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What's the average percentage a trader makes monthly

  • Post #1
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  • First Post: Jan 22, 2016 8:35am Jan 22, 2016 8:35am
Hello Pip killers,

I know this question is more like a cliche' , however I have noticed anytime the question pops up, I get to hear ridiculous answers as regarding % profitability.

I am wondering how much those a regular retail trader makes monthly, and I am referring to traders that actually trade for a living on a real account

Thank you
The majority of retail traders lose money in forex. So their monthly average percentage is negative. The only people who trade for living are bank and hedge fund traders and they are paid a salary. But I assume you mean retail traders who trade for a living - simple answer, there aren't any. If you want to make money in forex, go work for a bank, or sell indicators, expert advisors, books, or over-priced seminars because you won't make money actually trading.

PROOF That Forex is RANDOM - YouTube
Inserted Video
Quoting Lordpipi
Hello Pip killers, I know this question is more like a cliche' , however I have noticed anytime the question pops up, I get to hear ridiculous answers as regarding % profitability. I am wondering how much those a regular retail trader makes monthly, and I am referring to traders that actually trade for a living on a real account Thank you
Traders do not make a monthly income. If you are looking for that, find a wage earning job. You can, and will, have losing days, and weeks. If you are really unlucky and have a monthly doji, you might have a losing month.

Focus on process and managing your losses. The profits will take care of themselves.
If you are good at something, never do it for free--Joker
What percentage the average trader earns will vary greatly with market conditions, how "lucky" they get in that particular month and so forth. Based on a video I saw from an ex-bank trader who now trades for a living with his own capital, he was earning around 10% a month. This seems like a decent estimate since one of the top hedge fund forex traders (cannot remember her name now) earned a 110% return last year (something like $300 million).

But yes, as gravitist put it, most retail traders lose money. Very very few earn real returns. I believe the only way to actually make money in forex is to:

a) Only open trades in the same direction as the long term trends
b) Keep a constant watch on fundamentals
c) Remember that Techincal Analysis is a self fulfilling prophecy - therefore, only use tools that most other traders also use!
d) Short term charts are very random - only trade from 1H and upwards
e) Risk management is far more important than your system itself! Even with mediocre trades, you can be profitable if you cut losses quickly
f) Keep the leverage low

And remember - if you want to make a living from trading forex, you are gonna need a lot of capital - that's why very few people can live off of forex trading alone. Don't quit your day job.
Better to run, than curse the road
Quoting Lordpipi
Hello Pip killers, I know this question is more like a cliche' , however I have noticed anytime the question pops up, I get to hear ridiculous answers as regarding % profitability. I am wondering how much those a regular retail trader makes monthly, and I am referring to traders that actually trade for a living on a real account Thank you
On average, it's about 2% to 5% monthly. But having said that, some of the traders I know of can make as high as 10% to 20%. However, these high returns are not a monthly thing, but there are months that one can clock in such returns in the currency market.

The key in trading for a living is not just about your returns. It is also about having the sufficient capital, and how much you need to sustain your living expenses.

Conservatively, if you take 2% return per month, you will need at least $100,000 capital, giving you $2,000 for your monthly expense. Many traders go into 'trading for a living' without sufficient capital, thus over leveraging and eventually losing their account.
On average it will be ... oh wait, there is no average, at least not for traders as a whole. Your income chances will correlate with your risk acceptance and the number of trading opportunities your strategy creates.

I wonder why people come up with those questions at all, is it that hard to trade a while and then use a calculator to see what YOU can achieve? Oh btw, it is a lot easier to have higher percentages on small accounts. Comparing your return on small accounts with the returns of money managers and big investors is a complete waste of time unless you copy their strategies too (which is nothing I would ever do).

On another note: your chances of a more or less regular income will (of course) increase with your number of trades and the type of trades you take. What I mean is that a trader who lives of the usual ups and downs on a shorter time frame will have a much greater chance of a regular and solid financial income than someone who lives of that great once-a-month trade. Pure math and yet it's a groundbreaking discovery for some "traders" ...
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  • Edited 10:58pm Apr 6, 2016 9:51pm | Edited 10:58pm
Quoting Lordpipi
I am wondering how much those a regular retail trader makes monthly, and I am referring to traders that actually trade for a living on a real account
It is a bit like asking 'how long is a piece of string'. We have no verifiable track record for retail traders that can determine your query with any precision. Hearsay or intuition is not a reliable tool to determine your query with any voracity. It is a bit like asking the same question to the roulette participant. Over the short term (number of spins) returns can widely vary. Over the long to infinite term (number of spins), your return asymptotically approaches the negative return of the house edge.

We need to frame this question in terms of those traders who have traded a statistically valid sample of trades to arrive at a more rigorous result. For example the average return over say 1,000 trades has far more meaning than say the average profit a trader makes monthly as you have no estimate of the average number of trades taken over this chosen period. If you asked this question to those retail traders that have survived to tell the tale after 1,000 trades, they will tell you a different result than say a hobby trader with say 100 trades under their belt. In the same way, ask the question to those that have survived 10,000 trades and you will get a different response from those traders who have survived 1,000 trades.

We have verifiable returns from the professional fund management industry (excluding High Frequency Trading [HFT] funds) over the last 30-40 years with in excess of 10,000 trades per fund and the results suggest that (before fees) your average return will be in the order of a Compound Annual Growth rate of 15% and after fees a CAGR of 10%. Your monthly returns will vary dependent on your technique and lead to your distribution profile of returns. The remaining funds who have produced returns in excess of these results no longer survive to tell the tale........so given that these guys are well resourced, have teams of researchers at their disposal.....are experts in their field........I would suggest that a successful long term retail trader is going to under-perform these long term averages.

