Expectations

Beginner Questions
1

Hi!

I’ve been a on line poker player for a few years.
Since I live in Europe but get my money from the US mostly I thought I should at least get the basics of forex trading.
This site looks like the perfect start but I got some questions. I know that there are no exact answers, but if you could try to estimate or share from your own experience, I’d be happy.

How much would a decent trader make that dedicates about 2 hours a day trading and analyzing, starting out with a bankroll of $1 000?

How much would a decent trader make that dedicates about 2 hours a day trading and analyzing, starting out with a bankroll of $10 000?

How much would a decent trader make that dedicates about 30 min a day trading and analyzing, starting out with a bankroll of $1 000?

How much would a decent trader make that dedicates about 30 min a day trading and analyzing, starting out with a bankroll of $10 000?

How many forex day traders are there worldwide?

How many % of the trades are good, with medium risk/reward approach?
(The high variance in poker is a big reason for me to trying this) If this question is bad formulated, due to my English or due to lack of understanding the trading maybe someone could give me a good example of how many days of the months they make money forex trading?

Is it better or equally effective to dedicate 1 hour a day every day to this or is it equally effective doing it 2 days a week x 3.5h?

Are some days, months or hours generally better than others?

/Thanx

2

I’m afraid there is no way to accurately answer your questions. The market is fluid, it can change anytime, sooo may variables that can determine your success or failure and the biggest variable is what you called a “decent trader”. How do you measure your “decent trader’s” knowledge, skills, instinc, grasp, aptitude, flexibility, etc?

In my opinion, sucess in this market is an individual thing.

3

I understand that there are no accurate answers to my question. I just started the school here at babypips.

But IMO, and what I guess, please correct me if I’m wrong. The graduates from babypips have more or less the same schooling. So they think a lot a like and talk to each other about trading,theory and opportunities/tips.
There are some that will do poor, others good, very good and a few exceptionally well.
So I guess a better way to formulate the question might be. How much does the top 10% of the day traders working with a $10k averege per hour?
$20, $40, $60, $80, $100, $ 150 or more?

I see so many parallels to poker, where your decisions are taken based on unconfirmed facts and the risc/reward ratio is important to your results.
And you can’t say exactly how much a good poker player should make per hour. But if I know how which limits he play I can say how much would be considered, mediocre, good, very good and crazy good.
Most winning players makes their decisions based on their education, they’ve read the same books and frequent the same forum and they play similar opponents. And their results are similar if they have a similar bankroll.
Intelligence and luck plays a smaller role than most people think. And just following the right advices takes you a long way.

Don’t you have expectations like making 4k a month?
And don’t you assume that a day trader making $20/h with a 10k bankroll is bad at what he’s doing?

4

I can’t compare Forex trading to Gambling actually, Gambling might win some but will probably end losing capital. So Forex decisions should be taken upon appropriate strategy that have net profitable positions.

Expectations are nearly impossible. Making some cash off forex trading does not only depend on the trader, but on the mood of markets, holiday sessions, yesterday as a near example.

You enter the trade when the opportunity arises, and that opportunity arises after a successful formula from your system. How much you earn, is a hard question.

Average, High-risk investors can make more profits. But Low-risk investors with a much better strategy can compete with High-risk investors some times.

Risk management is up to you. But the quality of system used to determine entries and exits should be a main factor to decide your profit expectations.

5

I think you can compare gambling and trading and I’m not the first to suggest it. Gambling without having an equity edge is IMO dumb. And it will cause you to lose money in the long run.
Over 3 years I’ve had 2 months where I actually lost money playing poker, still I lose around 2-3 days a week. And I expect to average around $50/h when I sit down to play.

But let me rephrase once again.
How much do you all expect to make this year and based on; hours put in/system/experience/bankroll etc…?
If you have no vision of how much you should make trading you are no very different from a poker player that plays without an idea of how much they should win, and those who play poker that way are not the best players.

