I am newbie here and just for interest could anybody say what per sent per month is good for professional?
The Lehman Brothers risk management philosphy. Also used by Bear Stearns, Merrill Lynch and some others. Unfortunately, the mathematical probablity of exceeding their respective drawdowns was… exceeded.
Big words for a newbie. You must be part of the 5% club right?
Your far to complex, risk per trade cannot be proven with ‘evidence’, it is a conscious decision made by the trader. I chose my risk per trade because it is what I am willing to sacrifice per trade to see if it goes my way and it can be different depending on the strength of the signal. It’s not a guess, it is a figure that I mentally chose that makes sense for me and my account survival. It’s that simple. I don’t need some fancy attempt at predicting the unpredictable with statistics to tell me how much I am willing to risk.
I did not say that explicitly. I said that the amount risked per trade is in correspondence to potential drawdawn. I provided simple examples of how 5 loosing trades would affect an account. I have my own strategy which is based on pure price action. There is no way of predicting with complete certainty how price is going to move, or which of the many trades I do and do not enter. I haven’t bought an off the shelf ea or strategy that claim such results. My risk per trade is chosen such that a streak of bad trades will be tolerable to me. I aim to let the winners run and cut the losses early, enter at minimum risk and try catch the larger swings. I really don’t know what the drawdown or when it is going to be, I just know that it will come and it will hurt no matter what size the account is. That is why I use between 1-3% per trade.
Well seeing as my pension account from my old job is still active at this multi-million dollar (probably billion) firm (Great West Life) if your curious. I would imagine their average per month is less than 1%. The reason I say that is because I got a report 2 months ago about the previous 7 month’s performance, they focus on stocks mainly, was only 6%, pathetic considering if you look at the S&P performance, well any index for that matter, you just find certain popular stocks and go long.
My guess is they hold ALL of their toxic trades forever and I mean forever maybe expecting their dividends to average out their losing positions? Their performance in that 2008 to 2011 was piss poor. They had lost 30-40% of their portfolio’s and “diversified” investments and not even close to breaking even. These are portfolio’s as little as 100m to I’ve seen 1.2B. Can you imagine seeing 30M - 360M on the low end of your 401K or retirement go down the toilet?
The only reason they didn’t go under is because my union’s dumb enough to keep pumping money to the firm and they have the work force to constantly bring in new money. Pretty sure someone’s getting a kick back
Before you assume no, I actually strenuously requested NOT to let them invest my money and said that I would take full responsibility, but they even wrote it in the joining clause that it is not optional and gave me the one of us or not with us choice.
I think that 10% per month is achievable. Not each and every month, but over the course of a year.
I’m attempting to turn $30k into $300k doing just that actually. Compounding 10% per month.
I’ve got a video diary if anyone cares to follow along and see if it really can be done 
Hold on Nick McDonald… weren’t you doing Nadex binary option seminars?
Two things.
First, pension funds are, by nature, conservative. They tend to concentrate on very low risk investments and they are as risk averse as you can get. It is typical for pension funds to grow at rates much, much less than the S&P 500. It is the nature of the beast. By design, they are intended to be sources of absolute minimal retirement income and are not designed to be a means to one day live the lifestyle of the rich and famous.
Second, though kickbacks are certainly plausible it is usually something much less sinister (but just as distasteful IMO) when it comes to choosing a 3rd party pension administrator or plan. A relative. A friend. An acquaintance. A cousin twice removed by marriage that you don’t really like but don’t want to hear your wife nag you about for not letting cousin Ralph handle it and get the commission…
It’s the way of the world.
Thats the funny thing their conservative portfolio lost 30% and their aggressive portfolios such as a 1-3 year holdings lost 40%
But yeah it was a rude re-awakening for me to how this unfair this world is sometimes especially how they double dip your pockets by charging you a flat fee scaled upon how much you make per quarter and about 3% per pay cheque you get for “membership maintaince” fee’s on top of all the deductions you already get.
Now look at it from the fund manager’s perspective. He has a wife and kids to feed. All of those fees are what he uses to feed his family. The only difference is that they have become accustomed to dining on caviar, lobster tails and the finest wines in 5 star restaraunts (when his personal chef has the night off of course).
Who are you to deny this man food for his family? :30:
iDelta has a point on the statistical evidence for choosing your risk per trade, I myself used the Kelly money management calculation to find what would be best for me but at the same time you have to balance that statistical information with your own personal risk attitude. For example if the evidence suggests I should risk 10% per trade but I am comfortable with only risking 3% then I should risk the 3%, sure I would probably not be maximizing my profits but the piece of mind would be worth it.
As for goals I would like to be able to hit 5% a month but I aim for 7.5%, knowing there will be months you hit the goal, some months you surpass it and others where you miss it even losing. The 20k account does seem a bit low, I would like to build a 100k account and then earning 5% a month on that leaves you with 5k to live on which is pretty good.
I made around 5% last month, it was my first month live too! Didnt realize I am doing so well… 
Lets see if i can keep it this way!
rather good results to my mind. well what results are good for professionals?
nice result
i constantly make 1-2% every month…
it’s not a mega-result but i’m trying to keep it too!
What you decide to risk per trade is down to you - but my point remains that unless you can provide evidence as to why you are risking this X% per trade then it’s simply a guess as best. Saying that you are choosing, for example, 2% per trade because you think a loss of five trades will result in -10% is fine. But it’s surely not the correct approach to be taking. Firstly you need to consider what the typical drawdown actually is in your own trading system (im talking about the no. of trades, not a % loss). If your a high frequency trader then it may be considered normal to place twenty trades per day, and so normal is lose 8 in a row. On the contrary a trader who trades a few times a month may only see up to four losses on the bounce. It would then make statistical sense that the high frequency trader should risk less % per trade.
You’re talking about drawdown - but your talking of it out of context. How can you possibly relate you risk per trade as a % to drawdown when you dont actually know what the expected drawdown will be. You find this out by testing, and doing the required research - such as back-testing etc.
Perhaps you will disagree, and that is fine - but I like to see proof via stats - not guess work.
Yes. I am.
It’s strange that when you change your user name on BP that you get a lack of respect for posting a perfectly correct answer. Had I posted it under my other username which has +1000 post’s im sure the response would have been different, lol.
I made 25% last month on USD/JPY, but most months anything > 0% is good
Ding, ding, that’s the perfect answer and that’s what every trader needs to aim for…anything>0% is good enough for the moment, esp for newbies.
From 5 to 10% monthly could be a good target 