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Amount needed to trade for a living??

  • #1
  • First Post: Sep 16, 2009 6:12am Sep 16, 2009 6:12am
Hi new here,

I know the above question is very expansive, and there is very little way of answering it directly, but all i wanted to know was what was the general opinion on the relative size of capital a reasonably successful trader would need to make a living from the Forex markets, say $50,000 PA.

I know its one of those very idealistic silly newbie questions, i am just curious as to what everyone thinks.

Kind regards

Jim
  • #2
  • Sep 16, 2009 7:14am Sep 16, 2009 7:14am
Hi Jim

Ball park, a novice short-term/daytrader who has thoroughly tested his strategy and has developed the skill and ability to trade it live can probably produce maybe 1 or 2% per month if he's reasonably proficient, going up to maybe 5 - 10% per month once experienced. Some make more, some less.

It's a bit like asking how long a piece of string is though, there are way too many variables

What made you ask? Trading? Thinking of trading?
  • #3
  • Sep 16, 2009 7:51am Sep 16, 2009 7:51am
Yes, i fully understand it was a slightly vague question, but thank you for your response, is the 5% including the use of leverage?

I am also thinking of starting to trade, but i intend to practise, read and learn for a while yet.

I just wanted to see what could be feasible.

How would you go about getting a mentor at this early stage.

Thank you,

James

P.S any other input is welcome.
  • #4
  • Sep 16, 2009 9:42am Sep 16, 2009 9:42am
Also wondered, what would be best to start on, an mt4 system or just a brokers custom software? For example AC - Markets web trader software?

Regards JIM
  • #5
  • Sep 16, 2009 2:48pm Sep 16, 2009 2:48pm
I don't know very much about ACM but from the looks of it they're a Swiss company (Swiss regulation of forex is a bit of a grey area), personally I would choose one of the NFA or FSA regulated mainstream shops (Oanda, FXCM etc). It again depends on what level of funds you're thinking of starting with and what's important to you ie security of funds etc. I only use MT4 for charting as I found it a bit clunky for my trading style (intraday 'semi-scalping'), if you're a swing or longer term trader it might be fine for you. Have a play on a few different demos and make a list of must-have's to help narrow down the field a bit. Regulation, either NFA or FSA is a must in my opinion, it's a competitive market so there's no need to settle for second best.

Yes the 5-10% included leverage and quite reserved risk, you might be more aggressive and risk tolerant than me!

As far as mentoring, I would get a general overall view of the market and trading in general first. Having a mentor can be very useful if it's the right person but as you probably already know there are a lot of sharks in this business so make sure the person really does know what he's doing, in real-time if possible! Most mentors will usually want convincing you're a good prospect as forex has more than it's fair share of 'challenged' wannabes and money isn't a mentor's primary motive for mentoring, they want to know their protege has a reasonable chance of success before they'll think about mentoring. Needless to say don't pay anyone a dime until you're absolutely sure they have the wherewithal to provide exactly what you're looking for as there are plenty of people who seem quite plausible and will happily take your money!

I don't want to put you off but it's not an easy journey. It can be frustrating, incredibly psychologically challenging, and a lot of hard work. The upside is if you get it right trading can be very rewarding and extremely lucrative, well worth the effort in my opinion.
  • #6
  • Sep 16, 2009 4:54pm Sep 16, 2009 4:54pm
I concur with Pipmutts estimates of monthly % gains, thats being conservative in terms of %R and not looking to drawdown your account into eternity.

Probably 150k - 200k upwards anyway, and a years living expenses saved up beforehand, if you have a family/responsibilities along that line then this will be a necessity.

Just start reading some of the stuff on here and demoing, experience and correct psychology will probably be the hurdles you will most likely encounter. No need to go get a "mentor", as you have to ask yourself sometimes - if these guys are so good, why do they need to have students ? What are they getting out of it ?

Traders trade and teachers teach.

Again one must remeber this is a negative sum game, so the chances of you losing are already higher than the chances of you winning and you have not even placed your first trade yet ! (Bad times)

Best Regards and good luck,
Jig
  • #7
  • Sep 17, 2009 3:16am Sep 17, 2009 3:16am
Isnt that the same with any inefficient market though. If markets were geared to giving the trader the better chance of making money, we wouldn't have to many large markets left.

I have also always had a slight concern about why people teach, i mean i earn a fair amount with my day job and would never dream in teaching the subject, i earn far to much doing it compared to that of teaching it.

