What percentage profit per day IS possible?

Daytrading equities during the internet stock and tech stock boom, with good tools, my "edge" was huge. We had 10 to 1 margin, option hedges allowing legal shorting on down ticks, and fast execution systems. During volatile months over the course of a year, it was quite common for even the weakest traders in our office to do 50% to 80% on our equity per month scalping.

I just finished reading The Fool's trading journal here on our site, check it out. "4% a Day Forever".

Many people posted that 4% a day average is an impossible dream, perhaps rightly so.

With Forex being the way it is now, considering current volatility, leverage, etc., What IS possible for a good trader scalping intraday?
When does the vote at 4% = impossible swing to ??% = possible for a good experienced trader following their trade plan with proper risk management?

This thread inspired by traders and forum members who have contributed so much already. Acumen, Turveyd, TheFool, Xaron, Bemac, Chicky, and so many more. I have learned something from all of their experiences and writings. Though my first goal is to be profitable, I hope over time to show definitively that 1min TF Scalping can be profitable. As Fx-Petra once stated -
"10,000 trades @ 52% win rate would not be significant enoungh, from a mathmatical perspective, to draw any conclusions. However, from a practical view point, if I could verify a system that could be a winner after 10,000 trades (or trials) I would start to get excited!".

What AVERAGE percentage profit per day is possible?

Obviously, this depends on the systems or methods. If you have a system or method with positive expectation or an "edge", then the only other question is... "How many signals or opportunities do you get to apply that edge during a certain timeframe?"

Though taking profits and stopping for the day at a predetermined goal is good for confidence, if we truly have an "edge", we should take every valid signal or opportunity advised by our methods or systems.

As I'm relatively new to forex, one of my first goals with live trading is to determine if I have an edge and approximate what it might be....no easy task.

Nice to see you started a thread.

I agree.

The "sky" is the limit in the financial markets profits ... the thing is that this "sky" is determined individually by ones intelligence and natural talents for trading.

For some 2% a month is impossible ... for others ... it's easy task ...

Just like in any other area in life.

what IS possible?

go with a 400:1 broker and get at least 100 pips with your entire Balance on the trade then you're talkin 400% return or MORE

maybe you'll luck out and go a whole week with all winners and end up with like $625,000 in one week

Well I think what he meant was, "What is the average" a person can make. If you make 100% in 1 day, You'll never Average that over time! I can make a fairly safe bet that I could take a $100 account, and double it first day I tried... as long as its not on a monday or friday I would also accept a challenge to turn a $1000 into $2000 in a week, with a good amount of confidence I'd succeed. But with these kind of returns, the mind gets funny and foggy with the larger numbers and soon starts to freak out, making different trading choices then when the account was small and no big deal if you lost it all.. thats why as my account grows, I focus more on preserving that amount, then adding insane percentage returns every day. So while in my opinion it's no big deal to double and triple 3 and 4 figure accounts, its a much bigger deal to do the same with 6 digit and larger accounts. Not all, but most humans will be affected this way.

Very good reply dbeach, the % of return is not the issue, one's personal ability to "deal" with large numbers is the issue. For someone used to 7 figure finances, a 4% return wouldn't be much if an issue on $100,000 K, but for someone used to 5 figure finances at best, that same return on that same amount might just give them sweaty palms!

Then that fear would cause them huge issues.

I appreciate the replies...and I know some variant of this question has been asked here in the forums by many.

I have some experience in trading different markets, but don't confuse that with me being a good trader. I have far to go, and I am new to Forex. I hadn't really considered it before January of 2009 to be honest.

I have some simple short time frame methods (not System!) that I trade with, and am trying to apply them to forex. Inspired by other "scalpers"
in this forum and another I had found through searches, I believe that some small edge can gained through short term price scalping. Perhaps my estimate is high (or low), but assuming a %1 profit expectation per trade on average, over the long-term you can assume that after 100 trades at %1 percent risk per trade you will have gained %1 profit.

So if you have methods that can give you a 100 trades a day, you should be able to make %1 on capital (on average).

This of course implies 1) No blow up trades! 2) taking every signal - No "oh Im up $ (some amount) I should stop for the day"

My example may be extreme, 100 trades per day is ALOT, I hope to define my personal edge as better than %1 so that maybe I can achieve returns with 20-30 trades a day perhaps?

We will see, as I said, I am new to Forex. My first forex account for $2000 at MB Trading is down about $300 for March thru September. I only traded it part-time, evenings (Asian sesson, 2 days a week) to get a "feel" for the forex markets and to begin my studies.

I have opened a $2000 account at Oanda for scalping specifically, and to track/trade my methods (now more defined). Hopefully after 500-1000 trades I will have an estimation of my edge (if any).

I read Trading in the Zone by Mark Douglas yesterday. If you haven't read it, you should. I wish I would have earlier.

Last week, I did bad "things". Some revenge trading, adjusting trade size irrationally, etc. Almost at my first 100 trades on my "scalp" account.

Goals for next week:

1. More trade time. (more than an hour or two here or there)

2. Only EUR/USD. (lowest spread, it is moving during the times I trade)

3. Set a max loss per trading day, and stick to it. (3%, with a trade size of .6% of account)

Probably far better than most people realise. The fluctuations in capital would be immense though. Very few of us will have an edge that large, and an amount risked to match it, so it's not worth thinking about. What might be worth thinking about is what is possible for you, based on your edge and tolerance of variance.

It is very difficult, if not impossible, to get consistent results in an inconsistent market.

Don't know about others, but experience tells me "Diversification" in every aspect of trading is the key to relatively consistent results. It minimizes risk as well as the reward.

Less is more.

