$250 Investment with 3% monthly profit?

Beginner Questions
21

Well ideasibscribe, have you ever heard the phrase, “Money goes to money”?

You’ve got to have money to make money. Any form of investment needs money in order to make money. Take a buy to let property: if you put the minimum deposit down on a property, most of your rent is going to go towards the mortgage so you get minimum profit that gets bigger as the years go on. Now if you buy the same property outright, all your rent is then profit so you’re making more money.

So again, money goes to money. It’s kind of the same with trading.

Yes some traders make more than 3% but if we could all make 20% per month then I’m pretty sure that we’d have a world full of forex traders. Forex is not a get rich quick scheme & I think that your expectations may be skewed.

22

Yes, I’ve heard that phrase, just now.
However, I have also heard the phrase “Money makes money” and that’s obviously true. It’s one of those [I]truisms[/I].
I don’t, however, honestly care because I’ve already placed the preconditions of my question to this OP for it’s relevance.
The preconditions are an initial capital investment of $1,000. In this OP, I start with $1k and don’t add anything else.
The question is whether the time and energy spent through years of trading is worth the initial investment of $1k if the monthly profit is only 3%. I don’t normally have extra money like this to use for something like this. So I should not and do not expect to be having any extra money after this. My wife has been showing a healthy dose of skepticism as I’ve been spending a lot of our time researching Forex. This isn’t about someone who can keep adding funds over time to an account. This is about someone who works a job that barely makes enough to pay for his family and wants to know if Forex is worth our time.

The point of this thread is to understand what expectations to have in the first place. This is just one of my ways of doing some research. I became interested in Forex because I saw someone take $250USD and make a living off of it. The guy who introduced me to this is doing pretty good for himself and he had the same job as me. He now trades Forex for a living. That’s where I want to be.
There will very, very likely never be a moment in my life where I can invest $10,000.00 into Forex… That’s so unrealistic for someone who makes just above minimum wage.
What some of you guys are implying here is that anyone at the bottom, like myself, don’t make enough money already for Forex to be a realistic investment. I am getting mixed signals, however, as I am seeing people make enough to live off of ($15-$100/per day) and then I am only reading on this site that 3% is the amount the “professionals” make… I want to know who these professionals are, why you call them “professionals”, why they only make 3% per month, why there are others that make much more than that, and why no one here at Babypips wants to talk about those.

I don’t want to have to give up on Forex because of the garbage 3% per month you guys are promising is the only expectation to have. If that garbage is true, the whole point is that it would be more responsible to give up Forex for the sake of my family.

23

NOTE: Don’t get me wrong - I already know that 3% is not “garbage”… when you have a damn bucket-load of cash to throw at Forex!!
(And bucket-load is a loose term that I am applying in this context to an amount of money that would be considered a large sum of money to someone like myself.)

24

Sorry to re-start an old thread, but I understand where you are coming from, ideasonscribe.

On the one hand, I could say to you that 3% a month is fantastic. If you could be sure that you could achieve at least 3% a month, that will be, compounded, 42% over the first year. Keep doing this, and you would probably have confidence to add to the bank, and within a few years will see thousands of $.

On the other hand, you, like I, wonder whether the amount of time learning is worth it. What surprises me is that experienced traders seem to give the message that what is paramount is to stick to a good system, (this is the psychological part) and to use good money management. They also say we need years and years to become successful. Well this must sound naïve, but if we have learned the basics, then have/make a system that suits our trading style, why else do we need all those years?

For sake of simplicity, I look at this example as a point I would like to get to. If I trade with at least 1:1 risk to profit, and hope for 60% winning trades, and an average of 1 trade a day, then I can hope for 3 winning trades, and 2 losses, on average, per week. With the golden rule of 1% bank per trade, I could hope for 1% a week, which would be fantastic.
I think the problem you and I face is that finding 1 good trade a day would be difficult if trying to fit it around a day job. Longer time frames could be the answer, but seem very time consuming when using a small bank.

Any advice for us, all you helpful people??

Regards,
Dave.

PS if your friend can make 20% a month, or an average of 240% a year, I would stick like glue to what he says. See below- and that’s compounded yearly!

