Forex Profit... Im sorry but... (10% per month?)

I have to know the general opinion around here.

There is one trader here who firmly believes that its IMPOSSIBLE to make 10 percent month on forex.

And the best part... he says that lucky are the ones who can do it in one year.

He stated that, with 10 percent, soon a trader would own the world, but i tried to explain that at some point your money cant be leveraged so eventualy you will get less percentage despite continuing to make a lot.

What i mean is that.... Ok its not possible to win 10 percent forever, but its possible to win 10 percent for many years especially if you start with few, and you can do it as long as your money can be leveraged with the same margin it was at the beggining.

So... im not saying that its possible to make 700000000000000000 dolars because brokers CANT leverage that much.

If we invest without leverage we see that currencies have tiny variations, but hey, thats why leverage even lower ones are around.

PS: This guy is one of that forum Gurus that claim to be trading for over 13 years. I guess that with that 10 percent year he has only 3 times the beggining ammount. Ridiculous.

What do you all have to say?

He may be right, he may be wrong. The only way you will ever know whether or not you can do it, is if you try for yourself. So much for subletly. Give it a try if you like, what have you got to lose?

well for what it's worth I made 5.6% of my account balance today........

Believe me, i tried and thats why im so confused. I will not say that im winning like a vulcano but, i have made before that 10 percent in a matter of days, without even risking that much.

It can't be done every day of course, but, as the time goes and i learn more, i realize that there is times when the perfect setups really exist. Not only technically or fundamentally but Both together.

Examples of the Black Wednesday on cable are the proof that it can happen something that can make the price go one way 100 or at least 99% certain. There is few times that it happens in the course of the year, fewer in 1 month, but when IT happens and it does. 10 percent its the least you can do just in that golden days.

June 7th 2007. The market started to price in one hike, BoE hold... 300 pip drop. Even the ones who arrived hours later had the chance to short that market shock. I just dont understand how can be possible to battle hundreds of days, thousands of hours and only get 10 percent.

PS: yes Johnedoe its worth, because despite i dont want to start a bad sentiment here, i just think its annoying to be new, and see everyday guys saying that this is a waste of time because they are losers for decades.

I have a goal of kicking this kind of ppl out of here, and that helps.

If 10% can't be achieved, better put your money on a certain bond etc. That could better net you 12% or more with better luck. Why waste one's time on trading ?

If for 13 years, that can't be achieved, better stop trading ! He probably was waiting for the number 13 to end his carrer !

Is it 10% after your capital is being leverage? After a 20x leverage, it is close to impossible (as least to me) to make 10% (twice your capital) per month.

If is making 10% of your capital, I think many trader has done it before.

If you can make 1% per day you will make over 1000% per year.....

[ [/quote]

I had $124 left in an old mini account. Shorted 1 mini lot of USD/JPY yesterday at 123.44 and bought back today for 122.25. 119 pips or $94 or 74% increase in 24 hours. There is my 10% for the next 7 years. LOL

Of course this isn't proper MM and doesn't represent what I normally do with my everyday accounts.

Seriously though, I'm sure some traders achieve 10% per month, but I think a reasonable goal is somewhere between 10% per mo. and 10% per year. Pretty big window and very few in that 10% per month slot.

I agree with highway. If you can't do more than 10% per year you would be better off with a bond or mutual fund etc.

Hedge funds make 10% to 30% per year but they have billions to trade with. If you are trading a $10k account you need to make 25% per month just to get by and that means your account will never grow.

My account is quite large so for me 10% a year is a worthy goal but I aim for 100% per year.

On a $1 mil account 10% is $100k That is more than enough to lead a comfortable lifestyle. However realistically on a $1 mil account you want to make 40% to 50% per year to be able to grow it. When we begging to talk about very large accounts lets say $10 mil then 10% is a achievable and easy goal.

My guess is this person if he is telling the truth trades unleveraged if he is lying he has just read one too many e-books and he thinks that qualifies him as an expert.

If you are new and have a 10k account 10% per year is usless even if you live in a third world country.

