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Realistic Monthly Trading Profit?

  • #61
  • Edited 5:41pm Mar 12, 2018 3:07pm | Edited 5:41pm
Quoting ForexAuthor
Hey guys, Its been almost 20 days since I've been trading and I was wondering what would be a realistic/ideal monthly percentage profit? Cheers.
Hi,
It all rather depends on what kind of risk you are assuming and the nature of your system.

If you risk 1% of the account per trade you wouldn't expect 50% profit per month, neither would you expect large drawdowns. However, risk 20% of the account per trade and +/-50% is nothing special.

Equally, a tight, high frequency scalping method would look to generate smaller but far more consistent monthly returns than a big trend following system which might have months of moderate drawdown with the occasional monster winner month that pays it all back and handsomely more.
  • #62
  • Mar 21, 2018 2:52am Mar 21, 2018 2:52am
Quoting marcmarc
{quote}If you risk 1% of the account per trade you wouldn't expect 50% profit per month,
Can you please elaborate this line, please? I am really interested to know your logic.
  • #63
  • Edited 4:58am Mar 21, 2018 4:45am | Edited 4:58am
Quoting GeorgeBaile
{quote} Can you please elaborate this line, please? I am really interested to know your logic.
Hi,
The logic lies in basic maths and the fact that markets are inherently uncertain. To elaborate a little with an example:

If I only risk 1% of my account on a trade and take a 1:1 return:risk on each trade I'd need a net 50 winning trades to achieve 50% return in a month, somewhat unlikely. If I took a 5:1 R:R on each trade I'd only need a net 10 trades but what is the chance of 10 net 5:1 trades in a month? Again, pretty unlikely.

Now let's risk 25% of my account on each trade. At 1:1 R:R I only need 2 net winning trades to make my 50% in the month. This is very achievable. I don't need to go anywhere near a 5:1 R:R, just 1 net winning trades at 2:1 R:R gets me there.

Sadly, there is a catch. The rub is that risk cuts both ways. If I have just 2 net losing trades at 1:1 when risking 25% per trade, my account has halved. My chances of recovery from there are slim, I now need to double the account just to get back to where I started. And imagine how I'm feeling when fully half my cash has disappeared in short order. If I risk only 1% per trade, the same scenario is down just 2%, a very much less stressful position and an easy recovery.

Obviously, if I had the gift of perfect prediction I'd be putting on 100% of my account per trade. Unfortunately, trading is an inherently risky and uncertain business, anything can happen and everyone gets losing sequences of trades. It is inevitable and part of the reality of trading. You must be able to survive these and risking too much per trade is a certain way of ensuring you will not make it.

Hope that helps.
  • #64
  • Apr 2, 2018 3:31pm Apr 2, 2018 3:31pm
If you only care about getting profits every month, you will blow up your account eventually.
'For the market to work, it needs people who think that they can beat it.'
  • #65
  • Apr 3, 2018 3:40am Apr 3, 2018 3:40am
Quoting AlastorFate
If you only care about getting profits every month, you will blow up your account eventually.
And what will happen if you don't care to make profit?
Your statement imply then one won't blow up account - eventually- ?

Would one care more about what then?
Fancy candle formations?
"Proper" risk settings of losing 1% a time, as long as the account last?
Picking favorable R:R trades that pleases others but rarely hit TP?

Not a little confused.
Eventually, at some point, admitting or not, trading is becoming business, and as such, is about 'getting profits' aka making money!

Not even one demo contest was set up ( yet?) looking to reward the nicest chart colour combination, the best looking harmonic pattern found, or the lowest spread fought on USDZAR on a Monday morning.
But, maybe those to come too.