Starting with $250

Year Interest--------------- Total Interest--------------- Balance

1 £600.00--------------- £600.00--------------- £850.00
2 £2,040.00---------------- £2,640.00--------------- £2,890.00
3 £6,936.00--------------- £9,576.00--------------- £9,826.00
4 £23,582.40--------------- £33,158.40--------------- £33,408.40
5 £80,180.16--------------- £385,951.10--------------- £386,201.10
7 £926,882.65--------------- £1,312,833.75--------------- £4,464,484.76
9 £10,714,763.43--------------- £15,178,998.19-------------- £15,179,248.19
10 £36,430,195.66--------------- £51,609,193.85--------------- £51,609,443.85

Calculation
Base amount: £250.00
Interest Rate: 240%
Effective Annual
Standard l Rate: 240%
Calculation period: 10 years

25

Aiming 3% per month by forex trading is not bad, but low capital makes it very difficult. You are often tempted to use high lot size when you see a juicy setup that eventually goes wrong and make a huge dent in your trading account.

If a trader successfully go through this starting phase of starting with low capital and managing it to a reasonable amount then he can build it to further huge amount.

26

I agree with Dave.

In fact, I think he’s putting it mildly.

There are “trading wizards”, who are household names in the trading world, interviewed by Jack Schwager in his books [I]The Market Wizards[/I] and [I]The New Market Wizards[/I], who aren’t making 20% per month and have never done so for any extended time-period of their whole careers, and they say so, openly. There are also top, professional, highly trained, super-successful experts, earning 7-figure annual bonuses from Goldman Sachs every year, who have never achieved that.

With absolutely no disrespect at all to the OP, I have to suspect that his impression of the “20%-30% per month” [U]average[/U] that his friend steadily and regularly makes may possibly be - for whatever reasons - a somewhat exaggerated perspective. I’ve [I]once[/I] made 20% in a month, myself, with very hard work, a following wind and extreme good luck, so I’m not for a moment suggesting that it’s beyond the realms of credibility.

But “[I]20%-30%[/I]” as an “[U]average[/U]”? Perhaps not so much … :33:

27

Excellent answers from Lexy and Baz…

As for Daveylibra’s calculations, they are too good to be true…

28

Ideaonscribe

With all due respect I think you are trying to fly before you even know how to crawl. If you are a beginner, learn to be profitable first, then think about how many percent you can earn in a month. Don’t look at what others are doing or have already done, and say unless I can have the same kind of results, if not I won’t even bother starting. If you really aspire to achieve what your so-called mentor has achieved, then set your heart to it and achieve it with lots of hard work and perseverance. And if you call him a ‘mentor’ why hasn’t he taught you any trading skills to start off with? My guess is this so called ‘mentor’ is requiring you to buy his trading course for thousands of dollars before he really starts ‘mentoring’ you. Of course he might be the real deal, but I have seen enough of so called ‘forex salesman’ who get rich not because of trading, but due to courses they sell to newbies hoping to get rich through forex or other forms of trading. Have you heard of the saying “Those who can, trade. Those who can’t, teach”?

Besides, what experts(not me) always:say do not trade with money you cant afford to lose. Your situation as you describe right now doesn’t really sound like whatever you can invest into forex trading is going to be money that you can afford to lose.

What my suggestion to you now is work at a day job for now to pay your bills, and go learn all you can about trading from websites like babypips. Then when you feel confident, start demo trading regularly for at least 1-2 hours a day depending on your schedule, trading the products and timeframes that fits this schedule. If you are profitable after 3-6 months, then take whatever spare cash that you can afford to lose, start a live account, and only trade micro lots for another 3-6 months. Bear in mind that the emotions that you experience when there is real money on the line is very different from when it is only demo. Only when you can say that you are consistently profitable can you then look at how many percent you can earn consistently in a month to pay your bills.

What I said above may ruffle your feathers but that is the reality, and you need to know that being a profitable trader does not happen in a day, just like an F1 driver did not become one overnight. Years of hard work must surely precede him becoming a F1 driver. Thus you are looking at a minimum of 1 year or more before becoming a profitable trader. How do I know? Well, I took 5 years before I became consistently profitable. The point is, it can be done, it is achievable, it takes lots of hard work, and it doesn’t happen in a day or a month. Probably years. Can you afford to spend the time and effort to become a profitable trader, given the situation you are in right now? That is a question you have to answer for yourself. Just for inspiration, think of Chris Gardner, the man who inspired the movie “The pursuit of Happyness”. He became a very successful trader despite being a single parent with bills to pay. Go look up his motivational speeches on youtube. If he could do it despite having no trading experience, then you can do it, if you work hard enough. Good luck!

