About… 50k
Well, at least somebody asks for the downside numbers and not for the upside numbers. Great question!
I can just say how I handled that. When I first started, I put in $ 1k. If I would have lost that, I would not trade anymore. I must say I had before I put the first order in the idea to let trade my own developed bots. Albeit I knew I had to trade by hand to get the knowledge how to let bots trade.
In my experience what I can see is that my bots usually trade profitable and if I trade by hand I can’t make money consistently, because I do experiment too much. Well, with those experiments I get opportunities in the future.
After almost 2 years of fx learning and trading with a few months less it looks like this:
I made around 30% with my first broker. Deposited 1k and withdrawal around 1.3k. Albeit my account was after 4 months at 2k. In Between also again up to 1.6k. 1 or 2 years is not much time, so that’s why this account was going up and down like that.
I have now another account with a little more money, but now I am in loss. Albeit far away from a blown account. This is mostly related to some experiments in the beginning with this account.
My reason why I continue now is that I believe I have an edge with my bots at least over some months. I feel still as a newbie after only around 2 years fx knowledge, but as the years go by, I will have more and more experience what the expectation will be over the long run. So far I can’t complain. If you look at it like a career, any career in the world with high skills has a steep learning curve. In one account I even got a nice profit while learning and in the other account the loss is tiny if you compare that to any other high skilled education.
If I compare the loss I am in now and what is hopefully temporary, then this is as well nothing compared to losses of some stocks. Fx is treated by me as high risk money and as such I can afford to lose all.
My goal right now is to grow that account back to b/e consistently and then beyond that. Surprised, lol? Well, lets say I would blow that account next year or so, then I would stop trading fx. Because that would show, for whatever reason, that my past profit was a random event. If I reach my goal after 1-2 years, then it would imho show that I can make money consistently over some years. I would not only have made my money then with it, which would me set in position to continue, but I would also have more experience and can trust more in trading. I guess my limit is 5 years after which I would know how my personal perfomance is.
Sorry for rambling, but I think it might help more than just a number and nobody knows where my goals are.
Well I’d say if you’ve been working at this for 2 years now, probably no event will just make you up and quit like that. Losses and blown accounts can always be looked at as a positive IMHO. The best insight into my own trading seems to come through failures along the way.
If you never stumbled along the way, you might think it was as easy as it looks on the surface … and that just leads to ****y stupid trades. A perfect example of this was the run-up to the Internet bubble around 2000, whenever ‘everybody’ was making money trading stocks.
Thanks! Thats the kind of answer i was looking for lol. Quiting sounds negative but for me its a good thing in fx.
knowing when to quit with a good reason. All agree that SL in trade is important. Why not put SL in bank account? Lol
Btw im far from quiting, i like fx 
I think “how much” is relative. You need first to make your “budget for lose” and not spent more than this sum. For me this budget was $500 but I lose only 300 so I “earned” 200 . After this I got a little bit experience and now it’s fine.
Seriously man, your looking at this all wrong.
You asked how much losing is normal? What is normal is whatever your inital investment is. Period. If you initial investment is $100 bucks, you can expect to lost all of it, or almost all of it, while learning.
If your initial investment is $10,000. you can expect to lost most of it, if not all of it, while learning.
If your initial investment is $20,000. you can expect to lose most of it, if not all of it, while learning.
Think of it this way. You are going to pay both time and money for your education. The time you invest here will be the same regardless of your starting balance… If you take a trade and risk 1% of your account on that single trade, you learn the same lessons regardless of whether that 1% equals $1.00, or whether that 1% equals $1,000
Amazing business this one. You get to invest as much or as little as you want to become successful. Once you are successful, you end up making a ton of money, regardless of whether you invested $1000 to learn, or $100,000.
Your initial investment does NOT determine your final profit. Your initial investment DOES determine how much you will pay to learn how to be successful. Less really is more in this case.
Jay
like the poster above I would say if your a new trader and its your first live account 100% loss would be normal. Keep that in mind when you fund it. If your broker will not let you trade a $500 account with the same leverage and risk management as they would a $30,000 account get a new broker.
I do not agree that no matter what account size you have that you will lose it all. It is about proper risk management. Just because 1% of balance is the norm does not mean you need to risk that much on a trade while learning.
I put 10k in my account and am only risking $10-20 a trade.
The lessons learned do not need to be expensive. You c an also sim trade for free as long as you are disciplined enough to treat your decision making as if you are using real money. I have learned a great deal this way at no cost.
Enchanted, there are exceptions in every situation in life, and trading is not different. You are correct about proper risk management. But it also includes the mental fortitude to have rules, and confidence in those rules, the emotional strength to not let a loss reflect on your person, or your future.
This in and of itself requires most new traders to learn it…as they often do NOT start with the correct psychology to trade successfully. They often fall prone to making emotional decisions, overleveraging, over trading, and revenge trading.
