of course it does, I could have opened just one position at 1 lot or I could open the first positition at 0.5 lots then when the PA is movig hard in my favor 40 or 50 pips further on open a second position at 0.5 lots now the first position is already in profit by 50 pips, its not going anywhere, the 2nd position is now the one to watch if the PA starts to reverse I can close it out and take whatever profit there is on the first one, if it continues in my favor I can open a third position at 0.5 lots now if the price moves in my favor the three open position together are making me the same as a 1.5 lot trade, plus whatever they made before that, but at no time did I expose myself to more than 0.5 lots risk.
That wasn’t a folly you don’t need to split hairs over my choice of words I was saying how unrealistic it is to imagine becoming a millionaire by making a 1% return, ask all the newbies on here. Who has $50,000 to open a forex account with ? and how many is working on a 30 year plan to make a million, and even if there are any, like I mentioned already, with 30 years inflation a million dollars won’t be worth anything like what we mean by being a millionaire in todays language.
30 years ago my parents bought a 5 bedroom house on the edge of the city for 53,000 they sold it 15 years ago for just under 200,000 that same house was sold in 2006 for 419,000 the house 2 doors up from it was sold last year for 487,000 thats what 30 years does .
You must not have read some of the posts I’ve read on this forum, there are people that have lost huge amounts of money one guy lost almost all of his $80,000 others have reported 20 straight losses in a row, trading at 1% risk 20 straight losses knocks your $50,000 down to about 41,000 now at 1% it would take another two years of zero losses just to break even, he already had 20 losses what if he has another 10 ? If you open an account with 50,000 it is at risk no matter how low your risk level is.
It is what you are happy with, the question is not what you can get from the market it is what is a great return ? It is only great if you think it is great. Most people wouldnt think it very great if they spent 8 or ten hours a day 5 days a week forex trading and made less than they could at a minimum wage job.
You do recognize that even at a 1% return a month, that’s beating out inflation.
Furthermore, it is the farthest thing from unrealistic. $50,000 into one million dollars in 30 years is incredible. It gives an opportunity for anyone to understand that if they even can do better than 1% a month, they too can make a fortune with any financial instrument.
Incorrect. Your entire $50,000 is not at risk. Only one percent of it is, or whatever amount you decide to risk per trade. And if one is facing 20 straight losses, they need to re-evaluate their methodology. Money management isn’t their problem at that point, their entries and exits are at fault.
Furthermore, you’re making the assumption that there is only one trade to make per month. That’s pretty silly, don’t you think? How do you know it would take two years? It could be a matter of weeks depending on how many trades they take. And if their methodology in the long run is profitable and they had a winning edge, the 20 losses should be of comfort. They are sitting on the verge of catching a crazy winning side to make up for that.
No. Again it is not what you are happy with. Your happiness does not dictate how much return you will get per month. If you understand anything with investments is that you cannot guarantee results. You can perhaps attempt to predict results, but that’s it. At the very most, all you can do is create a winning edge.
Simply because you want 20%, doesn’t mean you’ll obtain it. Heck, I would love to have 100% growth every day, but I’m not going to even make the attempt to strive for that.
When you strive for lofty results, they only variable you have at your control is your risk. And you are risking quite a lot by making such incredible feats of 20% returns or more on a consistent basis every month.
And spending time in front of a computer chart is irrelevant. Forex doesn’t trade hours for dollars. I maybe spend at most 15 minutes a day overlooking 19 pairs to take trades. If you’re concerned with spending too much time in front of the computer, then scale back your timeframe.
So you’re correct, it’s a waste of time trading forex for hours on end if you’re not profitable enough to justify the time, then you shouldn’t be considering trading at a full time level.
Quite frankly, I don’t think anyone should be trading full time, until their bankroll is at a point where they can live off conservative interests level on a passive basis.
Alright lets just agree to differ this really isnt worth the typing time to argue about it
I’m so disappointed, I was enjoying that, carry on everyone… 
Well I will say, I dont consider a 1% return per month to be great I would quit if that was all I made.
Consider this, even if you made 1% a month in Forex, you would be beating out 80% if not more of all traders in the field.
Also consider this, most new traders are starting with a lot less than $50,000 many start with $1000 and im sure none of them would bother if they thought their best hopes of a return after all their efforts to learn would be $10 a month
$10 !!! as much as that, I never new such riches were possible 
And due to these completely unrealistic expectations they get exactly what they deserve I’m certainly not complaining, but it would be immoral not to point out the reality.
The market doesnt really care if participants are inadequately funded.
Are you under the impression that you can only trade what you start out with? Most traders I’m sure got their initial bankroll from somewhere. Generally, that source of funding is employment. If they were able to deposit a source of income that was disposable once, they should most likely be able to do it again and again and again. If the money wasn’t disposable to begin with, then it should have never been traded in the first place.
That being said, they have the opportunity to build up their bankroll, while trading their account to something that will eventually be more sizable.
And even if they were only to start with 1000 bucks and make 10 bucks each month, they are beating out nearly any other financial vehicle out there.
Traders need to hear the truth. If they attempt to turn their 1000 bucks into a million in a few short years, they will soon join the masses that have busted their accounts. You’ll eventually come to that realization soon enough if you continue your attempts to flip your bankroll 10x+ over in a short period of time. High rewards are only backed by high risk.
And who said anything about “best hopes”. I’ve said quite the opposite in fact, by referring to the 1% a month as the very least expectation from a trader with a winning edge.
how would someone get in a business to make 1% of the investment for month.
open a coffe shop or a tea house with 50000$ and you´ll get more than 1% of the investment per month.