Below are the results of one of the best performing funds (long term) in the world with CAGR of 15.88% (after fees) which translates to CAGR of 18%-20% before fees (the expected result of a retail trader who achieved these returns). Have a look at the dispersion of the monthly returns.

Long term (say the potential max lifetime of a trader) an average monthly return of 1.5% - 2% would result in you outperforming the best of the best.

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I actually doubt if every forex trader makes a certain minimum amount of profit for a month. Earnings vary among forex traders as their trading experiences vary too. This is why we should always use the demo account first to learn before moving to live trading. As well the amount they are trading with vary too so their profits should vary too. That is why some traders prefer bonuses. With my broker Profiforex, I usually have from 50% to 500% of bonus on my deposit. I can trade with it as long as possible as the bonus doesn't expire.
I would love to see an official (as in, made by a statistics agency) survey giving the answer to that question. Traders' results vary widely, depending on how large their accounts are and how aggressive their trading approach is, if and when they are profitable to begin with.
Different traders make different percents, but if you are afraid of taking risks, then you'd better choose 6-10% per month. Although there are guys who make 500% per months. I have cooperated with such one once. Afterall, he's blown his account, but luckily I managed to take my money back before that. So risking can be useful sometimes. Risk is a generous thing.
Quoting Copernicus
{quote} It is a bit like asking 'how long is a piece of string'. We have no verifiable track record for retail traders that can determine your query with any precision. Hearsay or intuition is not a reliable tool to determine your query with any voracity. It is a bit like asking the same question to the roulette participant. Over the short term (number of spins) returns can widely vary. Over the long to infinite term (number of spins), your return asymptotically approaches the negative return of the house edge. We need to frame this question in...
Thank you for sharing. That should really put things into perspective for the newer traders. Those shooting for the moon will not survive in this business. I've seen people make 10-20% a month for a few months only to blow up and lose everything. Not saying it's impossible but I have never seen anyone with a verifiable track record making at least 10% a month consistently for at least 1 year (without employing any sort of martingale tricks - we all know the outcome of martingales).

In my opinion you are a trading god if you can average 2% per month consistently for years on end, while keeping drawdown within acceptable levels. Not many will find this easy to accept, because well, it's a measly... 2%.

Another thing I want to say is that you will not get rich from making a few percent per month unless you have already large funds to start with. But if you can achieve those figures then you will have no trouble attracting investors with big money... then you can make your living from THAT. Provide a valuable service to others and you will get compensated appropriately. It's a completely different mindset when trading is viewed from that angle.
Quoting loleno
{quote} Thank you for sharing. That should really put things into perspective for the newer traders. Those shooting for the moon will not survive in this business. I've seen people make 10-20% a month for a few months only to blow up and lose everything. Not saying it's impossible but I have never seen anyone with a verifiable track record making at least 10% a month consistently for at least 1 year (without employing any sort of martingale tricks - we all know the outcome of martingales). In my opinion you are a trading god if you can average 2%...

Spot on. Couldn't agree more. :-)
Quoting Lordpipi
Hello Pip killers, I know this question is more like a cliche' , however I have noticed anytime the question pops up, I get to hear ridiculous answers as regarding % profitability. I am wondering how much those a regular retail trader makes monthly, and I am referring to traders that actually trade for a living on a real account Thank you
To what do you need this info for?

IMO compering % monthly profits is just not useful.
Without tons of additional information, it just gives you false results and mental images.
Professionals make 2% to 5%
People who buy robots make 100% until they blow their accounts
Hard work and patience.
Quoting Q4x
until they blow their accounts
Or quit like me, grading enough pips

The point is many traders forget that in trading they spend two currencies (values) - money and time. We all lose in the long run - expectation of returns negative in the long enough run. With conservative risk management low lots but Frequent trades - you don't get an edge - just redistribute odds . I win (lose) big NOW using all my leverage and deposit, you win (lose) in the Long RUN - same amount like me (again from math point of view). But you spent TIME also what makes trading of that tight MM guys "unprofitable" comparing to us in some sense.
Ive made 20% in a month but not every month
i made 33 fold every month
I've been trading for about 5 years now and finally starting to be reasonably consistently profitable (14 out The last 17 months have been profitable). In the last twelve months I think my average return is about 9%. Obviously the return you make depends on how much as a % you risk per trade also your trade targets. I usually risk 1.5 % for a return of 1:1 1:2. Basically my first trade I aim for 1:1 then if correct 1:2 until I get one wrong then start back at 1:1.

I think it realistic to expect 7-10% per month, obviously the lower the target the lower the stress. I have done well recently but have found the stress of trying to meet personal targets tiring, especially when set too high. So it's really about finding a realistic balance that suits your personality and lifestyle.
Quoting Q4x
Professionals make 2% to 5% People who buy robots make 100% until they blow their accounts

EAs might be hard to trust if you are not a developer. However i prefer trading manually and try to hedge my forex trades using binary options trading which also assure payouts up to 88 %.
Quoting gravitist
The majority of retail traders lose money in forex. So their monthly average percentage is negative. The only people who trade for living are bank and hedge fund traders and they are paid a salary. But I assume you mean retail traders who trade for a living - simple answer, there aren't any. If you want to make money in forex, go work for a bank, or sell indicators, expert advisors, books, or over-priced seminars because you won't make money actually trading. PROOF That Forex is RANDOM - YouTube https://www.youtube.com/watch?v=EZdBzFcvwQY...
LOOOOOOOOOOOOL
Sorry to know you lost on forex , you really have no idea what is an edge.
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