Realistic monthly returns for a Forex trader?

[tonyro44]

Only about 5 % of funds out performs the S & P 500 and that’s year of year.

Hello,

Unfortunately, I think you may have misunderstood how the industry works. 2% is 2%. Doesn’t matter whether it’s 2% of a billion dollar fund, or 2% of a $10k retail account.

What you need to remember is that those funds are actually made up of lots of smaller accounts (not $10k small, but maybe only a few million each), so the 2% loss is actually just a $20k loss for a hedge fund investor with a $2k account.

There is arguably an advantage that you have as a retail trader over fund managers . . . They all have strict mandates governing what they can and can’t do, and when they enter or exit positions they can move the market significantly against their favour. You’re much more agile, as a small size retail trader.

On the other hand, they probably have far better research and resources, better quality of information, faster, cheaper, and superior execution capabilities . . .

So it’s all swings and roundabouts really.

But 20-30% is a realistic target. And remember, this is an average performance, over many years. Of course there will be years where a trader or fund significantly outperforms this (100% + returns), but there will also be entire losing years.

To get an idea, have a look at something like the monthly returns for Dunn Capital:

managedfutures.com/program_performance.aspx?fundtype&productId=18629

Best wishes,

Nick