What's a good monthly income from trading? | Forex Factory

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What's a good monthly income from trading?

  • #1
  • First Post: Jan 7, 2018 4:13am Jan 7, 2018 4:13am
I am aware that I'll get variety of different answers depending on the each individuals unique circumstance

for someone who's got a family of 4 to feed v single person, someone who lives in an expensive city, area v someone who lives in a place where living costs are relatively cheap.

But I was more interested in at which point, in the process of growing your account and keeping your DD relatively low do you stop at certain lot ? 5K, 10K, 20K or 50K and above ? Point at which where it becomes difficult to close your position at the same price ? probably that's going to be the answer for some ?

I was calculating some numbers, and as the acc grew I increased my lot size while still maintaining the DD at 10%, at some point I was at 10K a month but then I wanted 20K when I reached 20K I wanted 50K, 100K and 1mil greed has no boundaries at least for me in my mind I don't know what I would do if I am actually in that situation, but then again I'd like to stop at some point to reduce the additional stress of dealing with big $ and keep my consistent income every month. Which one are you ?
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  • #2
  • Jan 7, 2018 9:39am Jan 7, 2018 9:39am
Calculate your average monthly needs and curb your greed. Greed had no boundaries, unless you bound them. I presently live in the world most expensive countries, but that doesn't mean I have to be rich or to make a lot of money.

Regardless how rich you are, what ever goes into your stomach fill those what you need, those things which doesn't fill anything are just "luxuries"
The only winner is the one who survive the longest...
  • #3
  • Jan 7, 2018 10:21am Jan 7, 2018 10:21am
Think of the basic food on the table, pay the rent and bill level first. When you reach there, trade at that level for a long enough time that it's stable and you become thoroughly familiar and comfortable with. The next stage will come naturally to you. It's no use to think about it now.
  • #4
  • Jan 7, 2018 2:38pm Jan 7, 2018 2:38pm
Hi Piquant,
I think you've already hit the nail on the head by understanding it's such a personal question and guided by the individual's own psyche and needs (both material and ego).

As such, I can only answer for myself. For me, the absolute account size and trade position size is of no real importance, what matters more is the risk being assumed. It's the risk that causes the stress, not the money rolling in! And the risk is a function of both % of account risked per trade and the drawdown the account is likely to suffer under your method. I am very risk averse so I keep the per trade risk to 1% of the account and drawdown to under 10%. I could treble my income simply by risking 3% per trade (& 30% drawdown), but the additional risk is too much stress for me, so I don't. For others, that's a laughably small risk. To each his (or her) own, I guess.

In pure income terms, I trade my account for a living so I need to consistently earn a minimum sum to cover living expenses. I'm not willing to increase the assumed risk so the only way I can earn more is to increase my account size or get better at trading. Sadly, I can't rely on the latter so my income is essentially a function of my account size, my personal capitalisation. I simply did the maths backwards, working out how big an account I'd need to generate the cash returns I wanted on the risk I was willing to assume. Then I saved up that number and started trading with it.

This point is important: too small an account size makes earning a living amount in any kind of stable and risk acceptable way almost impossible. I think too many people dream way too big for their available resources. Be realistic and you'll probably be both happier and more successful in your trading.
  • #5
  • Jan 7, 2018 2:52pm Jan 7, 2018 2:52pm
Quoting Piquant
I am aware that I'll get variety of different answers depending on the each individuals unique circumstance for someone who's got a family of 4 to feed v single person, someone who lives in an expensive city, area v someone who lives in a place where living costs are relatively cheap. But I was more interested in at which point, in the process of growing your account and keeping your DD relatively low do you stop at certain lot ? 5K, 10K, 20K or 50K and above ? Point at which where it becomes difficult to close your position at the same price ?...

