Why aren't all successful traders millionaires?

Trading Discussion
1

This is an honest question… Why aren’t all successful traders millionaires?

If you consistently trade with at least a 55% or better success rate month after month, why are you not a millionaire? I know you will have bad days, but I read some people have 80%, 95% successful trades almost everyday. So if you consistently have successful trades cant you just keep increasing the amount you trade? Instead of trading one unit, trade 10 units at a time, or 100 units. I know you need the money to back up the trade, but lets say you start out with 10K, and you successfully make 100 pips a day. Start out trading one unit, in 10 days you have doubled your money, so you start trading two units at a time, 10 more days your 20K is now 40K… Double again, 30 days after you started trading your 10K is now 80K… 40 days 160K, 50 days 320K 60 days 640K, 70 days 1.28 Million. The growth rate is exponential if you did this.

I am sure there are lots of traders out there that easily average 100 pips a day. Again I know there will be bad days, but if your success rate is fairly consistent over the course of a month and you have good money management system (nice SL with minimal risk) why wouldn’t you be a millionaire, or a billionaire.

2

Because in order to double your money in 10 days you’d have to be risking an insane amount of money per trade.

What will happen is that eventually you’ll hit a losing streak and your account will shrink down to nothing.

Look at it this way. If you have $10,000 and risk 10% per trade then you can double your money in about 10 days. But when (not if) you hit a 5 trade losing streak you’ve lost half your money!! You then not only have to start over, but you have to rebuild your lost money first.

The only way to grow an account successfully over the long-term is with slow and steady profits. You don’t see too many forex millionaires yet because the retail forex market has only existed for about 10 years, and it takes around that amount of time to build up a $10,000 account to a million dollars. :slight_smile:

3

here is one for starters:
My GBPJPY trade journal - Page 36 - Forex Factory

4

If you disagree then please tell us why. Saying it’s a “load of crap” doesn’t really help.

I didn’t say that forex millionaires don’t exist, I said you don’t see too many of them. Just because you can point out one, or even a dozen, doesn’t mean I’m wrong. I’m just saying you don’t see them everywhere because the retail forex market is young.

5

retail forex had been around sice the start of the decade…and secondly in doesnt take 10 years to convert 10g…re-evaluate your spreadsheet - 30pips a day risking 2% you can covert 10g to a million in a year

6

My spreadsheet is working just fine, I just didn’t calculate anything with a 2% per day figure because those numbers aren’t realistic.

I’m sure some traders can make 2% per day, but 99% of traders don’t so I don’t think that’s a good number to use to gauge when the average trader should be a millionaire.

The question was why aren’t [I][B]all [/B][/I]successful traders millionaires. I agree that a couple guys may have done that but saying that it’s statistically possible doesn’t answer Mikemadman’s question.

7

Making 2% a day can be done. 2% of $500 is $10. You can trade 1 minilot and make $10 in one or two trades. Risk = stop loss * position size.

The reasons most traders do not succeed are
[ol]
[li]they don’t stop for the day after their goal is reached
[/li][li]they are impatient and don’t wait for the best possible entry
[/li][li]they attempt to trade their way out instead of stopping out
[/li][li]they listen to people on forums or at seminars
[/li][li]they overtrade
[/li][li]they do not stick with one pair or one method long enough to profit
[/li][li]they use complicated systems that do not have a positive expectancy
[/li][li]they use SL and TP that do not have a positive expectancy
[/li][li]they do not understand risk, stop loss and position size
[/li][/ol]

8

You do not have to risk 10% of your account per trade. If you double your $10,000 account each day, then you hit the million dollar mark in 10 days. RISK = STOP LOSS * POSITION SIZE.

If you risk 2% of your account that is $200.

You trade 10 minilots at $10 per pip. That means you have a 20 pip SL.

If you risk 10% of your account that is $1000.

You trade 100 minilots at $100 per pip. That means you have a 10 pip SL.

You trade 50 minilots at $50 per pip. That means you have a 20 pip SL.

You trade 25 minilots at $25 per pip. That means you have a 40 pip SL.

The missing parts are:
[ol]
[li]What is the expectancy of the system?
[/li][li]What is the frequency distribution of the trading range after the entry?
[/li][/ol]

Once you answer those questions, you can pick a stop loss amount that make sense.