In the meantime, I am one who feels that making profit is the ultimate goal in trading.
The beauty is, that our opinions can exist side-by-side, no right or wrong really.
there is always, always another trade!!
  • #66
  • Apr 3, 2018 4:41am Apr 3, 2018 4:41am
Quoting profitfarmer
{quote} And what will happen if you don't care to make profit? Your statement imply then one won't blow up account - eventually- ? Would one care more about what then? Fancy candle formations? "Proper" risk settings of losing 1% a time, as long as the account last? Picking favorable R:R trades that pleases others but rarely hit TP? Not a little confused. Eventually, at some point, admitting or not, trading is becoming business, and as such, is about 'getting profits' aka making money! Not even one demo contest was set up ( yet?) looking...
Profits(and losses) are related to money.

Associating monetary gain/loss to trading, might gives rise to emotions/behaviours that are detrimental to optimal trading - over confidence, greed, fear, anger, emotional trading, revenge trading, averaging down, martingale trading, breaking rules...
'For the market to work, it needs people who think that they can beat it.'
  • #67
  • Apr 3, 2018 10:35am Apr 3, 2018 10:35am
Quoting profitfarmer
{quote} And what will happen if you don't care to make profit? Your statement imply then one won't blow up account - eventually- ? Would one care more about what then? .
//-----

hey profitfarmer..... that might not be what he is implying..... he might mean there must be additional concerns..... some of which might temporarily put profit on the back burner....

it has always amazed me how the very things so many forexfactory members/traders care so adamently about, concern me the least.... the concepts that bring out the most heated arguments here on trading, never enter my mind.....

what concerns me the most is being on the right side of the trend...... second is realistic lot size relative to account balance.....

there will always be times that your rules, while being 100% right, might place a trade that gets whacked because of some unforeseen non-technical occurrence..... like some news flash..... at those times, the realistic lot size keeps the damage in line......h
to trade and code, keep both simple... no call to impress....h
  • #68
  • Apr 3, 2018 10:56am Apr 3, 2018 10:56am
Quoting ForexAuthor
Hey guys, Its been almost 20 days since I've been trading and I was wondering what would be a realistic/ideal monthly percentage profit? Cheers.
I seem, it depends on traders trading performance; like if you are making 5% regularly then 5% is realistic profit for you.
  • #69
  • Apr 3, 2018 11:44am Apr 3, 2018 11:44am
10% per month if u catch every trend is achievable better use 1 chart for it
risk 1% every trade
use MA to enter
thats an example of the most basic method of whats possible or not

why don't u just back test your system?, thats the quickest way, you know it depends on whats possible for your system
  • #70
  • Apr 10, 2018 2:18pm Apr 10, 2018 2:18pm
Quoting Tardigrade
-100%
It’s the traders who go for live trading without completing their task on demo!
  • #71
  • Apr 10, 2018 6:59pm Apr 10, 2018 6:59pm
It all depends on traders/investors risk tolerance. If you are willing to risk more, then your profits should be higher. If your max acceptable DD is 20%, then your monthly average should be around 5%.
  • #72
  • Apr 11, 2018 1:31pm Apr 11, 2018 1:31pm
Quoting ForexAuthor
Hey guys, Its been almost 20 days since I've been trading and I was wondering what would be a realistic/ideal monthly percentage profit? Cheers.
Avoid using percentages because that's where the pressure is coming from. Set yourself a specific money per month. E.g; $20 000 every month
  • #73
  • Edited 9:13pm Apr 13, 2018 9:01pm | Edited 9:13pm
0.5% to 2% with proper money management is a realistic target. You will have months you lose and months you win. You have to be realistic about goals. People who say they hit double digit % consistently are not being fully truthful. Think about it for a second. Even a modest 5% ROI per month is 79.5% a year. The top 40 performing hedge funds on the planet averaged a Yearly ROI of 37% in 2017.

I'm sorry to say but I highly doubt any 1 single retail trader is going to outperform a company built around trading that get the best and brightest annalists and coders from around the world. Even if you take my high of 2% monthly ROI is 26.8% Yearly which is an amazing amount to hit consistently. Now i am not saying nobody can do it, but lets be real, if it was that easy, we would all be rich.