My advice would be not to think about a definite, benchmark or probable % but focus on gaining whatever and whenever you can conveniently get. They would add up to something by the end of the year, and if not, losses won't be painful - with hope still alive and you be in business.

In this business, no matter how skillful or smart we are, cannot create an opportunity, we have to wait for one.

I think calculating % by each day will leave you with too many dissapointments!

I have a goal of how many pips I want per month and if I was to go by days friday would have left me very down in the dumps with the sudden drop in g/u g/j.

But overall I had a profittable week, so I think you are better off to look at your gains or losses over a longer term....A lot less stressfull.. imo

He's talking about an average, not achieving x% day in day out. As someone else said, better to focus on the trades, and if you're good, the results will follow.

yes i see what your saying but to get an average you have to look at the longer term......

I increased my account by 6% this week but on friday....... one day i decreased it 3.63%

Thank you all for your input, I appreciate the thoughts.

I am coming to the belief that smaller time frames allow more opportunities to exercise an edge in the market, but...

Trading in smaller time frames (i.e. more frequently) also creates more opportunity for mistakes.

Thanks! Enjoy the rest of the week-end.

Hi Intu!

What is possible? Yes, good question. As one can see in the results of my journal thread, I made about (avg) 5% per day for over four weeks on a 4-figure account, then I made about (avg) 2% per day for 8 weeks or so on a 5-figure account.

Of course, sadly, I have made huge & typical newbie mistakes in the last couple months & I am currently about 60% in the hole. Live, stay alive, and learn. Now I am gauging my success simply by how well I stick to my Trading Plan. If I do that I consistently make between 1-5% per day. A day without a big mistake and a serious deviation from my Trading Plan is a good day.

So, yes, what is possible? If you can make 1 or 2% per day for many weeks running, then why not for many months and years running? Indeed. It boils down to discipline. It is not hard to do those 2% days for days at a time but it is also easy to let your guard down and have periods of consistent loss.

Also, the market changes and a trader needs to be able to recognize those changes and adapt. I had never daytraded before last summer and I came into the game during ranging PA conditions in the E/U. Then, towards the end of August, lots of spikes up leading into the current uptrend caught me. My range trading method was fighting a trending market and I paid for that mistake with losses.

At any rate, I am learning from my mistakes and from the pain of loss and I still believe consistent gains are possible. You might be a scalper or a swing trader or a position trader & you might combine any number of trading methods but as long as you have a Trading Plan with methods that have an edge, and with sensible risk and money management strategies - and if you can apply the discipline to stick with that Trading Plan - then you can win.

Good Luck to all who try and remember, "if at first you do not succeed, try, try again."

Percentage profit per day is forever changing. Better off with an average for the year, but then again it depends for which year you calculate.
Last year's profit has nothing to do with the next as no one knows what it'll offer.

Keep it simple and take what the markets gives you, if you start being specific about a daily percentage you will feel frustrated once you have your first daily "negative percentage", let's not mention the mental confusion ...

The top 10 traders for the October 16, 2009 trading day are below*. These results are not month-to-date. They are only for the 24 hour trading day of October 16, 2009.

http://forexforums.dailyfx.com/352991-post1.html

1. United States - 466.09%
2. Canada -352.29%
3. United States- 348.72%
4. Canada - 340.38%
5. United States- 330.34%
6. China- 241.16%
7. China - 227.03%
8. Japan - 195.82%
9. United States - 195.81%
10. Canada - 192.01%

I think the term "scalping" has begun to take on a different meaning, much like the term "daytrader". In the past, 'daytrading' (or scalping) was used to describe someone that bought and sold hundreds of shares of stock, only holding them for as little as a few seconds at times. Now it is anyone that trades 4 round turns in a 5 day period. Scalping (in currency trading) has come to mean having small profit goals of 5-10 pips per trade. Unfortunately you don't have Level II quotes in currency (the closest being futures), so these scalping trades may be held for much longer than you may think (compared to seconds, anyway) to realize this profit.

Unless you are a fund trader, perhaps thinking in terms of % may not be the clearest way to consider profits. Coming from a stock/options background, I found it easier to think in terms of trading-day profits rather than % ROI.

So to answer your quesion in that respect, I believe that a good trader can easily average several hundred dollars per trading day (naturally depending on starting capital and if money is compounded or removed from the account). I also believe that currency trading allows accessibility to these type returns to the average person much more easily than the stock market, based on the initial account balance required alone. It is much easier to come up with $2500 for currency than tens of thousands for stocks (remember, you need a minimum $25K initial amount just to be registered as a daytrader for stocks/options)!!

My two pips worth...

Here are 3 good experiments.

1) would be to have $3000 of risk capital, but only using $1000 at a time.
Trade with a 50k lot for every $1000 and trade a volitile pair.
Don't do too much homework, just have a daily or weekly bias of long or short and only trade in your bias...aim for 40-60 pips per trade. refill account when empty

2)would be have $3000 of risk capital using $500 at a time. Trade small lots 10-25k for $500 and trade on a weekly basis....meaning this week I am long or short....take 1 trade and aim for a few hundred pips....no scalping. refill when empty

3)would be have $300 of risk capital and use the entire amount and trade 3 lots, 375k. Don't do much homework. Just take a view of the market and trade it and go boom or bust. IF you margin call, oh well...if you make 150-300 pips...great, just trade 3 lots for a month and see what happens. If you survive a month of profits, take away profits above 3000 and restart month. continue until you run out of money or retire


of course the cheap way is to demo this...but if you're trading with risk capital....you might as well lose it one of the 3 ways.....
overleverage
overleverage
overleverage

good luck!


sidenote--I'm not advocating any of the 3 ways as a trading system, I'm just making the point that if you want to gamble (yup I said it) here are 3 fun ways to do it and learn a little about yourself and trading.