I have heard some traders don't recommend trading as a mean to pay month to month bills, as it puts a lot of negative pressure on your side and makes you lose focus on the important things. I think it would be best keep compunding until you no longer need to worry about making X gains on X period of time.
  • #6
  • Jan 7, 2018 3:42pm Jan 7, 2018 3:42pm
Quoting Abade
{quote} I have heard some traders don't recommend trading as a mean to pay month to month bills, as it puts a lot of negative pressure on your side and makes you lose focus on the important things. I think it would be best keep compunding until you no longer need to worry about making X gains on X period of time.
This is very true. Not all traders can make consistent monthly income from trading. They may be profitable, but especially if you hold your trades for a longer period of time, it could take months or even years to realize gains. All that to say, I agree. No target is the best target in my experience. Take what the market gives you.
  • #7
  • Jan 7, 2018 6:08pm Jan 7, 2018 6:08pm
Quoting kinspk
Calculate your average monthly needs and curb your greed. Greed had no boundaries, unless you bound them. I presently live in the world most expensive countries, but that doesn't mean I have to be rich or to make a lot of money. Regardless how rich you are, what ever goes into your stomach fill those what you need, those things which doesn't fill anything are just "luxuries"

How long did it take for you to average 10 k per month?

Are you a scalper?

Kind regards,

Goose
  • #8
  • Jan 7, 2018 6:16pm Jan 7, 2018 6:16pm
Quoting Madinvestor
{quote} This is very true. Not all traders can make consistent monthly income from trading. They may be profitable, but especially if you hold your trades for a longer period of time, it could take months or even years to realize gains. All that to say, I agree. No target is the best target in my experience. Take what the market gives you.
I think this applies more to swing/positional traders and for people trade longer TFs 12h and daily. With that kind of approach I absolutely agree with you on not having a set number to hit because we'll never guess it right, we take what we can get.

But I'm more focused on day trading and scalping an index, the method that I've devised usually requires me to hold the position for anywhere between 1 - 2hours and I do have a set number daily to hit, not exact 50 or 60pips but I keep the range in my mind. So I guess your expectation will differ based on your method and how you trade.
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  • #9
  • Jan 7, 2018 6:32pm Jan 7, 2018 6:32pm
Quoting marcmarc
what matters more is the risk being assumed. It's the risk that causes the stress, not the money rolling in!


Couldn't have said it better, you obviously "really" get this to sustain yourself with a consistent income month in and month out. I understand for some people who's got jobs and trading part time risking a little high is all fun and exciting but when you're doing it full time with bills to pay I assume its a whole another beast. I can only imagine the distress it will cause if you started taking risk that you can't afford in the name of more profit.

You mention that you keep your risk per trade 1% that means your daily DD is kept at 1% and max DD at 10% based on your method/system expectancy what are the chances of incurring say 5 losses in a row ? And how many consecutive losses would set you at max DD 10% ? what's the plan if you hit 10% ? During the process of calculating the DD and risk per trade I'm comfortable with probability of consecutive losers occurring in a certain sequence of trades came up, and I think this expectancy should be calculated with your best guess just to be sure not to over leverage over trade the account to max DD.
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  • #10
  • Jan 7, 2018 6:48pm Jan 7, 2018 6:48pm
Quoting goose4
{quote} How long did it take for you to average 10 k per month? Are you a scalper? Kind regards, Goose
I don't average 10k a month, not sure where you get this info. Yes, I'm a scalper but do hold trades for weeks too. For Equities, I hold for years.
The only winner is the one who survive the longest...
  • #11
  • Jan 7, 2018 6:53pm Jan 7, 2018 6:53pm
Quoting kinspk
{quote} I don't average 10k a month, not sure where you get this info. Yes, I'm a scalper but do hold trades for weeks too. For Equities, I hold for years.