- Ric
Be humble or get humbled
  • #74
  • Apr 13, 2018 9:10pm Apr 13, 2018 9:10pm
Quoting Guufuj
{quote} Avoid using percentages because that's where the pressure is coming from. Set yourself a specific money per month. E.g; $20 000 every month
I have to disagree with you. A return of % is a better way to calculate over a dollar amount. The pressure comes from having to meet that dollar goal. If you can get an average %, the dollars will come with that. Do you even know how much you would have to have in your account to hit that 20K? Lets say you have an average of 5% ROI a month, that means you would need $400,000 in your trading account. Even if you return 20% a month, good luck with that, you would need $100,000.

Doing it % and compounding over time while adding funds to your account when you can is path to success. Of course you will still need an edge and a money management plan, discipline, etc....

-Ric
Be humble or get humbled
  • #75
  • Apr 13, 2018 11:41pm Apr 13, 2018 11:41pm
My target is 3-4% monthly, 50% yearly with low DD (so far about 3.5% max). Even 10% monthly on average is possible but one has to expect larger DD.
  • #76
  • Apr 19, 2018 12:46am Apr 19, 2018 12:46am
Here is the advice: Right click at mt4/mt5 Trade tab---> Profit ---> As points and stop aiming for profit goals that will cloud your judgement.
  • #77
  • Apr 19, 2018 5:32am Apr 19, 2018 5:32am
Quoting w00d1s
Here is the advice: Right click at mt4/mt5 Trade tab---> Profit ---> As points and stop aiming for profit goals that will cloud your judgement.
3-4% is a decent monthly target, I am also using this kind of low target in my trading, since I got 5% monthly return (in average) in my demo. I know my trading ability & restrictions as well.
  • #78
  • Apr 23, 2018 3:24am Apr 23, 2018 3:24am
Quoting DarrenLehma
{quote} 3-4% is a decent monthly target, I am also using this kind of low target in my trading, since I got 5% monthly return (in average) in my demo. I know my trading ability & restrictions as well.

If you talk about monthly target in a vacuum, especially if the target is low, it doesnt have a lot to do with your trading ability. 2 traders can be making 4% monthly on average each but one could be doing it with 10% max DD and the other with 30% max DD. That is the difference.

Telling us about your monthly profit without also explaining your risk tolerance means almost nothing. I could be doing 15-20% per month consistently (and I am on some accounts) but it doesnt tell you much since you dont know about my max DD.

A good trader in my book is the one who can consistently make 5% on average with a 10% max DD. Of course you can use different risk factors but the ratio between avg monthly profit vs max DD should be about 1:2. Of course there are other things that need to be evaluated but for me this is the most telling parameter.
  • #79
  • Apr 23, 2018 7:12am Apr 23, 2018 7:12am
IMHO targets are stupid unless they are super easy.

If Bitcoin goes back to 20k, I'll probably make 30%+ in a month, if it doesn't go anywhere I'll probably make 3%. There is no "right amount" - the markets move and your strategies will allow you a certain amount.

You get what you get, and that's what you got.

If I was trying to get a specific amount every month, then surely it would have some negative consequences on those harder months.
  • #80
  • Apr 23, 2018 8:38am Apr 23, 2018 8:38am
Quoting DemoAntares
You absolutely, as a new trader (even if you're experienced), have to remove your mindset from real money/percentage targets. It is dangerous, and you will fail very likely. Think of your account as an entity which doesn't like being told/suggested what to do - instead, think of it as an entity which will do what it can WHEN the opportunity presents itself. Since market is a live beast, if you set a real monthly/weekly or any other goal, you may not be in the opportunity to get it that month/week etc - therefore you will inadvertently change your...
Interesting, From the beginning of this year, I started setting myself monthly and quarterly goals for the first time and I have been more consistently profitable % wise than ever before.
In fact, I have reached my 2nd quarter goal already.
Goals have helped me keep focus, manage my money (risk) more prudently, and given me direction month on month.
I had a very small losing month last quarter, but I was not discouraged as I became focussed on my quarterly goal.
Come with me if you want to live....
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