But this 15% draw down is chewing away at your profits right? Or is it your initial equity?
15% down since beginning of the month (because I compund and all, it’s hard to give an exact measurement). meaning, I’m still 28% up from inital equity.
100% X 1.5 = 150%
150 X (100%-15%)= 127.5%
yes, it is chewing my profits, where else lol?
That would be a 12.7% return, better than any bank or most income funds at the moment…
Risk… reward… big return… small return… Its funny, that every batch of new traders likes to bring this up because they still don’t have an idea of what it takes to be consitenty profitable over the long term… of course they haven’t traded long term yet to know how difficult or easy it can be.
I can honestly say it took me 2.5 years to become a consitently profitable trader… no magic, just alot of work. From what I have seen I would comment this… If your new to trading and you manage to break even in your first year, that is pretty good… forget the 20% per month or what ever, you might do that a couple of times only to give it all back and then some.
New traders seem to think of only what they are going to “earn” off a trade, where as long term traders think what am i going to “lose”… Its a different mindset and with that, you become far more effective at making trades in my opinion, waiting for the right entry point… still have losses of course, just the winners typically out run them.
Anyone who has traded long enough will tell you that…
So don’t believe the smoke and mirrors… yes great returns are possible, the trouble is most retail trader dont have the discipline to make those month-in month-out…
You can’t compare forex trading with bank or income funds, when you invest in them your risk is negligable and someone else does the work for you all you do is give them your money and wait for the returns.
Trading forex is a totaly different thing it takes a lot of time and effort to learn to trade forex profitably and then a lot more time each day studying the market and or technical analysis when making trades, and as is well known and well discussed, 95% of forex traders lose their money so the risk is extremely high.
To take that much risk and spend that much time with the expectation of making just a few percent more than a regular investment seems ludicous to me.
Because you’re under the impression that it takes a lot of time. You my friend, has what is called a job mentality. You’re still thinking you’re trading time with money. That is not the case with any investment.
The ludicrous idea here is that you think you can turn 100 bucks into millions in a few short years.
But here’s the funny thing about that. All the people that think the same thing as you are micro account traders who are seeking the Holy Grail. Anyone who has obtained true success in the financial world for years on end will tell you quite a different story.
And in the end, I’m taking the advice from those that have millions, not those that aspire to have millions.
Negligable?? you tell that to the passive investors who are down millions and millions of dollars right now. I know some of my investments are down over 50% still… Sure they may come back up, but that might also take the next 10 years… there is risk with any kind of investment.
12.7% on 50k, would not be all that risky in my opinion, but I wouldnt recommend a new trader to try that. Once you have learned how to trade and have a solid trading plan that is consitently profitable, I would suggest that.
Trouble with forex is mostly human greed combined with a lack of discipline, and thats why we have the 95% failure rate. If you can be patient enough and disiplined enough, trading FX can be relatively easy.
Cheers
Which bank accounts or income funds are you talking about that have lost the investors initial deposit of millions and millions ?
Some of these funds may be down this year but that doesnt mean investors have lost all their money. Income funds are a long term investment they go up and they go down the point is, forex trading is not the same as putting your money in an investment fund or bank account, you have to do it yourself you have to invest a lot of time and effort into learning forex trading and economics and even then there is no guarentee you will actually make any profit at all and there is an extremely high probability you will lose all your money period as happens to 95% of forex traders. I say again as i said before no one in their right mind would do this to make only $500 a month from a $50,000 extreme risk gamble.
If 1% per month is all you expect you could put the $50,000 into an apartment and rent it out, probably for substantially more than the 1%, $500 a month with almost zero risk to your initial investment, almost zero time spent learning how to rent out an apartment and a very good chance that on top of the rent income, the property will itself increase in value several percent per year.
Isn’t it time we put this thread out of it’s misery? 
