There are so many systems and strategies. Developers promise 40% 50% 80% per month. All this sound too good. Sure thing it can be a month when you make such profit but make it 12 month in a row and have 600% 700% income in one year. Unbelievable for average trader.
So now we are talking only about live trading with real money. What real profit you can expect from a Forex?
While this is not a common strategy, if you were a trader that preferred many small winning trades and only a few large losing trades, risking 10% of your capital per trade would be acceptable.
Example:
stop loss at -100 pips
take profit at +10 pips
Your Risk reward Ratio is 10:1
But, you are 10x more likely to take profit on each trade then hit your stop loss.
If your win:loss ratio was greater then 10:1 you will be a successful trader!
Maybe, but risking 10% of your capital for a 1% gain, as suggested by odi3, does not sound like a viable long-term plan to me. In fact it sounds like lunacy. I never take worse than 1:1.
Me? I risk 1% per trade. I think that that puts me at the more conservative end of the scale, I know that there are many on here who risk 2%, 3%, whatever. 1% works for me, I like to limit my risk, then move on to the money making part. But for me the key point is that I would never risk more than I stood to gain on any given trade. I never take less than 1:1 R:R, and prefer better than that.
Why every body so freak out?! Hundreds of traders blow up there accounts trading with much more less amount of capital. What is so unbelievable? :eek: Everybody has a right for his own opinion, maybe he will be a milliner soon!
You act like he said: " hey I know a new way of making money: let buy high and sell low!"
Inexperience, the lack of a good strat and dare I say… poor money management? I’m reasonably confident the handful of experienced retail traders in here who ‘actually’ make a living at this wouldn’t risk more than 1% on a given trade or fractions of 1% on either multiple entries on a cross or crosses. Also consider this. As your account grows or if you are already trading a large bank roll, you do not need to risk more than 1% to make a very good living or compound up your balance to very big numbers indeed in a few years! ‘Slow and steady wins the race’.
I was simply addressing the idea that risking 10% was a sensible approach to making 1%. As many new traders use this site to learn from, I thought I should put forward my view that reward and risk must be better balanced than that if trading is to be successful long term. ‘Freak out’ is a bit strong!
Quite: on an account of £100,000 that is a minimum £1000 profit per winning trade. Most decent strategies will at some point get your account to £100,000 if you start with a few thousand. Play the long game with a decent strategy and you really can’t go far wrong. I would suggest that that is a much stronger approach than that of those who advertise systems that give a 50% monthly return. etc.
WoW! So many posts! There was a wrong formulation of my point: you should not take more then 10% - that is a limit.
We are far from my main question about profit in a month. What you can expect. Sure thing any profit is already good and if you have row of successful month - GREAT.
I wanted to add point about 10% because you bet your entire capital for each trade and a have a great profit for one month before you fire up all.
I make around 5% from Forex and 15% from stock trading, these are my monthly averages. I usually withdraw around 5%.
One month my account was actually down by around 4%, so I “punished” myself by not withdrawing any wages that month.
As you can see I am doing a lot better in the stock market however I haven’t really given forex a chance, I’d be interested to see if other traders here are in the stock market too?
I hit 10-30% a month on Forex. I plan to start stock trading next Spring, assuming that I am still hitting that level of return in Forex - I am sticking to just Forex until I have posted 12 months in a row with a return of over 10%. Then I can fund the stock trading startup entirely from the Forex income without affecting anything else.
I’m still relatively young, so am playing the long game on this, am happy to take a steady approach, careers don’t happen overnight. Wait for a year’s good results in one trading arena, get to the point where I have the disposable income that comes with that, and hey presto, stocks becomes a risk-free investment.
I had Forex tuition, and will go on a Stocks course, too, when the time comes, so with that and my seed money for the account (plus the expected learning losses) there will be a fair lump to shell out up front, but it worked for me on Forex, and with this plan it is funding itself. I am lucky that I make enough from Forex that I will still have an income on top of that which I spend on Stocks. I have to love a risk-free, cost-free investment!!
(Okay, I know that it is not free as such, but you know what I mean)