So if someone has a strategy, that’s been tested for 1 year on live accounts, it has a approximate 50-60%win rate, but the reward risk ratio is 3.3:1 so every winner can afford 3 losers. Now if you take 8 trades a month, you risk 1% account each trade, so when you win you gain 3.33%. You traded 8 trades each month, 50% win ratio, so 4 win 4 loss. 4% losses and 13.32% wins, 13.32%-4% = 9.32% account gain per a month. Of course you will have great months of 15-20% gains and bad months of 4% gains, but in this example, 9.32% is the gain. Does that sound realistic, am i missing anything? This strategy has been tested for 1 year, on live accounts, by me personally, all the numbers are legit, the ONLY thing is i was paper trading but on my live account. I only trade with money i can afford to lose, and my discipline and 2nd to none, I don’t take “false alert trades” i plan the trade and trade the plan, pretty much like a emotionless robot.
I pretty much answered my own question here, but I see many threads of people saying 10-20% a month is only for skilled traders with 15+ years of trading. So why would my above example be unachievable? Or wouldn’t it be with proper discipline?
Just looking for friendly discussion, please don’t throw hate at my thread and think im trying to insult anyone, because im not haha, just trying to see if ant one can see something I’m missing.
Why would likes reflect anything on my image, I’ve commented on plenty of posts sharing any knowledge I have… Many posts… I don’t even know how to like a post …
I am not sure what your thread is actually about here. There are two things here to think about:
You ask is the monthly return realistic for a forex trader? Well, sure it is…if it is based purely on the reality of your trading description! Because it is just simple statistical arithmetic that arrives at that figure. However, a much more relevant and important issue here is whether your trading description is realistic:
Is a consistent and regular 50% or more success rate on eight trades per month with a 1:3.3 R:R realistic? This is the real heart of this question.
Paper trading on a “live” account is not live trading. In fact it is not necessarily even the same as demo trading. Paper trading does not even need to be “real time”. It is very easy to look at a week’s charts and identify what would have been the position entries and exits but that takes only a few minutes to scan through whereas live trading would have required constant watching all week or an EA or something. Nor does paper trading have to deal with the human pressures that accompany live trades - as you know!
If you really have a method that genuinely sets up that number of trades every month, with that success rate and with that R:R, and that you could realistically be able to enter and exit as and when they occur, then the rest is just the number crunching of the results.
But we also all appreciate that market characteristics change over time and so it is another issue whether the same approach that apparently worked for the last 12 months is going to work for the coming 12 months.
Forex trading has a peculiarity in that returns are more dependent on what opportunities the market offers regardless of how well we perform in them. Therefore any talk about what is “realistic” in terms of daily, weekly, monthly, annual returns is somewhat meaningless. A trader’s performance is only as good as his historical record - future perfomance is always an unknown until it is actually realised……….
The only realistic answer is trade your method live and see if it produces results in the present similar to those when paper trading in the past…and for as long as it lasts!
Lol; by the way; I really like the current structure of BabyPips forum; since we members get the basic idea of any specific member according to his/her activities.
Hm, I think the emotionless robot aspect is the key here. Those who can regulate themselves are in to win. Once you have a good trading plan, you can easily make $500 on good days even if you have below $10000 balance. You don’t need to trade every day, you can afford to wait for the markets going your way.
But it’s difficult to say what’s “realistic” because many newbie Forex traders expect to earn big from the start although obviously your profits will increase the more you refine your trading style. I came across a study from 2015 which stated 99.6% of retail Forex traders are unable to achieve more than 4 back-to-back profitable quarters (I saw this on Earn2Trade’s Facebook page). This suggests that Fx trading is a roller coaster ride where you really need to know what you are doing.
Well it’s tough to measure the average returns monthly or annually in forex for everybody and it’s relatively a subjective concept. If you are a new trader then first thing is do not get fascinated by big returns and fall in trap of unrealistic expectations. Change your perspective to knowing about the forex market and its opportunities and complexities, build a good trading strategy and try to minimize the risk. If that is followed properly and you can average anything around 10% monthly, that would be just great.
Bad day means that because of reality of trading you will bear losses. But they don’t have to affect your future trading performance, because its common newbie mistakes to pay attention to immediate losses and profits which distracts attention from long-term results.
If someone had a gun to your head…how many of these hypothetical trades woukd you ACTUALLY be comfortable trading?
The difference between Demo & Paper Trading compared to Live Trading is that your nervous system will tell what you really are comfortable with when your trading with something real at risk.
Like Dating…many guys would say they would say this or that if hot girl comes up to them…but then when they do…all you hear is " gu gu ga ga"…lol. they didnt account for the fact that they never spoke to a hot one before or figured out what hot girls actually respond to compared to ordinary girls - so there was no confidence to help them.
My point is that you will never know how you will handle a situation until you are in it. Actually putting something on the line - even on demo which is better than Paper - will be a key step to knowing how many of those 8 trades youd actually make.
There have been trades that I thought I would be using on my Live after Demo trading…but later realized that they feel too risky when money is on the line. This has reduced my monthly targets from 30% to 14% Monthly.
This better allows me to trade more patiently with a greater focus on the best ones that have a greater chance of success given the risk involved.
Sharing that info. is liking asking someone how much is in their bank account. Especially over the internet to strangers.Very Personal and unlikely to receive.
What you can ask for are their Monthly Percentages.
Your income is gonna be dependent more on your capital you put in trading rather than on the % Return.
Paper trading is a bit different than live trading. If your strategy produce 8 signals per month and you can implement your plan as you implemented on paper, it can be realistic. Actually The monthly return target should be proportionate to your trading skills. Not more than that or less than that.
It depends on how much amount you have in your account. According to my experience and knowledge, 10-20% of the capital account is the realistic amount in the form of the returns you can get via trading. It is possible if you are working on a money management plan.
It is not an easy task to get 10 to 20% of return from trading . With small capital trader has to limit his trading and targets.Many traders loose in a try to get more profit with some amount. Gain safe and and regular profits than plan of bigger ones. I am able to make 7% to 8% profit every month.
I think that it is possible. The thing is also about how much risk you are placing, how sustainable are things and your probabilities of blowing up.
You can use an equity curve simulator to test different parameters and see what is given in the distribution (this will give you a sample of the possible outcomes with those numbers)
Assuming that your stats keep stable on the long run and you execute adequately then in any given month (of 8 trades) you could do as good 30% profits or as bad as 8% losses. Also statistically you could have 2 months of only losers (and that would be still within possibility if you check a simulator), the biggest question is if you will be able to keep your process even when those events happen and if your system will keep working with future market conditions.
That said, it is possible to get 10% per month average with a 1% per trade? yes. Is it easy? not at all. Is it sustainable? not for most, market conditions change, trading strategies/systems go in and out of favor with the markets, conditions change, life happens. All this other variables are what make it harder for most of us and sustainable only for peak performers.