Im sorry the question was for piquant .
  • #12
  • Jan 7, 2018 6:56pm Jan 7, 2018 6:56pm
My target is around 80-100 pips a month @ 4 trades on average ... Its monetary value depends on the lot-size ...
This kind of “growth-capability” was what enticed me into trading in the first place. When we can take in an average amount of pips in a consistent manner monthly, we’ll be putting the same efforts whether we are playing 1-lot or 10-lots ...
Start at a minimum lot-size (situational dependence), then use the “retained-earnings” and some kind of incremental method to trade bigger lot ...
Market is not random but unpredictable
  • #13
  • Jan 7, 2018 7:13pm Jan 7, 2018 7:13pm
Quoting kinspk
{quote} I don't average 10k a month, not sure where you get this info. Yes, I'm a scalper but do hold trades for weeks too. For Equities, I hold for years.
equities for years ?
which TF ?
don't think the risk is exponential on a retail acc ?
...
  • #14
  • Jan 7, 2018 7:18pm Jan 7, 2018 7:18pm
Quoting goose4
{quote} How long did it take for you to average 10 k per month? Are you a scalper? Kind regards, Goose
I don't make 10K a month, I was just calculating how far I could take my acc while maintaining the max DD at 10% and daily at 1.5%. You can do the calculation yourself with whatever amount you're comfortable with, set your max DD and daily DD from therein calculate how many trades you can take per day per week within your risk parameters , you have to have a method - if you know your expectancy you'll easily calculate the numbers. But then again numbers are numbers in reality it may or will at most come up different but at least we know what to expect that means we'll be prepared for the worst and for the best - and ways to avoid these 2 extreme polarities. Better be prepared than sorry.
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  • #15
  • Jan 7, 2018 7:20pm Jan 7, 2018 7:20pm
Quoting 4for4
My target is around 80-100 pips a month @ 4 trades on average ... Its monetary value depends on the lot-size ... This kind of “growth-capability” was what enticed me into trading in the first place. When we can take in an average amount of pips in a consistent manner monthly, we’ll be putting the same efforts whether we are playing 1-lot or 10-lots ... Start at a minimum lot-size (situational dependence), then use the “retained-earnings” and some kind of incremental method to trade bigger lot ...
that's how I kept increasing the acc. but greed never seem to know when to end. that's why I asked the question when do you stop ?
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  • #16
  • Jan 7, 2018 7:32pm Jan 7, 2018 7:32pm
Quoting Piquant
{quote} that's how I kept increasing the acc. but greed never seem to know when to end. that's why I asked the question when do you stop ?
When the average intake of the played lot-size exceeds our “maximum” financial needs, i.e., when we can still grow our saving account while maintaining our life-style ...
We can always trade bigger lot-size if there are additional needs, but please control our “wants” ...
(there’s always a limit to our needs, but the “wanting” is limit-less) ...
Market is not random but unpredictable
  • #17
  • Jan 7, 2018 7:57pm Jan 7, 2018 7:57pm
[quote=Piquant;10647295]I am aware that I'll get variety of different answers depending on the each individuals unique circumstance for someone who's got a family of 4 to feed v single person, someone who lives in an expensive city,

An interesting point. human greed makes no bounds.

If you had a business and it was successful , you would hire people to run it and let it expand. bringing in wealth.

Trading is slightly different.
You can either trade, week in, week out and make an income, to pay the mortgage/rent ,utilities,living expenses, car etc and put a bit to one side .as Trading is a business.

OR , you sound seem a competent trader, try trading a few compound trades and hit it hard.
The money you make then buy property and rent it out as i do.
If you do not trade you do not lose, trading is hard

i suppose you could always make some money then invest in equities,bonds or
commodities to get a better return.
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #18
  • Jan 7, 2018 8:45pm Jan 7, 2018 8:45pm
If you think in terms of monthly income, then that means you want to continue trading for infinite numbers of years (or until retirement) despite all the risk inherent in trading. For me, I want to stop trading when I can invest my trading profit into real estate or something that can earn for me even when I sleep.

That way, when I walk away from trading, I'd know i'd still be getting a monthly income even if I decide to bum out.
  • #19
  • Jan 7, 2018 9:05pm Jan 7, 2018 9:05pm
Quoting gameofpips
If you think in terms of monthly income, then that means you want to continue trading for infinite numbers of years (or until retirement) despite all the risk inherent in trading. For me, I want to stop trading when I can invest my trading profit into real estate or something that can earn for me even when I sleep. That way, when I walk away from trading, I'd know i'd still be getting a monthly income even if I decide to bum out.
I have yet met a person whom uses forex as an extra means of income. However earning what one would earn from a 9-5 would be a good start.
The Earth is flat!
  • #20
  • Jan 7, 2018 9:39pm Jan 7, 2018 9:39pm
How much do you have in your account and what the market will give you is your income..................

Some weeks can be zero, and some weeks can be $2500 or greater.......................

This is an open ended question.....................
The More You Learn, The More You Earn.....
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