And also if you don’t compare your results with others how do you know if you are good or need to get better?

Now I’m going to finish the school and see what my next step will be.
Maybe I’ll find out that these questions have no answers not even estimations.

6

Hi gambler,
You are not really serious are you? well if you are, your best bet would be news trading. But good luck finding a broker for news trading which is simillar to gambling. I dont think forex is for you. Because a realistic figure for a forex trader is 30 to 50% profit per year. I ended up with over 400% last year, but that after full 1 year of demo trading, testing more than 2000 indicators, over 250 strategies on different market conditions , 5-10hours of every single trading day. And finally when I felt comfortable, I started a live account and since then I still learn something new everyday. I trade 20 hrs a day covering all three market sessions every single trading day and usually I fall a sleep on my keyboard. May be inabout another 6 months I’m going to employ couple of people , train them and have my own 24hr trading room.

I hope you can see through what I’m trying to say. Forex is definitly not a guessing game like gambling. You cant toss a coin and buy or sell a currency pair. There are 100 million things such as technical and fundamental analysis,volumes,momentems,money managemnt,hi’s & low’s,daily trend,hourly trend,monthly trend,pivots,trend strenght etc etc etc have to be considered before you click that buy or sell button. So if you think forex is gambling obviously you are not educated about the subject much.

Good luck:rolleyes:

7

Well, I think Money management is key, plus I also think the exit is much more important than the entry, so even with all the indicators, it really doesn’t matter when to get in (unless of course its against big news for a specific currency). Some people trade intuitively and make a killing, others have ways besides technical and fundamental and are quite successfull. I have a friend who is into poker, and there are some similarities. Patience, Money management, cutting losses, and knowing when to hold em’ are needed in both. I think it is good and essential to have goals but based on trading conditions and techniques, you can’t assign a per hour amount. For instance, I trade medium term, so some days I don’t even trade and others I do, but it takes time to hold into my position, so maybe for a whole week I hold on, and after that I make nice profit once I close it in a day. If you day trade obviously it is different but you can’t calculate per hour, since some days you end up with negative profit. Most volatile is at London open, so you can make the most or lose the most at that time. You can only expect to win 40% of the time because there are five options (against/with/whipsaw/ with then against/against then with) - that may be confusing. Anyways what I am saying is that you shouldn’t base your expectations on others. Doing this will only frustrate you and not help with your success in the market, you gotta take is slow, but gradual, to build it up. Think about it If you see someone making a nice profit and your in a drawdown, your going to get angry, and it will afect your trading. Yearly you may have a goal of 25-40%, but let’s face it you should always challenge yourself to do better - complacency leads to failure. Even though the average successful person in the market makes 20-30% since your just starting out, I would get a feel for the market, and not worry to much on how much to make, once you start trading, you’ll understand.

Stay Cool, Take it Easy!

8

“a realistic figure for a forex trader is 30 to 50% profit per year.” that was the kind of answer I was looking for, but I understand that it’s very oversimplified and that a day trader usually makes more than a swing trader etc…
But thanks for telling how you have done, more stories of how others first time as a trader have been would be much appreciated.

I guessed that the poker-trading parallel would be controversial. Still I think it’s much the same.

You say:
“There are 100 million things such as technical and fundamental analysis,volumes,momentems,money managemnt,hi’s & low’s,daily trend,hourly trend,monthly trend,pivots,trend strenght etc etc etc have to be considered before you click that buy or sell button.”

I say
"There are 100 million things such as game theory, cards, odds, implied odds, implied reverse odds, outs, counter outs, position, relative position, tournament, ring game dead-money, on-line, off-line, type of poker, limit, site, time of the day, week, month, money management on and off table, amount of tables to play, risk/reward ratio, type of opponent that have acted, type of opponent yet to act, mood at the table, etc etc etc".
have to be considered before you click that fold, raise or call. Most people don’t know this or don’t understand how these variables work together and that’s why most people lose money.