200k should be doable once i can prove myself to be a consistent trader. Also no responsibilities here, a true hedonist.
Thank you very much for your replies they have been very helpful.
  • #8
  • Sep 17, 2009 10:57pm Sep 17, 2009 10:57pm
Quoting Jigsaw

Just start reading some of the stuff on here and demoing, experience and correct psychology will probably be the hurdles you will most likely encounter. No need to go get a "mentor", as you have to ask yourself sometimes - if these guys are so good, why do they need to have students ? What are they getting out of it ?

Traders trade and teachers teach.


Jig
Jigsaw,
I agree with most of your post. But I take exception to the above quote. Traders trade and teachers teach. That is a load of you know what.

Are you saying that someone who has knowledge and is willing to share that knowledge doesn't really know anything? Gee, I wonder how anyone learned anything in their life.

Now, I do understand that there are shysters out there who will claim that they know how to trade and have been very successful at trading. They state that all you have to do is "pay me $xxxxx amount and I will share this with you."

But there are genuine people out there who will share their knowledge/expertise with others who are truly dedicated to learning.
  • #9
  • Sep 17, 2009 11:29pm Sep 17, 2009 11:29pm
Quoting jim987
Hi new here,

I know the above question is very expansive, and there is very little way of answering it directly, but all i wanted to know was what was the general opinion on the relative size of capital a reasonably successful trader would need to make a living from the Forex markets, say $50,000 PA.

I know its one of those very idealistic silly newbie questions, i am just curious as to what everyone thinks.

Kind regards

Jim
I'll refer you to these two threads. Both offering a mentoring type service. I can't vouch for them, but others here on the forum can. Both have excellent reps here on FF as far as I'm concerned.

http://www.forexfactory.com/showthread.php?t=27286

http://www.forexfactory.com/showthread.php?t=2331

Remember, just because you'd like to trade for a living doesn't mean that you will or even can. Very few actually trade for a living, some people just aren't made out to be traders, investors, teachers, doctors, mechanics, Good luck to you though and I hope you make your dream a reality.
  • #10
  • Sep 18, 2009 2:40am Sep 18, 2009 2:40am
Thank you for you help.

I fully understand that very few people ever make a living out of forex. although i do have full dedication to learning .

I have worked in finance before, i am just new to forex, so i understand the stress that goes with trading and , thus far, have dealt well with it.

This does seem to be a very helpful and friendly forum.

I would like to thank you all for your help.

Regards,

James
  • #11
  • Sep 18, 2009 3:16am Sep 18, 2009 3:16am
Quoting GulfCoastPip
I'll refer you to these two threads. Both offering a mentoring type service. I can't vouch for them, but others here on the forum can. Both have excellent reps here on FF as far as I'm concerned.

http://www.forexfactory.com/showthread.php?t=27286

http://www.forexfactory.com/showthread.php?t=2331

Remember, just because you'd like to trade for a living doesn't mean that you will or even can. Very few actually trade for a living, some people just aren't made out to be traders, investors, teachers, doctors, mechanics, Good...
I can vouch for both of these threads. I am a member of both groups. And they are brilliant.
Jacko's trading blog and trade calls are fabulous and James charting methods are a revelation. If you want to trade for earning an income these are the two go-to guys. Both are long timers here and have the reputations.
  • #12
  • Sep 18, 2009 3:17am Sep 18, 2009 3:17am
Quoting kenkomo
I can vouch for both of these threads. I am a member of both groups. And they are brilliant.
.
Fantastic, thank you.
  • #13
  • Sep 18, 2009 3:24am Sep 18, 2009 3:24am
lol, I don't think the OP is that gullible, save your time
  • #14
  • Sep 18, 2009 5:14am Sep 18, 2009 5:14am
Quoting pipmutt
lol, I don't think the OP is that gullible, save your time
Sorry, have I missed something?

Gullible?

Have i fallen for something here?
  • #15
  • Sep 18, 2009 5:42am Sep 18, 2009 5:42am
Quoting jim987
Sorry, have I missed something?

Gullible?

Have i fallen for something here?
Sorry I didn't mean to be cryptic, it's just some people have a different idea of what a mentor is and promote some paid-for training courses and blogs. There's no need to pay for that stuff in my opinion, especially when there's so much free info available around the net.

I'm not a fan of people who ask for money up front in this business, it usually ends up as money wasted!
  • #16
  • Sep 18, 2009 5:43am Sep 18, 2009 5:43am
Quoting jim987
Sorry, have I missed something?

Gullible?

