Monthly % Return

Hi Traders,

Anybody willing to share what their average return is PM and how long you been trading for?

Just curious as to what could possible be realistic.

Also could you add what strategy you use: TA,FA or indicators?


I only aim to trade good quality trade setups, sometime I trade 4 times a month, sometime 8. My average monthly return is around 12-15% and I trade 98.5% on TA.

What is TA, FA?

TA = technical analysis (it includes indicators, but there are also large parts of technical analysis that have nothing to do with indicators at all; generally, many people wrongly use the words “indicators” and “technical analysis” as meaning exactly the same thing, which they don’t: specifically, many people say “technical analysis” when whatever they [I]intend[/I] to refer to is [I]actually[/I] limited to “indicators”).

FA = fundamental analysis (political/economic/news/announcements).

(I also trade about 98.5% from TA, but I don’t use indicators.)

My target is 5% monthly return. I do not big dream because forex is not a money making machine we use our own investment here not for loss . If go slowly we can make reasonable profits.

The consensus opinion is 5% a month as very good if you trade intraday regularly.

I would personally stay well away from intraday trading unless:

  • You are trading statistical arbitrage
  • You are trading around the release of high impact Political or Economic news

There is a very high noise to signal ratio on the lower timeframes. I don’t know if you program; record the price change in any one period and compare it to the price change in the next period, there is no statistically significant correlation, so the price movement is Markovian (Random) at those levels and there is no predictive relationship between what happened before and what will happen next based on PA.

The indicators simply re-represent price action and therefore have no predictive value either as they rely on the same data (many false flag signals).

You might be able to create Edge in those circumstances if you have access to reliable Market Depth and can see the limit order book for a sizeable percentage of the market to compute the likely Buy Sell pressures at any given price point (e.g. of Statistical Arbitrage - HFT).

Otherwise trading intraday on the lower time frames in the period just before or just after High Impact Political or Economic news will give you some edge; in that case you do not have to predict how the market will move post the announcement, but as there is a fundamental reason for the resulting trend the indicators have some value in showing you the onset of that trend (fewer false flags), and you can hitchhike the imbalance in the supply and demand dynamics of the market movers in either direction.

If I have read this correctly, then I have to really disagree.

There certainly is a relationship between PA and intraday trading, for example on a 1H chart.

Not to sure where this assumption has come from, or is it just yours?

Very clearly … otherwise a few thousand institutional traders would be out of a job, for a start. :wink:

So that we are speaking the same language; by PA I guess you mean price action (price movements) and finding a predictive relationship between previous price movements and future price movements?

In that case there is non. You don’t have to take my word for it do a test yourself.

Again, institutional traders (Specifically banks) do not prop trade, I know this for a fact from experience on the spot FX Desk at Barcap.

HFT Prop firms, the FIX & Quant Desks at banks use algorithms to predict price movement and calculate risk & spreads for auto execution of client orders respectively (Prop versus MM) based on Stochastic Calculus; which itself implies the Markovian nature of prices at those time frames.

Haha, yet another one!

Good one. I think you’re very confused about what you [I]think you know [/I]and what[I] you actually know.[/I] Take a step back and look at the logic of your comment…you’re suggesting that PA has no correlation to future price movements which totally under-minds TA in it’s core concept.


And there is no need to be caustic with your comments, but I have come to learn that is how you do things.

There is no statistically significant relationship at the granular level as price movement is Markovian. Indicators are useless.

It is not for debate; test it yourself.

I agree indicators are useless, however indicators are not PA, are they?

This is why I think you are confused.

How would you define PA.

This movement is quite often analyzed with respect to price changes in the recent past. In simple terms, price action is a trading technique that allows a trader to read the market and make subjective trading decisions based on the recent and actual price movements, rather than relying solely on technical indicators.

This is from google for you :wink:

In general forum parlance, perhaps slightly loosely, it means “trading without indicators” (and that’s how almost all the authors of the standard price-action textbooks briefly explain it, too.)

In that case, my characterisation was correct and there is no stats relationship: this is gambling.

Surprising, then, that so many financial institutions, worldwide, employ such large numbers of people - and spend so much on recruiting and training them - to do intraday trading in the markets, largely on the basis of price action.

I guess you must know better than all of them.

Name them (these institutions u speak of). Name the price action system they trade, is that with or without Market Depth.

I can normally see the funny side of these conversations, but not so much, this time. Right after this thread (another series of “wanting-to-be-rightitis”) a couple of other members were in touch by p.m. telling me they’d now added Ropunzel to their “ignore lists” and suggesting that I might want to do the same. It hadn’t occurred to me, and I didn’t (don’t actually remember ever resorting to that, here) but with hindsight they were probably right; I will now.

And have a good weekend, all.