: spends 8+ hours a day trading (kind of like what I like to do)?
Of course, you don’t have to answer all the possilble returns here, but any advice on it would be helpful. Thanks for reading!!!
I’ll try to represent stock market trading to give an example of how I think replies could be constructive:
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Daytrading --> a noob will most likely lose money or make only a marginal amount annually. Stocks can swing wildly and from my own experience, they’d be better off doing long term trading at first, like weekly charts.
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Without using options, a true expert who’s willing to risk a lot can make in excess of 100% a year. Note that this is referring to true experts, probably the top 98%+ of individual traders.
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The same thing, only I feel like these guys perform more like a hedge fund. They have tight risk management controls like hedge funds, and thus they make a lesser amount but still beat the market substantially on average, say 40% a year or so.
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With stocks, this person is limited to their returns just because a. they aren’t experts and b. they have good risk management. From experience, these guys can make 50%+ a year.
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In stocks, they’re essentially the same as number (4) because they’re limited to the market hours of opening. (One of the reasons I might switch to forex is because I’d like to spend more time trading, so the 24hrs/day would be real great).
Note how these numbers I make are obviously subjective and based on my own experience, but I think ballpark estimates could be useful to analyze realistic goals for FOREX and stocks alike.