To me it’s seams similar. Mostly because you have to learn balance a lot of wage information and use your education to “see” the future and act accordingly choosing the correct action of a few alternatives. In poker fold, raise or call in trading sell or buy. Poker players also use statistical programs.

9

Thanks Shadow, you got what I wanted to know.

10

Gambler,
I see what you’re asking but I think everyone has different financial goals and/or their own opinion on what’s good. It can be very difficult to compare since what i think is good is probably different from what you think. For instance, I play poker too i and I try to make $20 a sitting. So you can see I have a different poker objective than you…
I know this already has been pointed out to you but i just wanted to emphasize that the answer is difficult to answer since it asks for a subjective response

Anyway, i think maybe if you go through the school you will have a basic understanding of the market and will have a better idea on how to answer the question for yourself…
Good luck.

11

gambler;4005
How much do you all expect to make this year and based on; hours put in/system/experience/bankroll etc…?

Gambler.
Can I make a suggestion? Do the babypips tuition course (highly recommended to all) and open up a demo account with any of the reputable brokers available on and offline. Then give it your best shot! You should soon be able to see whether or not you are going to boom or bust. However, in spite of its “simplistic” look, Forex trading is one of the hardest “easy” ways to make money.
The only thing I would put forward is that you open your Demo account with the same amount of virtual cold hard cash that you are willing (or able) to lose with a live account.
I appreciate that you want a quantifiable answer on “how much” but there are just too many variants to give you a solid answer. Every trader is different and some appear more successful than others. After two years of part time trading I am [I]still [/I]learning - and still looking.
I also would be very wary of anyone in the Forex world that tells you that you can make a 6 figure salary with just a couple of hours a day trading or that you can just “set and forget”. I bought one of those systems once - and my wife is still taking it out of my pocket money…
So, when you start, I wouldn’t mortgage my house to open my first “live” account - but I do wish you all the best in your endevours though.

12

senaka, you do trade alot. Do you trade Tokyo then London then NY sessions?

13

yes. I start 1/2 an hour before the Tokyo open and finish 1/2 an hour after London close. I exclusively day trade GBP/JPY sometimes GBP/USD & GBP/CHF.
I know, working such long hours sucks. But I have my cable T.V and the treadmill next to my computer. I recently replaced my hi-back office chair with a nice comfy sofa… so my wife can watch t.v sitting next to me while I’m on the computer :wink:
Luckey I dont have kidz yet. My wife hasnt asked me for a divorce yet,may be she likes the $$$ signs on my screen. :smiley:

14

Hey Gambler:

Great thread and yes, your questions are extremely relevant. Great traders and great poker players do the exact same things when it comes to taking risk. Good poker players consider things like EV and Pot Odds before and after getting into a hand just as good traders assess “risk/reward” before taking a trade.

Just like poker, what you bring to the table to begin with sets your risk parameters (for instance, you wouldn’t bring a hundred bucks to a 10/20 table and expect to last long). With that in mind, you simply cannot “go to the Forex table” without understanding what the limits are. In Forex, this equates to knowing what a pip is worth and how much to risk. You get to decide for yourself what your risk tolerance is but in the beginning, it should be very, very low.

So, what can you expect? You should expect to lose. It’s the price of admission. There is a saying that goes, “first you lose, then you lose less, then if you hang around long enough, you consistently book gains.”…something like that. If that sounds grim, just think of it as tuition and be willing to pay for your education. Start small so the lessons feel more like lessons and less like torture sessions!

One word of caution about benchmarking your success on $/hour. Market hours are not the same as “poker hours.” In other words, staring at a screen for 12 hours in a 24 hour market will not yield a similar result to banging on the locals for the same period of time in a cash game. There are “best times” to trade - not so with poker. In keeping with the poker vernacular, I would focus on percent of “bets won/lost” and correlate those against size of win versus size of loss. 2%/Week of your bankroll isn’t a bad goal…some might call it aggressive but I think it’s achievable.