I believe that it's very possible to make 10% month and even more.
For some experienced traders that have a great system, 10% a month would seem low.
It'll be hard to hit 10% each and every month, but you have to figure that some months if you're hot, you could make 15 or 20%. (obviously this all depends on the trader and method)
For ex., I had a great trade that I closed yesterday for about an 8% gain. So I'm pretty close to the 10% and quitting for the rest of the month if that was my goal.
But I'm shooting for 20 so I'll keep going.

Hey you can quit for the entire year if you listen to some ppl in the forum.

I put this one on my signature, i hope you dont mind.





PS: I resolved to edit here to avoid another post.

Merlin did you read what i said about leverage. Multi Million Dolar ammounts cannot be leveraged and thats the reason the biggest investors dont make 10 percent.

I dont mean to criticize but how hard is that to understand?

btw i cant be sure, but i think ive seen somewhere on the internet results of that usual forex competitions and they talk about % in hundreds values by the end of the year.

And another thing, ive been told that the stock market grows by 8% average every year, and that can be achieved just by letting the money there. (not trading every day)

here is a direct way to answer this question....

calculate the annual gain of 10% monthly. then compare that to the best hedgefunds.

is it possible? of course. likely? hmmm...

10/261 = 0.0383 % a day
261 = assumed a year without weekend
the problem is consistency



if it can't be leveraged, 1 pip in Gbp-usd = 0.01 cent, a 100 pip is already 1 cent = 0.5% profit ..... i do don't understand

I agree with that. If you trade such a risky market as forex then you have to expect higher profits. RISK:REWARD does not allow us that.If risk is great we expect even greater results.... My goal is 10% per month

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Plan your trade and trade your plan

2 days into the month and I am up 6.85% ..... of course there is a lot of month left...anything can happen

It's all about market liquidity and leverage. Could the multibillion dollar hedge funds make more than 20-30% per year? Probably not. Could those same exact hedge funds make 20-30% per month if they only had $10-100k*? Probably so. When your account compounds to a point where you can not safely enter and exit the market because there is not enough traders to take the other side, then you've hit a liquidity ceiling and your equity curve goes from exponential to linear.

When I was into day trading stocks, the general rule was do not trade more than 1,000th of the stock's avg daily volume at any given time because of liquidity problems. So, for example, if XYZ's 50 day MA of volume was 25 million, I wouldn't trade more than 25,000 shares in XYZ. A better measure is to look at an open book (level 2 quotes) and make a guess at what the avg volume size is for the nearest bid/ask, and limit your trade size to that number. While this is easy to see in stocks and commodities, this information is only available with an ECN broker in FOREX.


* I'm assuming that most hedge funds trade futures/equity options. Even with such "lower leverage" instruments, it's still possible to make this amount per month if you have enough money not to go broke, but not too much to break the liquidity barrier of the market. The famous Turtle traders sometimes had months where they doubled (100% return) their account size using commodities.

It's all about consistency and sticking to the rules of your system. I can swing for the fences today and make 10%, but I could also lose just as much. As long as you're making steady forward progress, be it .03% a day or whatnot, you'll end up with double digit figures in no time.

The leverage in forex is so high it facilitates rapid growth (and rapid loss).

bluebuddha thats quality posting.

The Key!

Exponential to Linear but not preventing to be exponential for years.

Gwan its not 10/261 but the 261st root of 1.1 ~ 1.000365... = 0.0365 %

In other words 1.000365... ^ 261 ~ 1.1 = 10%

Its close to your number but this is the right way.

In your way, you are assuming that you earn every day a percentage based allways on the first ammount. My way i assume that the percentage rising will allways take into consideration the actual ammount.

Imagine that you invest 1 billion (without leverage) long on Eur/Usd at 1.3600 and it rises 50 pips.

Your gain is 1 000 000 000 * 0.0050 = 5 000 000 = 0.5%

By the end of the month we must consider that 200 pip its a good average, so big companies, are limited to 1, 2, 3 percent month. But if 50 pips can equal 5% gain you do the math by the end of the month.