Have i fallen for something here?
If I was new to the business I would forget about signing up to Jacko, just go to the James16 thread and read the stuff. Nobody is going to do the work for you, your still going to have to do the work.

Quoting joeyb
Jigsaw,
I agree with most of your post. But I take exception to the above quote. Traders trade and teachers teach. That is a load of you know what.

Are you saying that someone who has knowledge and is willing to share that knowledge doesn't really know anything? Gee, I wonder how anyone learned anything in their life.

Now, I do understand that there are shysters out there who will claim that they know how to trade and have been very successful at trading. They state that all you have to do is "pay me $xxxxx amount and I will share this with you."

But...
Hello good sir,

I really mean it more specifically to trading rather than all round, I know "true mentorship" does happen but it is rare.

What I am saying is theres no way in hell a trader would waste his time teaching his methods to anybody when he could trade his methods himself and make so much more money.

Of course you have your guys like Jacko who simply use their "signal service" and "mentorship" as silent marketing to get wealthy individuals to put money into his fund. But I digress. Not saying his methods are totally incorrect, but I have seen several posts in his blog (Sent to me by his members) and they were hilariously awful, but I that's enough of that.
  • #17
  • Sep 18, 2009 5:51am Sep 18, 2009 5:51am
Quoting jim987
Hi new here,

I know the above question is very expansive, and there is very little way of answering it directly, but all i wanted to know was what was the general opinion on the relative size of capital a reasonably successful trader would need to make a living from the Forex markets, say $50,000 PA.

I know its one of those very idealistic silly newbie questions, i am just curious as to what everyone thinks.

Kind regards

Jim
To add to what others have stated, the amount required also depends on your living expectations. For example if you are looking to replace your 100k+ yearly salary then you will need to be looking at a substantial amount. 100K with a conservative target of 2% per month will net you around 2k, which means youd be better keeping your day job (im using 100K as a rough figure).

I guess the other pill you need to be able to swallow is the down months in which you may make a loss or nothing, in which case you would need to draw upon your trading funds or have, as mention, at least a years worth of living expense money put away.

Ultimately the price is one that you feel comfortable trading on a regular basis and one that would allow you to maintain a lifestyle that you have been accustomed too.

Razor
  • #18
  • Sep 18, 2009 5:55am Sep 18, 2009 5:55am
Quoting Razor_trader
To add to what others have stated, the amount required also depends on your living expectations. For example if you are looking to replace your 100k+ yearly salary then you will need to be looking at a substantial amount. 100K with a conservative target of 2% per month will net you around 2k, which means youd be better keeping your day job (im using 100K as a rough figure).

I guess the other pill you need to be able to swallow is the down months in which you may make a loss or nothing, in which case you would need to draw upon your trading funds...
Good post,

Love your posts Razor. Always informative and you never bullsh*t which is so rare around here.

Vouched.

Best Regards,
Jig
  • #19
  • Sep 18, 2009 5:59am Sep 18, 2009 5:59am
Quoting Jigsaw

Of course you have your guys like Jacko who simply use their "signal service" and "mentorship" as silent marketing to get wealthy individuals to put money into his fund. But I digress. Not saying his methods are totally incorrect, but I have seen several posts in his blog (Sent to me by his members) and they were hilariously awful, but I that's enough of that.
Jacko and his method made good money during the last bull run because it worked out that when the market pulled back, it usually knocked you out, travelled the required distance and allow the "anti hedge" trade to get you back in at the point you were knocked out at.

During the times of sideways action, or a major shift much like has happened he has had to increase the strategies risk while trying to draw profits from a very choppy market and unfortunatly the Risk to Reward is just not feasible. Where before you could take a trade with an initial SL of 50 pips and the market ran for months and years, now there isnt any major run but alot of pullback. Im not totally clued into the whole thing so I cant talk for entry specifically but i know most entrys are taken on whole number and fibs supports. Right now it seems more active gambling and not a sound strategy, the Risk/Reward is just too poor to expect constant results without the feeling of bleeds.

J16's thread, whilst long, is a fantastic read.

Razor
  • #20
  • Sep 18, 2009 6:00am Sep 18, 2009 6:00am
Quoting jim987
Also wondered, what would be best to start on, an mt4 system or just a brokers custom software? For example AC - Markets web trader software?

Regards JIM
As you are in the UK, I would suggest Alpari UK as a starting point. Their demo is MT4 and they have a reasonable reputation for this sort of b roker.

As long as you place one trade a month the demo is ongoing.
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