Last, I know you didn’t ask this but since you are a poker guy I’ll offer this: there is no such thing as a “best hand” in trading that applies universally. One man’s “Pocket Aces” is another man’s 7/2 off in this gig. In short, you are stuck paving your own way and finding the trading style you like best. No easy answers… The good news is that if you find the answer that works for you, that’s money almost no else can duplicate or take away from you - you only “river” yourself here -

Good luck!

15

Hi gambler,

I’ve been trading FX close to 2 years now. Like many others, I spent my first year learning from online resources. I dedicated my entire waking hours learning whatever I can get my hands on. However, after 1yr with no success I finally decided to get a proper education by doing a course.

As a member of this course, it was a pre-requisite that we double our demo account before trading Live.

I can tell you right now that I’ve achieved this. It took me 3 months of practice before I fully grasped what was taught, then 3months after that I managed to double my account. I’ve gone live now for 2 months and my results remain consistent.

I think too many people get caught up in searching for the best trading system/method that they forget about their business plan.

Here’s a brief look at what we are expected to achieve consistantly after doing the course:

[B]3 Trades per week
3% Risk per trade
60% Winning percentage
30pip risk
45pip target[/B]

If you do the maths, we’re targeting 60pips per week which equates to 6% return on capital. Compound that over 3months and you’ll get 100% return.

To answer your question gambler…if you’re able to pull in 60pips/week consistently then you’ll be able to turn a $5k account into $100k in a year. Everyone can laugh at my post, it’s fine by me, I’ve got nothing to prove. The stats are there, you can do the maths yourself.

How much time do I spend on the market each day??.. I watch the market for setups from UK open up to US open , which is roughly 7-8hrs / day. Most of this time is spent doing other things around the house anyway.

Cheers

16

I want to take a moment to point something out here. I’m not in a position to either affirm or reject whether these numbers are accurate or not. I’ll assume they are. The more important thing, though, is what they represent.

Traders have a tendency to get wrapped up in a couple of specific measures of system performance. They are the win % and the reward/risk ratio. Notice that this system has a 60% win rate, which most folks probably wouldn’t consider super fantastic. It also has a reward/risk ratio of 1.5:1, which again probably doesn’t excite too many people.

Here’s the deal, though. You have a system with an edge. It combines a better than 50/50 win rate with a better than 1:1 reward/risk ratio. This particular system has a per trade expectancy of 15 pips (60% x 45 - 40% x 30). Most importantly, it generates a relatively good trade frequency.

Long-term success in trading means coming up with something that [I]works for you[/I] and applying it at much as possible. That puts the law of large numbers in your favor and just about guarantees positive results.

17

Hi gambler,

As you’ve probably already determined, the answers to your questions will be very different depending on who you’re talking to. As the school here teaches, everyone has their own expectations, situations, and mindsets. There are lots of conflicting ideas, opinions, and systems, and most of them can probably make you money, if you work the system right. As in gambling, the key is in how you assess your risks and manage your money.

I suspect that many of us who have graduated the school are still getting a feel for what we can expect from the Forex. Personally, I probably need to go back through it a few times to relearn some of what I’ve already forgotten (due to some family affairs, my eductation was interrupted a couple of times). So, while I have certain personal goals and expectations, I haven’t finished flexing my wings and finding my limits yet.

According to some math I did with profit-to-loss ratios (PLR), I should be able to expect something on the order of a 3.3% return on volume traded at a 2.5 to 1 PLR (with arbitrary trading decisions). Does this mean I can’t lose? Of course not. It’s abstract math. While I’ve had very good results with my practice account, I just got chewed up and spit out this week because of a few big news items that hit. The week before that, I did quite a bit better than 3.3%.

It all depends on the individual, his experience level, and what he is comfortable trading with.

18

haha dude thats awesome. My g/f goes crazy when I spend so much time at the computer learning about this stuff. We even had dinner one time at the computer desk.