Yes I agree - but now we are going off on a tangent 
Back you your quote of making perhaps 20% a year and why bother, well with a large enough bankroll it all of a sudden becomes rather attractive at low risk, low leverage and buoyant capital.
Most people cant afford 100K and then to only make 20% or $20k per year…
Is that really worth someones time, if they can afford to put 100K in their trading account?
I don’t think so. Their time is more valuable than that because its not a buy and hold where they can focus on other things. Its trading day in day out, week in week out…
Not really, the people who i’ve met who are making money and who do have large accounts are actually doing quite the opposite to trading day in and day out. Yes they value their time, but they also have a diversified & prudent investment plan whilst understand that FX is one of many different ventures to glean a return from.
Sure you could chase the S&P and throw all your eggs in one basket - but that’s not smart and that’s why some traders use FX as one outlet to spread the overall risk. Hope that makes sense.
It makes sense,
My point is that we should be aiming to do better than 20% per year.
A lot better.
This has always been a sticking point on what ‘should’ be made from FX, the more the account holder has the lower the expected returns go hand in hand. If you can make a few percent per month with minimal drawdown then you’re already in a good position. It’s rare you will see a verified FX account where this has been achieved for 12 months with stable and sound risk being used.
If you can make consistent and stable returns with minimum draw down then you might want to consider managing other peoples money. For a % of the profit.
The money will find you if you make your record public and in the the right places.
10-20% per month, yeah!
20% per year is better than most but why not aim for that monthly? at least…
And now we have made a full circle back to your first post - 80% of traders (probably more) blow their accounts because they have this same assumption. It’s just not possible, it’s not been proven and we would all love to see it on a verified account over at least a 12 month period.
Anyway, this has been discussed in great detail in many many other threads here and they all boil down to the same point which is… no one has done it.
Its difficult, very challenging, yes.
I would not go as far as to say it is impossible (Im possible)
Risking 2% per trade with a risk to reward ratio of 1:3 will net 6% per trade.
There is one trade a week where this is possible.
If you can do that for 4 weeks, that’s 24% for the month.
Totally agree with this, hindsight is a wonderful thing, right
The important thing to remember is that you’re assuming a 100% win rate - again it just doesn’t happen.
Anyway, I get what you’re saying, I think we’ve all gone through this thought process many times when the good times are rolling.
No quite,
You can have a 50% win rate and come out at circ 12% for the month,
You can make more money selling tangible goods on ebay…
Well whichever option you go for, be it FX or Ebay I wish you luck.
Hit me up when you’ve hit 20% a month consistently, or find someone who has.
Edit: I’ve had 20%, even 30% months myself, but I know for a fact that its about being in the right place at the right time, luck on your side per se - it’s certainly not maintainable.
To achieve a successful trading voyage here, a forex trader will necessitate efficient use of funds. Proper money management can actually help any trader to attain trading objectives so that a trader can make best use of his trading skills and expertise. A trader thereby should give due emphasize on the administration of funds.
never trade with money you cannot risk. a bigger account may give you the flexibility of trades … you can definitely still start small … just that you need to manage your expectations.
a profit of $2 for a single trade by a $100 account is actually a good trade!
how is everyone and their trading? doing good?
Certainly it is all relative to traders strategy and approach to capital management. I personally prefer to risk lower share of my invested capital. So, I fully agree with Trading801, that by risking 3% of your position would require relatively lower performance to get your full initial capital back
Wise words :). Yay to proper money management
Hey i wanted to drop by and do a pulse check on you babypippers . . how is your trading . .are you practicing your proper money management?
Just remember this:
Lose 50% of your capital and you need to gain 100% to break even. Lose 5% of your capital and you only need to gain 5.3%. Tell me which is more sustainable?
The US NFP was worse than expected. This brought a flight away from the US dollar. I am aware of a few traders who had a big lost due to excessive risk.
Proper money management is crucial for forex success. I previously had 3 margin calls so trust me when I say I am quite familiar with losing.
All the best for the new week ahead!