How much does a successful trader aim to make % wise every year?
Also how much % do most traders acctually make?
Ive been trading the stock market since I was 16, im now 19 and have started getting into forex. At the start of the year I opened an account with £1000 now it stands at £1441 a 44.1% increase on the year so far. Considering i manage to keep this gain for the rest of the year would a 44% increase seem like a good years trading or is it highly above average?
Any input or advice (Esp if anyone has any figures of what % bank traders make?) would be great!
Edit: A bit more info, so far this year ive had 40 trades, 7 of those were losing trades
Your first question is a complicated one. There are so many different methods to create profit in the forex market and each one has a different potential. I think the best answer is most traders try to reach the peak performance of whatever system they are using. Given the required risk/reward ratio and success rate there is a limit to how much of an account can be reasonably risked.
That being said, I believe 44% is a very conservative return. When I am analyzing the potential of a system I backtest and forward test it extensively. I then take the average gain per trade and, depending on the average number of trades per day, calculate an expected annual return.
Don’t limit yourself or set unreasonable expectations by looking at other traders. Study, research, and determine your own goals.
25% roi you can make with any investment if you are not completely off track.
So, if you invest time and energy, you might want a little more what compensates it.
The roi rate then depends on your risk. Smaller risk, smaller roi. Anyways, there is an optimal roi. That’s exactly there, where your risk is as high as possible without running into a margin call.
Actually, I doubt that many traders use this optimal rrr. I wouldn’t do it that way, too. Because that means your account would shrink sometimes to a level a few bucks about a margin call.
I for myself use a risk rate of max. 30% of the account and not more. Not to say the system makes 30% drawdown.
With such a risk level you can make 1000% and more roi. It’s not easy, but it’s achievable.
As an earlier poster has said this sort of question varies enormously depending on the system used and the trading style of the trader. I am pretty conservative, but for what it is worth: I risk 1% per trade, I target a 10% net monthly return per month. I generally come in above that, if I am around enough to put the hours in, but 10% is the return I wanted on my investment of both time and the cash I have tied up in my trading account. Each month I leave in most of what I make, so the figure the 10% (or more) represents is larger each month. In good months I make a lot more than 10%, but I thought it more worthwhile giving you the % I need to make this work for me. Even with a 10,000 account, just sticking to 10% makes a very good return pretty quickly. I strongly believe that consistency is much more important than a big headline target that one can’t sustain.
Thank you. There are many on here who have been at this longer than I have, but I am a firm believer in realistic goals and contained risk, as in the long term that will still get you where you want to be in this game. If someone makes 40% in a week, then loses 41% the following week, they are still a very boring 1% down on the fortnight. Unfortunately, the 40% gain week can convince someone that they are a master trader, even if it is not respresentative of a full trading quarter or more. If you can hit 10% or more month in, month out, you will still have freedom, fast cars, houses, whatever floats your boat. The steady route to getting there just doesn’t sound as sexy as some of the big numbers that get chucked around. And even playing it steady, if you trail your Stops, once you have locked in your profit level you can still let trades run and have some exciting ones along the way! Point is, if you hit 1% when you win, and don’t risk more than 1% per trade, you only need a net 10 winners each month to be away, financially, at some point (even if you need to wait on the fruits of compounded gains to kick in before you can draw a proper income from it).
Happy to answer that as I put the original numbers out there although, as ever, the time you spend trading obviously depends on the strategies you use. I am on GMT, being based in England, I trade 0600-1000 Monday-Friday morning, plus 30-60 minutes late each evening Sunday-Wednesday looking for end of day setups. I will look in on the NY open Monday-Thursday if I am at home (that is just after lunch for us), but I don’t bother if I have had a good morning session or if I am not around. I spend an hour or so at the weekend reviewing trends for the past week and preparing a list of pairs from within my preferred pairs that look as though they might offer setups for my strategy for the following week. I don’t trade heavy news days, bank holidays etc. Hope that helps, but sorry I now feel as though I am hijacking the thread, apologies NGC773!
Interesting, 10% net a month is exactly what I also aim for . I believe realistically some months may be more and some less, but if you can average this per month, nobody can say it’s a bad use of capital.
I target 20%/month, risking 2% per trading day, and 0.25% per actual trade.
and that target is not something I’m “hoping” to achieve some months, it’s a number I fully expect to achieve and surpass every month of the year, barring some major catastrophe in my health or discipline.
looking into the future I plan to cut those values in half when my account reaches 100k. earning $10,000+ per month, risking 0.125% per trade…well that’s just my cup of tea!