29

ideasonscribe, I totally understand your frustration and you asked a lot of questions I thought about myself. If someone is going to invest £10,000 in a Forex account and can afford to lose that amount of money, then they must have a lot of other money spare in a bank account somewhere as well. So I have often thought, why trade Forex if you have all that money in the first place !!! But I guess some people want more and more and are prepared to risk some of it for more. But being able to risk £10,000, that someone must be pretty well off in the first place to do so.

I have only been trading live for several months, and I invested £100 to start with, because I do not want to risk more and cannot afford to. Yes I have lost money and I am still a novice. I have seen the pitfalls live trading can bring, and I am glad that I didn’t invest more. But trading live is very, very different to demo trading. I’ve decided to change what my initial goals were due to the low amount of funds I initially invested with and my learning experience. Yes i have dreams too, but I have to be realistic. My aim is to make around £15-20 per day if I can for the time being or someone near to that. Most days i’m hitting my targets. Now that may sound pathetic money to some people, but over a month it pays my mortgage or most of it, and it is a double benefit, because i’m not paying that money from my wages. That can be built on as time goes on, so if you take that approach then maybe you can move forward. If you want a ton of money straight away, it isn’t going to happen. I still have loads to learn and in a relatively short space of time I have felt like giving up at times, but I persisted. I still lose often but if i’m near to my current daily goals then I must be doing something right sometimes. I have gone from trading one trade over several days to scalp trading. However, my job allows me to do this, if I had to change my job i’d have to change my strategy. Forex is a learning curve, and I’ve already felt the range of emotions that trading can bring, but I aim to persist and maybe you must to.

30

That’s all about risk. You can jump into HYIPs with 10% daily but risk is exceptionally high or buy US treasuries which yield 2.5% year but we can say it is guaranteed. If we talk about 3% monthly or figures around it I can suggest you PAMMs account, for example I have tied up around 1.5K with Hotforex PAmms and yield is around 1-5% monthly (sometimes drawdowns).
Choose your risk and you’re ready to go!

31

By my calculations $250 at %3 per month for 24 months will end up being $508. I don’t see the problem with that. You’ve doubled your money in two years. That’s a fantastic return on your “investment”

No, the real problem is that you are considering $250 to actually be an investment. It’s not, it’s pocket money. So is $1000. No offense intended, it’s the truth. You can’t start a business with that.

A lot of blown accounts are caused by being under-capitalized and over-leveraged which is exactly what you will be with $1000 capital, unless of course you’re happy to make $1 a day. Don’t get me wrong, you can trade safely with $1000, but you won’t make a living off it any time soon.

You really need a minimum of $5000, but preferably $10000 or more to get properly started.

So, one plan would be to learn and demo trade while saving up the capital. If you can’t get consistently profitable on demo after a few years, then at least you have some savings that can be used for other things.

Just my 2 cents.

32

Great point Kenshin. Trading is still down to willingness to risk and having the capital to do it. My advise to a Trader and this comes after years of being on this forum alone, reading comments, seeing traders come and go, educators come and go, hot rods come and go, etc. I am of the opinion that it is better a trader sets aside $300-$500 a month and risks on a high probability trade all in one go. I have reasons for saying this and it is based on trading cost factors and market volatility. You can do this as an options trade or normal cash trade. Even at that on the months you are right, you should make $1000- $1500 gross. 1 trade month, 12 trades a year, get 6 right, you will earn 3k for the year.

I guess we can see where I am gong with this… It is optimal, believe you me, try anything else between volatility and trading cost, you cannot survive. The game is only viable when you start trading 5 digits and over, this means bigger volume. Don’t forget there other asset classes, like stocks and derivatives like commodity futures.

33

3% a month is crap.

The big guys can be happy with 3% because they are using $1M and up as leverage, and then using the, " Your bank pays you 1.6% a year, so I will double that, just to get your money to use again as leverage.

If your a retail trader, you should be practicing to make at least 25% a month.

Everyone sits on trades aiming for 200 pips that might take weeks, and if you lose your losing 100 pips at best, considering the 2:1

In the mean time while waiting for the 200 pips, the movement made ground of 600, but your still sitting and waiting for your TP to hit, or your SL…

SMH,

Everyone thinks you have 10-15 years, but what if the internet got locked up in your country, NOW, you wasted your time, right?..

Ive said this hundreds of time here, If your willing to even make a trade, Throw the kitchen sink at it, and stop BSin around.

3%, lol… I make that in the first 30 minutes of Market Open on Sunday.