1% return per month is ridiculous because any investment can do more than that.
if you put your money in the bank it will give you 2-3% a year… so the diference between putting it on a bank account an into forex (thinking that we´ll trade only 10 months per year) is 7-8% return per year.
if that´s all forex can give to someone i think no one would spent time learning it.
Get this, I just went to checkers there was an old lady in the drive through I dont know what she was doing but she suddenly reversed at high speed like she slammed her foot on the gas and reversed backwards down the drive through, up the kerb and down the grassy hill then into a big light pole knocked it over then into the anchor wires for a power pole so hard that it pulled the power pole and there was a big flash from the power lines and the power all went out !! Scared me half to death She was ok but her car wasnt
No. That’s incorrect. Not any investment can return 1% a month. Not even something as simple as a savings account can do that. Some mutual funds can’t even manage that.
Furthermore, with the compounding nature of finances, the difference you speak so lightly of is the difference of millions of dollars.
And no one is claiming that is all that forex can give to someone. Please read the arguments carefully before entering into this debate.
If it was a Toyota, I wonder if they overcompensated for the sudden forward acceleration…
I’m still running approximately a -10% return each month, so even a +1% return would be great, lol.
Personally, I’ve set my first goal (after consistent breakeven) to 5% a month. At 5% a month average return, that’s 60% a year. Beats the hell out of the S&P 500 even on a good year.
My next goal is 10% a month consistent average, and my ultimate goal (which I don’t expect to reach for 10 years probably), is 25% a month. If Martin Schwartz could do it, so can I. I know there are traders out there who have managed to build tremendous wealth from small stakes. Sure, its hard to say who got lucky and simply gambled, but there are enough of them who are good at what they do and that’s how they got there.
Personally, if all I can get with trading is double the S&P 500, its really a pointless exercise unless I had heaps of capital. If I was capped at a 20% annual return, I’d increase my money six-fold in ten years in a tax free account (or by 4.4 if we assume a 4% annualized rate of inflation). That’s 10 years of studying charts, fundamentals, you name it. Is it worth the time? I really don’t think so, at least not for me. As someone else pointed out, private businesses offer more ROI. The target ROI for most businesses is 30%. The probability of failure is the same as with trading, overall. Invest passively and get 30%/yr, or actively and get 20% a year, with the same probability of success? I’d go with the former.
Whatsmore, it would take a huge stake to live off of such a 20% annual return. You’d need anywhere from 250 K to 500 K if you wanted to live with any comfort. As trading is a speculative activity, you don’t want to put your entire net worth on the line either, so you should have more than that in your coiffers.
Also, my general feeling is that its not fair to compare Wall St. money managers with retail odd-lot traders. When the big fish put on seven and eight figure positions, they are like elephants walking into a pool. Its much harder for them to get a good fill than for the mini-lot crowd, they often have to break up their orders into chunks that they work in throughout the day. Imagine if in order to put on a position, you had to buy/sell lots throughout the entire day, every 20 seconds or so?
Anyway, these are just my silly thoughts. I’m not a profitable trader yet, so perhaps one day I can tell you what my personal experience has bought forth rather than blind theorizing.
I trade on the 4hr and 1D charts, and I trade the majors. This is probably my own naivety, lack of knowledge and lack of experience, but I just don’t see enough trades to make 5-10% a month, on 1% risk per trade. I just don’t find enough trade setups to achieve that, unless I pay attention to several currency pairs at a time. I’ve made one trade a week for the past 4 weeks, two of which were profitable, and the other two losses. The overall change in account was positive though.
I guess my trading style isn’t as aggressive, involved or active enough to make as much of a return as others.
If you’re ahead, you’re doing just fine.
Mathematically speaking, its really simple…
Rate of return = (Avg % gain per trade X successful trades) - (Avg % loss X losing trades).
To increase rate of return, possible only if rate of return is positive,
Either:
- increase successful trades in relation to losing trades (edge),
- increase sum of trades overall, keeping the same rate ratio of success,
- increase % gain (which automatically increases % loss) by increasing position size relative to account size.
If your successful trades outnumber your unsuccessful trades by a significant amount, your risk of drawdown is less. If they are close to even, your risk of drawdown increases.
As drawdown increases, a new variable enters the equation - altered behavior due to the psychological effect resulting from drawdown. Richard Dennis continued to trade when he suffered > 50% drawdown, and he ended the year ahead. Not everyone is Richard Dennis.
So basically in my thinking, that’s what it comes down to in the end.
In THEORY, a day trader who is going for many trades a day is going to do better than a swing trader who shoots off the daily charts. That’s assuming all other variables are the same (risk per trade, success to failure ratio, average win to loss). Its simple numbers.
Those who are against daytrading argue that the amount of successful trades possible in daytrading is lower due to a) more difficulty predicting intraday price movement, and 2) commissions and order slippage cutting more into gains.
In reality, there are no independent statistics to rely on in order to determine who is right. I just hear opinions, and that’s it. The biggest and most difficult to predict variables are psychology and market behavior over X stretch of time. These are real big deals.
To me, the “perfect trader” is one who
a) Spends the least time in front of the screen.
b) Makes the fewest trades.
c) Has the highest ratio of success.
d) Has the lowest drawdown and the highest gains.
Right now I’m still working on getting successful trades > losing trades
Well last month, spending 2 hours a day or so (though 90% i’m not actually doing anything), I grew my account by 50% with 3% risk and R:R of 1:1.
Mostly riding down the EURUSD.
This month, I’m suffering a drawdown of…15% !
See what happens when you risk too much? xD
I’m considering reducing my risk to 2%