9

I think in all of this we must realise that life has its ups and downs.

That is, the unexpected can enter your life.

Will you trade every day?
What about sickness? Accidents? Unexpected interuptions?
And much more.

And what about losses?
In these hypothetical arguements, losses are always [U]minimized[/U].
Thus we end up playing a fantasy game.

Remember forex is a [U]zero sum game.[/U]
Everyone is competing for the same money.
So how can everyone be a millionare??

To sum up, I like the statement [B]Tonymand[/B], [B]Honorary FX Member[/B], said…

[B]Trading forex is like wrestling crocodiles for a living.[/B]

Have you ever wrestled a crocodile?

If you can picture that, then you have a clearer understanding of why we are not all forex millionares!! :smiley: :smiley: :smiley:

10

You are absolutely correct. Fact of the matter a successful trader who’s been around for a while will definitely be a millionaire. The thing is most of the traders who claim to be successful are in fact marginally so or perhaps even losing traders.

If some one’s been around for donkey’s years and gives you a different reason you should instantly know they are’nt really successful no matter what they say

:wink:

12

I THINK every trader would agree,
the key is you should treat pips as points not as money…
i can recall reading this psychology in numerous trading journals…
they all say it at least once…
this way you would take a whole lot of stress out of it…
hence you will perform better and make better decisions…
It will make you follow the rules you have set and thereby
avoiding greed and in the long run make you a millionaire…

13

Well, it certainly is possible. I had one insane night I traded 8000$ to 80.000 in something like 6 hours.

Mind you,that was on a demo account, and and also I totally disrespected moneymagement. I suppose some of the trades in this particular session would have been margincalled, if live :eek:

But still, with relatively sane moneymanagement I�ve been doubling weekly (again, demo account) 3 weeks in a row.
That just by trading the eur/usd by hopping intuitively onto slides and rises between 9am-16pm. And no fridays.

Anyway, that just to illustrate that 10.000 to 1.000.000 in a month, or more realistically a year if you want, can be done and certainly those cases or comparable do exist.

A: Many of those will loose it again because after a ride like that they go bonkers and imagine what 10.000.000 would feel like :wink: and instead of reducing their already insane win/loss ratio they actually dial it up :eek::eek:

B: Others will just take the profit and thank god for their luck/skill/whatever, freeze the profits into a bank account and live nicely from interest (right,lol)

C: And of this small group some will try to repeat the process now better funded, and an even smaller part of those will eventually succeed and go for multimill.

That�s all just hypothetical, of course. The only thing I know for sure (ok, presume,lol) is that whatever the case, they won�t talk those numbers on forums.

I wouldn�t for several reasons, good taste being one of them.

Which raises an interesting question.
So, let’s say that in an unusually small time you traded your account from reasonable equity to real eyepopping wealth.

Talent, luck, it doesn’t matter, it happened. You made it from stable to rich/wealthy fast.

How would you react, into which of the above groups would you realistically put yourself, if any?

14

Nice phrase…

15

If you can make $200 - $400 a day in a matter of minutes, that’s $50,000 - $100,000 per year. Perhaps, there are better things to do with you time than sit in front of a computer.

16

Anyone here ever hit it for a 1 million plus major leverage hit and tried to cash out?

17

This reminds me of casino gambling. Everyone tells you about the 100 pip gain. Never about the 100 lost. Not saying they don’t do it…saying it just reminds me.

18

Why do you think that would pose a problem?

I once cashed out a substantial amount without any trouble at all (way less than a mill, but still fat). One day after giving the order it was on my account.

Just use a broker you can trust,like Alpari or dbfx.

19

I’ve read 8 hours worth of reviews. It seems to be one of the trait’s of a bad broker.

20

Just like any business it takes time, but if your an experienced trader and build your account up to an sub sequential amount then its is very possible.

21

Because most successful forex traders ARE millionaires, you dont know them doesnt mean they dont exist.

second, its because most are very near being millionaires and still doing the grind daily.

3rdly, successful traders lost almost all their early 'school fee’s thus the grind from almost zero cash or out working to get capital

Thats 3 categorize of successful traders, and by that i mean consistent profitable traders OR have finally found a way to do so.