I’ve recently migrated from a demo account to a live account after a half years worth of demoing and several months more of research. I’ve blown a few accounts and went through some pretty rough times before I found something that worked for me.
Anyway, I’ve been sitting at roughly 120% monthly growth for the past two months with a 500 dollar initial investment. I’m not over leveraging or exposing myself to unrealistic risks (90% win ratio, limits slightly smaller than stops), and it’s working out for me.
I’ve been wondering how this compares with other people’s experiences in this market? I thought I was doing ok until I saw some of the monthly winners over at my brokers monthly drawings - some of which posted 1,000%+ monthly growth. It’s crazy - I don’t know how anyone can post those sort of numbers without exposing themselves to huge risks.
That is a huge monthly gain if you can get 120%!! If you compound that rate even for a couple years, you get into the trillions of dollars with just a small investment. If you can’t see why this cannot possibly be sustainable, I think you might get burned!
getting 1000% in a month, I’m sure they were just gambling for the contest’s sake. Some of these gains are of course possible, but sustainable, pretty much never.
There was on guy in future trading about 20 years ago who played in a year tournament.They started with 10 thousand actual money he turned it into over a million dollars.He said later he was risking 60 percent of his capital,which he would never do in his own trading.There is a currency scalper(Anakin) here i think his risking 30 percent of his capital per trade with a 90 percent success rate. He turned 200 hundred into over 4 thousand in 5 weeks, very agressive trading.
The problem is, a 90% success rate does not mean 1 failure followed by 9 successes. It could well mean 45 successes followed by 5 failures. If you are risking 30% per trade then you’d do very well for 45 trades (and turn your 200 in 4K) but on the next 5 trades lose it all. As someone else said, it’s not sustainable.
I agree Matt even with high percentage of winning trades a streak of losses are envitable.The most i would ever risk would be 5 percent and that is a little high.He could also put a cap on his percentage of bankroll after 2 losses and scale back,he would have to be creative with his moneymangement.
That would be Larry Williams: he wrote a book that makes reference to how he traded to generate those returns, and why the unavoidable level of risk incurred makes trading in that fashion unsustainable. Trading is a merciless pursuit to begin with: gearing your account to the hilt and tapping deeply into your margin on every trade may generate eye-popping returns, but a string of bad calls can result in a devastating drawdown that - if it doesn’t put you into a call - will be very difficult to climb out of… Retail traders come and go by the truckload every day, enticed by the promise of large returns on the way in, betrayed by the pursuit of large returns on the way out.
That doesn’t mean you can’t double/triple/quadruple your account in a year, etc.: you can, and you may be able to do it responsibly. But many (most) can’t do that. Those few than can, do, but even they are limited by akeakamai’s math. And then a few of those that can’t adapt become winning traders, albeit with a more typical (slow, plodding incline) equity curve. As for the majority, they can’t produce those returns sustainably and they - apparently - can’t adapt. They disappear.
I have become much more conservative with this market and my experience.
When I first started I would shoot for .5 to 3% a day. Yeah that is great money but a string of losses gives most of it back, if not all of it or more.
For this year I have been up around 4% each month and actually gave back 3% this month.
I am waiting for market conditions to return to a place where I feel more comfortable making more aggressive moves. Right now the good trades have very few set ups for me. So for the time being I will keep my conservative strategy on the front burner.
I really think the major problem is people that expect to make good money from a relatively small investment.
I don’t think any professional trader would ever bother trying to earn a living from anything less than a $50,000 account, and even that would require a lot of skill and experience! I say take this seriously, like a real business venture, and save up some capital while you learn how to trade. But even that can be hard for some people because they will jump the gun on their own success and put all their money in just as the party is ending.
Imagine that you as a trader represents a real corporation that people can trade. Look at your own performance, would you buy stock in yourself? Suddenly 2 weeks of profit in a row doesn’t sound so impressive eh? You want to see long-term results before you invest, and you should! Don’t blindly throw money into the mix, but add it slowly as you prove to yourself that you can actually turn profits month after month.
If you are adding your own money on top of consistent monthly gains (even small ones) you will see your account grow at an accelerated but sustainable pace until eventually you have the account size you wish to trade with. By this time you could make trading your full-time job and ditch whatever second source of income you found to help you along the way.