34

[QUOTE=“MoneyNVRSleeps;735319”] 3% a month is crap. The big guys can be happy with 3% because they are using $1M and up as leverage, and then using the, " Your bank pays you 1.6% a year, so I will double that, just to get your money to use again as leverage. If your a retail trader, you should be practicing to make at least 25% a month. Everyone sits on trades aiming for 200 pips that might take weeks, and if you lose your losing 100 pips at best, considering the 2:1 In the mean time while waiting for the 200 pips, the movement made ground of 600, but your still sitting and waiting for your TP to hit, or your SL… SMH, Everyone thinks you have 10-15 years, but what if the internet got locked up in your country, NOW, you wasted your time, right?.. Ive said this hundreds of time here, If your willing to even make a trade, Throw the kitchen sink at it, and stop BSin around. 3%, lol… I make that in the first 30 minutes of Market Open on Sunday.[/QUOTE]

More crap.

35

When you are thinking of high returns, you shouldn’t underestimate risk. You make one time 400% and then you will several times lose. On the other hand, reasonable risk and return expectation is long term strategy.

36

And hows that working out for you in the “5% a day money mangement plan” thread. Apologies, I cannot post links as I apparently need 5 posts to do that.

I deposited a respectable investment (1/5 of my life savings) with three separate forex brokers in 2011 and since then have averaged 4.3% per month with a maximum 16% drawdown. My ea averages six trades a day. The Internet in Australia here has never been ‘locked up’. You are the one who is wasting time. My original forex investment is now nearly 10 times greater. I quit working earlier this year. Nowdays I log into my vps each morning and check that my ea is running correctly. Takes all of five minutes. Mine is not a great plan, and I sometimes get envious of the high % crowd. But I stuck with my plan because it’s extremely safe. i.e. it’s almost impossible to burn my account.

When you get your head out the clouds, you can do the same. Anyone can do this crap. But you need to get back to reality and treat it like a business. Anywhere between 3% to 8% per month will make you rich with a five figure deposit. Anyone getting more than about 10% per month consistently is extremely lucky and is the exception rather than the rule. If you attempt to do the same, you are more than likely going to toast your account every time, as you have been…

Like any business, this one has barriers of entry. One of those is starting with capital, not your lunch money.

37

Good for You.
Bad week for me, *shruggs, I was going for 50%, Didnt pay much attention Thursday, so left some on the table.

43% gain, 27 wins, 0 Loses

38

43% in one week. If only you could sustain that kind of return over 3 months on a $10000 live account. I only made 0.811% last week.

39

And Kenshin, Im not being a smarta$$. I know exactly what your saying, I really do. I dont have 2 quarters to rub together, let alone throw in $5,000. So, I have no option but to trade like I do, and I knew this from day 1. I knew everything I was planning, is like going against the grain. Trust me, I know… I wish I could throw in $10,000 and take the 5% a month, but I just cant do it.

With that being said, Ive practiced like this from the first day, Iv learned a tremendous amount between then and now, Lost alot of $2, $5, $10 and $98 account that was gifted to me, …

I usually get jinxed when I write my numbers down or throw up my FXbook, lol, like clock work, its funny that way. SO, we will see how next week goes, lol… But I now think I have all my pieces in place, and I might be wrong, but Im more right then my last nice run.

To this day, I have horrible outcomes with big pip TPs. For some reason, they always fall short by 1-2 pips, just to retrace and take out my stops. Its why I scalp in chunks.

Then, something else I do, is trade GBPNZD, which is torture, just to get beat up for a few weeks. FEEL THE BURN U S.O.B, LOL… SMH,

Then go back to EG, and it allllll slows down,

I really wanted to go VPS route, but I cant put my strat together for it. I use a combination of indicators together, but the EA wont read it like I do. That really is the Magical way to all this, so Kudos to You, Also takes your mouse finger out of the equation, lol…

Man, keep rockin it, Im not here to pick a fight or bicker, Im actually enjoying life as a WHole for the first time in several years… Feels good to feel giddy again… Feels like everything is finally coming into focus. And it might be because, Im there Bro, Im there… After all this, all the hours I put in, all the frustration, I think I got it… And it feels dam good…

Great Pips to you Bud!!

40

That was my real account numbers,

My practice account hit 49%, 87 trades, and 1 loss of 1/2 a pip, in 3 days, which uses MT4

Had a problem after downloading an Indicator and jammed up my MT4 for a few days, so my real account was traded off my tablet, using another simplified modification to my system.

Ugg, and thats another thing altogether. For some reason my tablet platform was closing out trades at exactly the same time but periodically by days. I never did figure it out to why its doing it, I just dont open a trade at the time now… lol…