If you already have these components mastered before you take your first trade with real money, congratulations… most are simply not prepared for this however.
Most people are not willing to risk even 1% when the start trading. You are by far the exception here. Mind you, the OP was saying something along the lines of risking 2%+ per trade. A person entering the marketplace with this as a question generally has the wrong idea about what it will take to be successful in trading.
Also, most people do not gain as much from sim as they would real money. I highly advise sim trading for those few that can treat it as real money. Most can’t. so i don’t advise it for most.
Furthermore, the vast majority of people who open accounts lose money, and never end up making a profit. Not gonna to into statistics of that here, since may other threads have been dedicated to it, not to mention thousands of articles, books, and even lawsuits. All of them come to the same conclusion: the majority of people who have ever tried to trade ended up being down more money than they were up when they placed their last trade…whatever, and whenever that was.
My point was not literally that every one who opens an account will lose it all. My point was that to trade forex successfully will take both time, and money. The time it takes to acheive success will be the same regardless of the amount spent learning.
The OP is infering that his deposit will somehow reflect how much he is willing to spend to learn. My rebuttle was not to the point that everyone takes a first account down to zero. it’s that nearly everyone loses before they win…and how much you lose is dependent on how much risk you put on.
Jay
I do not agree that no matter what account size you have that you will lose it all. It is about proper risk management. Just because 1% of balance is the norm does not mean you need to risk that much on a trade while learning. I put 10k in my account and am only risking $10-20 a trade. The lessons learned do not need to be expensive. You c an also sim trade for free as long as you are disciplined enough to treat your decision making as if you are using real money. I have learned a great deal this way at no cost.
The scenerio above is not the normal situation for an excited new trader. What you describe is great and it sounds like it will work for you. I would never recomend a new trader start with a $10,000 account because what I said is true most first accounts blow up. Your absoloutly correct in the idea that proper MM is what will keep your account alive. Most people dont get that until they experince the reality of bad MM. Good Luck.
got it and agree…did not mean to be argumentative.
Yes, discipline is key to it all. it is key to not losing money and key to not overtrading and waiting for your trade to line up.
I have family and friends who laugh at me when they ask me how I am doing and (when I started trading stocks first) I said i am up $1.39. They look at me kinda funny and i say, no really…I am trading 1 stock…only 1 stock. When I am consistently profitable I will start adding more zero’s to my trade size.
People closest to me even are pressuring me to trade ‘for real’ and i have to stand firm knowing myself and knowing I am not ready to risk more of my hard earned capital. When i am ready, i will know…so i trade 1 stock, or 1 mini lot, no overnight risk and small stops until my performance tells me I am ready for more…
Enchanted, I think your response is exactly how the OP, or any new trader, should be thinking.
OP: If you want to one day have a career as a trader, just copy Enchanted. Seriously. It’ll cost very little, and someday, probably be very rewarding.
Jay
Thanks for your opinions guys. I thought my question is simple.
What I meant by “normal” is an amount of money the most forex traders ordinarily lose before they start to profit or begin to quit. I’ll make an exaggerated example…
losing 1billion is not normal to lose in forex. you should consult a doctor if you are still trying to get it back instead of quitting.
5 cents is normal to lose, all forex traders lose this so don’t worry you are still doing good and belongs to the majority of forex traders. Go study more and try again.
Maybe I’m just asking what is acceptable amount of money to lose.
Some people would say that it depends how rich you are or money you can afford to lose.
Even If I can afford to lose 5 trillion dollars, it doesn’t mean I should continue right? We rather put it to charity than to waste in a business that we can’t be successfull right? sorry if this is not clear…English is not my 1st language.
Akeame, your question is like asking “how much does a normal house cost in the world”. It could cost a few thousand, it could cost a few hundered thousand…or argueably more. forget normal man. focus on what YOU are willing to lose. thats all that matters.
successful traders, almost as a rule, run by their own standards. don’t try to compare yourself to the rest. define for yourself what the average person is willing to lose.Try to learn what you need with less than a thousand. that’ll put u ahead of the curve.
More than money…i would be asking “how much TIME am i willing to invest before i call it quits.” I opened an account in 2005. I never made a penny until 2009. I only lost about 10K learning. but I spent 3.5 years…off and on. Personally, I would have spent 10 years to learn, but that’s just me.
A time deadline should be what your considering. I dare say if you are already trying to define your persistance by what the “average” person does… save your money and go do something else. The average (over 90%) of active traders are not able to make money year after year.
So, I guess if you really want an answer your question, I’d say the average person loses between $2000 - $35,000 to learn how to trade… and they spend between 3 months and 5 years trying to succeed, and 90% of them don’t make it. But as I hope you can see, this answer isn’t actually very helpful.
Define for yourself… one of the first steps to trading success is to do things different than the average.