That time has been and gone several days ago lol
This must be the resurrection then? - FREEAAAAKKKYYYYY
Seiously though I can’t believe so many people compare forex trading to an IRA account or a bank savings account, there are so many members of this forum who have stated it took them several years to learn how to trade forex succesfully, you dont put several years into learning something just to make a few percent more than an income fund. You put that kind of time into learning something that is going to make you as much as a someone does at their own business.
Isn’t FX trading or any kind of trading not an investment? Unless you do it as your full time job, I would say its used as an investment vehicle to grow your deposit. Higher risk than some, yes for sure…
I just pointed out that alot of investment funds are down, and yes they go up and down over the long term, just right now most are down at the moment and investors are down alot of money (wouldn’t you call that a drawdown???).
If i had the option of 50k in an IRA or in my FX account, I would surely put it in my FX account and your right I would expect more than 1% per month, but even if that is all, it would still be better than sitting in the bank.
Statistically speaking, the S&P 500 & other such exchange funds have averaged 5.5% (counting the recent downturn) over the long-run. So as long as you don’t sell at the bottom & have 15 years, you’re fine.
As far as putting 50k in a FX account for retirement is ludacris. You’re missing the whole “high risk speculation” part. You could perhaps risk a small portion of your retirement in the FX market.
FX makes me quiet a bit of ROI based on the high leverage I’m able to take. I won’t go into % details as this has caused alot of debate & doubt & arguments in the past. But losses are magnified as well because of the leverage (thankfully I limit my losses, which aren’t many & come out ahead)
My feeling is exactly what someone else said here, FX is a business and your trading capital is the investment into a business operation. Its not any different in my view than investing in a pizza shop. You’re not “investing” in the Euro or the Yen, you are investing in a currency speculation business. The only thing that comes close to “investing in currencies” is doing something like buying into a carry trade mutual fund such as ICI or CEW.
Obviously whatever business it is, it has to be worth your time. I think a 20% nominal annual return is just not worth my time. I can spend that same time doing something else and make more money, in other words. Even if you had $100,000 of speculative capital (which is a lot for most middle class people), is it worth sweating over it so hard and taking such risks when you stand a chance of making just $20,000 off of it? The only way I could justify that is if I enjoyed it as a hobby, in the way that some people sell their arts and crafts online.
If you could make 5% a month CONSISTENTLY, and in all market conditions, compound annually in a tax free account (in other words, increase position size just once a year), you could take $5,000 (something most of us can save up), and in 15 years have $3.9 million, and that’s after accounting for inflation. Then you could just stick that into a 20 year TIPS bond and do other things with your life until you’re 59 1/2 yrs old, knowing you’ll have enough passive income at that age to never have to work again. Not a bad deal, isn’t it?
Your right I have a job mentality I treat my forex trading as a business venture I don’t consider it an investment, I just don’t see how you can say its an investment, forex trading would be just another investment like all the others mentioned if you deposit your money into a managed account and the sum of your involvement in the money making process was depositing your check.
Why not just set the goal to 100 million dollars?
That would take longer. It’s a balance between pay out and the time invested to achieve it.
It would take too long? You are attempting to turn 5k into a million dollars in less than 2 years. Surely 100 million is just as feasible in a short amount of time.
Ideally. It would be nice to know/hear of people that achieved this. Math can do a lot of things that people can’t in reality.
For a second I thought that was a real account statement, so I deleted my earlier posting.
Anyway, as Boris Schlossberg said, “What is mathematically optimal is psychologically impossible”. I’m the first guy who wants to compound my way to financial freedom, but I’m giving myself at least 15 years to get that done (at first I have to become consistently profitable, hehehe).
5% a month average return is a 56% annual real rate of return on equity. If I increase contract size only once a year, in 15 years that works to a bit over $7 mill in 2010 dollars if I work from an IRA account and avoid the tax bite. I can stick that money into TIPS bonds so the principle is protected from inflation, and my retirement is well taken care of.