Great thread! I read every post! Thank you to all the posters for sharing your insights with newbies like myself.
15 - 20% per month is impressive feat! I’ve yet to know anyone who can achieve that consistently. All i can say is wow.
Fartist… as one person who has been written about and interviewed to some extent in the media, i’d recommend reading the book “pit bull” by marty schwartz…or reading the original “market wizards” book, focusing on the chapter specifically on marty schwartz.
This is a guy who enters trading competitions with his own money…a 7 figure sum, takes reasonable risk on every trade, and makes over 25% per month…and has been doing so for many years now.
It’s totally doable…though it takes a dedication above what most are able to muster.
I make double digit monthly returns all the time… though admittedly with much less than a 7 figure sum…and have not had yet even 24 months of full time trading to prove how long i can keep it up. For a few clues as to how i do it…watch my free video series i posted up on babypips.
it’s free. i don’t sell anything. i do it cuz i get a kick out of seeing others do what i do.
but…forget me. Marty schwartz…guys one of the greats…but proves that it is completely possible.
Jay
Thanks jay! I’ll defintely look up to it. But one qns may i ask, if someone were to swing trade the 4hr charts and above. Chances of him getting potential trades would be lesser than someone say trading a 15mins timeframe?
Would trading a higher timeframe thus reduce his chances of earning a higher return? Since technically he has lesser trades to make compared to someone trading the lower timeframe.
E.g. 4hr trade gets 5 trades a month and out of 5, 3 wins and 2 losses. 3 wins are 1:2 risk reward. Risking 2% a trade he nets 8% that month.
The 15mins trader gets 20 trades a month. Out of 20, 12 are winners and 8 losers.
1:2 risk reward for winners again and risking 2% a trade.
Netting 32% for the month.
That’s my qns, does lower timeframe increase profitability? (don’t think profitability is the right word, but can’t think of anything else)
Thanks!
Just a heads up that I am new to forex as well, but I think I know the answer here…
Lets say the AUD/USD is at parity.
In this case;
1 Lot = $100,000
1 Pip = $10
Avg. Pip Ranges
1 Week = 630
1 Day = 90
4 Hour = 15
1 Hour = 4
Let’s say trading 1 lot represents a 2% risk. Over longer time frames, a single trade of 1 lot can pull in more pips and hence more money. Over shorter time frames you must trade more often as each trade of 1 lot yields less pips and hence less money.
In either case, assuming you are equally as successful at scalping/day trading as you are at swing trading, you should be seeing approximately the same percentage of returns over a month.
That said, there’s much more to it than that. Trading more often may mean you are more engaged with whats going on and hence will be more successful. It may on the other hand stress you out and make you “overtrade” and hence be less successful. Also I think most good traders are using multiple time frames to understand what is going on.
Also, experts, feel free to correct anything I have gotten wrong in my post…
Sorry but my intention was risk 2% on each trade, irregardles of the pips size. Meaning i could risk 1k with a 200 pip sto ploss, or 1000 with a 50 pip stop loss. Whatever the trade, im risking only 2% of my account size.
That was what im trying to illustrate.
Thanks though 
Keeping risk at 2% whilst relaxing stop loss means you must decrease your overall position in the currency.
I mean, something has to give;
- Low risk, Large position, [B]Stop loss tighter[/B]
- Low risk, [B]Small position[/B], Stop loss relaxed
- [B]High risk[/B], Large Position, Stop loss relaxed
Now if you are trading short time frames with option 1 (2%, $200,000 position, 50pip SL), and long time frames with option 2 (2%, $50,000 position, 200pip SL), then you are going to have different monthly returns if your success rate is the same in both cases. But that is a function of the position size, not the time frame. To get the same monthly returns just use the same option.
So the answer remains the same - timeframe is not the deciding factor when it comes to returns.
Sorry i do not understand your illustration.
What i meant was a lower time frame could give more setups compared to a higher timeframe.
Assuming both win rate of 60% and 1:2 risk reward, i have showed that trading the lower timeframe yield more opportunities compared to the higher timeframe.
And with that it eventually increase the account size by a larger margin over the same period.
Maybe Jay could comment on this.
Fartist…its not an easy answer.
honestly, depening on the trade management strategy…it could vary widely.
if trades on a 4hr…but can time the turning points of 4 figure pip trend reversals…
one could scale in, and make a fortune.
but, a simple answer…yes. i haev about a 60% edge trading 1 min and 5 min charts…with my losers averaging about 1.05 risk to my winners
this is a fairly tight margin…
however, executed 10 - 20 times a day a 1% risk per trade…it works out very well.
i would never get 10 - 20 entries a day off of a 4 hour chart for my signals of course.
Honestly, i look at every time frame whiloe trading… it really is helpful to see how the market is developing over all
Jay
Ok thanks for sharing!
I personally trade the 4hr time frame and above due to committments, but its interesting to see how day traders like you trade markets.
It will depend on your ability and desire to learn. Imagine simply opening your trading platform, placing your trade, knowing your going to make x amount of profit and being able to do it whenever you want to. Imagine if you were the best in the world, and could double your account balances every month, or even every year, you would outperform the pros with Harvard degrees. If you think you can, you will find ways. Do not put yourself in a box with averages, you can be much better than average.
I think the figure is average 2-3 years. I personally wouldn’t call that long time neither. As with everything learning how to play piano, sports, a career. Your skills will improve as with time and practice. I don’t think there’ll be any shortcuts unless you put in all , I mean practice practice practice. Lots of screen time.