Good luck,
Jay
Jay
…the book the [U][B]Outliers[/B][/U] (great book) quantifies success in terms of hours spent learning and mastering any craft. used Bill Gates, musicians (believe the likes of the beatles, eric clapton) and other famous and successful people as examples…with the argument that these people were not born geniuses or special other than the fact they were willing to devote the time and energy in pursuit of the success (their special quality being discipline and work ethic to excel).
I do not have book in front of me (so from memory)…benchmarks in terms of hours are:
2,000 hours to feel like your feet are under you and you can explain things to others (some success, you know what you don’t know and seek more knowledge)…this equates to 50hrs week * 48 weeks (subtracting for holidays/vacation) is approx 1 year
5,000 hours to feel proficient (more success, can teach others)–approximately 2 years (still at 50+hrs week including any reading/classes you do in spare time to gain more knowledge…not JUST actual trading time).
10,000 hours to be an expert (do it without thinking…some traders say the point of it being boring)–4+years
Personally, I am working hard to get to my first goal of 2,000 hours…it is hard work but i feel worth every minute–i am a newbie but am not kidding myself on the path to be walked…
Good luck to you in reaching your own goals!
Hi, this is my first post in this forum, and I must say this is great place to learn about forex trading. Im new in this business (4 months in live account) and Im wondering not how much loss is normal, because I understand that we cant symple measure how many dollars we will loose before say: something is wrong! But we should measure in terms of %, considering at the same time our R/R ratio.
As for me, in my young career I had a modest success until I hit this month, in wich Im 7.5% drawdown, (2-11 record) and I usually risk 1% or less.
I believe this is normal (albeit very demoralizing), but I would like to know if some of you had experienced this kind of bad streaks, or how often does it occurs throughout a year?
I think that most traders suffer a drawdown at some point or another - I never heard of a strategy that wins every week in all markets.
I am finding the market pretty choppy at the moment - it is giving up trading opportunities, but also is prone to being less predictable than it has been at some points in the past. For me, spring/early summer was great, there were wall-to-wall setups, most of which played out well. August, September and October have been much choppier, we are seeing a few reversals at the moment. The SNB and BoJ interventions (and, of course, the economic issues that prompted them) have taken some confidence out of the market in some quarters, and to my eye things have yet to settle down. Earlier in the year I had 25 winners out of a run of 26 trades. Last month I had three losing trades in a row, two winners and then two more losers. I am still up overall, but am finding the market less consistent, so have pulled in my TP targets etc. to ride it out. I am well up on the year, despite a disappointing summer.
So to find a positive for you: you have started your trading career in a difficult period. If you can make even a reasonable fist of it at the moment, that bodes very well for your trading future, when things have settled down a little. If you have faith in your strategy, if backtesting/experience shows that it works - and if you are certain that it did not rely on some feature of the market that is gone for good - then just keep executing your trades mechanically and, over the medium term, it should come good. It is tough to keep pulling the trigger following a few losses, but stick with it, it happens and does not mean that this is not for you.
In terms of how often it occurs during the year, normally, for me, August and Christmas are bad, the rest of the year is fine. But this is not a normal year!!
ST
Downdraws are never fun I am going through a nice drawdown ATM. My opinion on this is it is good to have a drawdown early on in tradeing for it does 2 things. First it humbles you when it comes to the market and teaches you that you are not always right and no matter how many names you call the market, no matter how many things you throw at your computer screen it will not change anything so you just got to accept it. The other thing you can get from it is experience on how to survive it (assuming you make it though) and what to do about it. Now I know your question here is going to be what do you do about it? My answer is NOTHING keep trading the only thing you can do is lower risk to keep that in check but as soon as you start second guessing yourself things will go from bad to worse.
I started live trading about 8 weeks ago, with only 2 weeks of demo. And i am in a draw down about 16% of my total starting capital. It sucks, it takes the soul out of me to me honest. At least Simon said this time is difficult but i would say that I am definitely a major part of my own failures. I really need to refine myself as well but external factors not with standing getting down is really tough. Especially when you are starting you feel like your making progress and learning more, only to fall deeper into a hole. I put in about 6 hours on average everyday thinking about trading, trading, chatting about trading, reading and posting forum entries. I am at about 420 hours total i have a long long ways to go. But its cool that soon i will be 25% of the way to getting my feet under me. that’s kinda cool
I know what you mean, it is tough taking some knocks, and suffering losses. But you are very early on in your trading career, and it is amazing how you can rebuild an account once you hit a nice run. Each market suits different approaches, so everyone will have different experience. I am largely a trend or range trader, looking for decent runs - the volatility makes that hard at the moment. Scalping - which is not really me - can work well in this market, capturing small moves before they have a chance to bite you back. The market will evolve again and move towards other styles.
You are active on this site early on, you understand a bit about why the losses are happening… so stick with it. One day you will look back and laugh about this period!
ST