I remember the first few weeks of reading up on the forex market. I was filled with so much joy and hope. The market had so much to offer, so much money on the table. The brokers made it sound so easy and I wondered if it was too good to be true. Well, after 5 months of live trading, my verdict is yes it was mostly a mirage. The forex market does offer substantial rewards if you know what you are doing, they say.
When I started out I d pull out my excel sheet out and punch in the numbers. If I make 40% a month then I will be making this huge amount in two years wow… After my first month of trading, I cut the number in half to 20% and still the wow factor remained. After the second month I still held on to the 20% goal. I failed to achieve it in my third month and decided it was time to slash that in half too. I then settled on 10% a month. After 5 months I have to admit even that is hard to achieve.
A look at my last 5 months trading tells me, we know nothing about the future. You might have monthly gain goals but the market gives you what it wants and there s no way of knowing what that will be. So I ask, what kind of goals do we set? Because goals keep you on track and without them you are just muddling through. I am currently working on new achievable and sustainable goals (I think) that ll help with my long term profitability. I have currently settled on maintaining a 40% profitability and improving risk:reward on closed trades to at least 1:2.
So I ask myself do we aim for too much a return. The transparent long time traders on Babypips like HappyPip, Huck, Cyclopip and Pipcrawler, show through their quarterly reports that 10% per quarter even looks like a long short.
Again I expanded my search and looked into the best professional traders at currensee for the first half of the year and the returns eye opening but not on the same level the excel sheet promised.
Indeed this market is profitable, but will you make as much as the excel sheet tells you? ( I doubt it)
It s time to develop a new set of goals. Goals that are profitable and sustainable. I welcome all the help. (No need to back up advice with a myfxbook link).
I do agree that making realistic goals is the first step you have to take in this business. I think everyone starts believing they can make millions in few years, but once faced the market one on one, those goals become more and more earth like.
But i disagree with lowering your monthly goal more than 10%. At least i won’t. I think the main point for having goals is keeping you reaching for something. If its too high, you’ll put loads of effort and won’t reach it, you will not be satisfied even you did a great job. That will only bring frustration and sadness. If you make it too low, you won’t feel you’ve achieved something or that you are making progress. There won’t be that feeling that is worth doing.
In the i think it all comes down to mental stability. If you feel alright reaching for that 10% monthly, but not achieving few months in a row (even tho you did make positive gain) and you start to feel down, maybe you should lower your goals. If you keep that 10% monthly as a start guiding you through this vicious sea of money and being happy about being positive or BE for the month, then why not.
This post is dedicated to those who are under 1 year trading forex. If you trade for several years and didn’t find a comfort zone or stability either in your profits or mentally, I THINK you should overlook your trading plan,strategy,goals, even if its for you.
Just putting out this - am not profitable yet, so my word should be taken with caution
The guys listed above are the trade leaders trading retail size funds. People who join the program can copy the leaders trades through a trade copier for a fee. So if people are ready to pay someone for 20% return in 6 months, then it must be a high return in the market.
Well, if they are just “copying” the trades, do they choose the position by themselves, or is it given by the trader ?
If the position size is given by the trader, it must be, like hedge fund managers, very low risk positions so the progression curve can be the more linear possible, and not “zig zag” style. This because when you follow blindly some guy, even a - 5 % freak you out, because you don’t know how this **** happened, nor when the money will comeback.
This is why leaders must reduce their drawdown at the minimum, decreasing the returns in the same time.
If the position size is choosed by the " follower " , the % return has no sense, since they could increase the position to win more on each trade.
I think people are going it the wrong way by setting a weekly/monthly goal of X% beforehand. By doing so, you may put pressure on yourself to trade even when there isn’t a valid trade set up, just to reach your goal. Also if/when you achieve your target of X%, stopping for the rest of the month, even when you see a perfect setup, is stupid. I do not believe that this is a good reason for stopping trading. Deliberately not entering a valid trade set up according to your system could be detrimental to your long-term average % increase.
I believe people should just play the game and do the best they can, then [U]afterwards[/U] calculate their average weekly/monthly increase. You may want a 10% consistent increase, but the reality is that it is likely to be something like this (e.g.): +15%, +12%, -5%, +9%, -3%, +19%, +9% (i.e. highly variable). Average out this example and you get 8%. If you capped yourself at 10% each month, then you would get this: +10%, +10%, -5%, +9%, -3%, +10%, +9% (average of 5.7%).
The only exception I could understand are scalpers who may need to reset their brains from fast-paced trading.
That’s a great post liftoff – it’s a sobering reality that way too many people don’t want to accept. I think the sooner one accepts it, the easier it is to trade without having unrealistic targets which you might never achieve.
I work for a bank (although not as a trader) and I know that the currency traders make 40% on average per annum. It makes you think twice about goals of 40% a month. Although some traders will certainly be better than others, so some guys make be making 80% whilst others are dragging down the average with 10%. Still, nowhere near 40% a month.
That is why I am looking at the learders. I believe they are following best practices as per risk per trade and amount of money traded; as such are the best retail group to look at. But we are straying from the main question asked. Is it a good idea to set high level goals which seems unsustainable or look towards other goals that can help boast profitability.
I still think that comparing ourselves with institutional traders has no sence. For exemple David Jefferson ,ex city trader on this forum, is going to make a 100 $ -> 10 000 $ challenge.
Great insights. If we are able to better gauge an industry average then we can all start setting more realistic goals that will definitely help us cut back on over trading and revenge trading. There will definitely be traders who make a 1000% a month, but if the yearly average among profitable traders is 40%, 20% or even 10% then I believe that puts the targets in the “I know I can achieve that with one trade per week” category and helps set realistic targets for newbies.
You used the right phrase, “is going to”. But if he hasn’t done it yet (in a transparent, verifiable , before hand manner) then it is just like the excel sheet illusion. Many have tried and failed. Others have claimed they did it ( but there s no way to verify). So it comes back to credibility and transparency.
When he actually does it, please PM me with actual trade log. Not words in thin air like “here guys, i did it post random numbers”. Thank you.
And referring him as learning process benchmark (it took him 7 weeks to learn) isn’t right aswell. Please read more than one thread. There is more people talking about trading. Often enough you will see that trader becomes consistently profitable after 1/2 years of trading. AND IF HE REALLY did learn it over 7 weeks, he was taught by top inside traders who have their teaching methods “calibrated to the pip”.
As for reaching your monthly goal, i cannot tell what i would do after that. Firstly i would be happy Secondly, i would trade more carefully (?). This is something i still have to face to actually know. Thats why i can’t answer your question.
By the way i liked kwyjibo answer. Makes a lot of sense - “[I]people should just play the game and do the best they can[/I]”
I generally don’t have a set goal. I do have an excel table which details what I would make in 50 weeks if I were to make X% per week but it’s more for dreaming because dreaming is important. It’s why we’re all here after all.
If I had to set a goal, it would be based on my back test results. Arbitrarily setting a goal of X% doesn’t work for me.
So there’s your answer, the realistic goal is the one that your back testing (and forward testing I guess) gives you.
Secondly, i would trade more carefully (?). This is something i still have to face to actually know. Thats why i can’t answer your question.