With 10 000 dolars yes it can. With 1 billion no it cant. How easy is that?

Exactly and thats the point. You might be wrong and lose everything but, the question here is when you are right (in a consistent way), what happens.

Many ppl say, hey we have got to be consistent to achieve that. But that consistency is a certain fact on this discussion.

Apart from the classic 3M (mind,method,money) required in trading .... you also need to trade the right market to make money. The market that you trade must be
1) volatile to some extend (both trending and/or ranging)
2) liquid
As your fund grows to certain level, you will face liquidity problem when there isn't enough willing trader on the other side. That's probably why hedge funds don't make 100% returns like how good private traders do.

On the side note, ...I trade less frequently but each of my successful trades increase my account by 10-30%.

Here's an excerpt from a chat with my mentor from a few years ago. He worked at Tudor Investments for five years.

Mike: That culture of discretion was rampant throughout the systems group which consistently lost money. Pete was finally ousted in 96.
Bob: The human race succeeds in spite of itself
Mike: exactly, and even the "succeeds" part is questionable.
Bob: wasn't that Trader doc from PBS?
Mike: yea
Bob: I'm looking at their site right now
Bob: What's the actual name of it?
Mike: I'm sure you can get it at Trader's Press
Mike: "Trader"
Mike: It was made in 86 when Paul was 32 and before he hit the big, big time with his calling the crash to the day.
Bob: Did he make money on it?
Mike: lol, he made 62% that day
Bob: nice
Mike: on 200mn dollars
Bob: That's a good week's pay
Mike: Paul started the fund in 84 and his returns for the first few years were like, 200%, 160%, 500%, 99%, 140%, 95%
Bob: 500%?
Mike: I can't remember the compounded returns but it was insane
Mike: yea, he was a maniac
Bob: was it his money?
Mike: a total fucking cowboy
Mike: his and his investors
Bob: You ever hear of Ryan Jones?
Mike: no
Mike: sounds like a piker
Mike: lol
Bob: He wrote a book about trading
Bob: lots of folks read it
Mike: what's the name
Bob: but his math sucked
Bob: rofl
Bob: a real problem because the book was about money management
Mike: What was the name of the book?
Bob: The Trading Game
Bob: but the one thing he said that made sense was this
Mike: Christ these fucking people who write books
Bob: that in the beginning, you should risk more because you have less to lose. Take chances and scale back if you start to win. Is that what Paul did?
Mike: lol. No the exact opposite
Bob: But 500% is taking huge risks, no?
Mike: What he is speaking of is a bastardization of utility theory
Mike: Yes, but he only got aggressive once he made some money.
Bob: I see
Bob: what do you think of that?
Mike: of what?
Bob: the way Paul did it?
Mike: It's the right way to do it.
Bob: really? You strike me as being very conservative
Mike: I'm not sure what time frame that guy is talking about.
Bob: months
Bob: maybe a year
Mike: but is he talking about an individual trade or about the p&l of your account?
Bob: the account
Mike: then his thinking is all wrong
Bob: which could explain why a lot of the retail traders like his book
Mike: It sounds like he is applying utility theory in a bad way.


Mike: Utility theory can be described like this:
Mike: Let's say I offered you a bet where you could flip a coin and I'd pay you 1$ on a 50 cent bet. Make it 75 cents. So while the odds are 50% of winning, the pay off is 150%
you'd be insane not to take that bet. Right?

Now let's say I agreed to pay 75% on a coin flip but said that you had to bet your entire net worth. Utility theory would say that while the expected value is positive, the best doesn't make sense because the utility of that amount of money is just too high.
So the idea makes sense if when you start trading with 10k and risk 10% per trade because 10k might not be a lot of money to you. But to risk 10% a trade with a significant portion of your net worth is stupid. But this concept doesn't apply to individual trades. Quite the opposite in fact. You want to leverage up when you’re making money and vice versa.

You can probably see I have quite a bit of disdain for popular writers of trading books. Like that fucking guy, that doctor, what the fuck is his name, "Come into my Trading Room (and watch me write a book)" – Elder

I do it on a scale, for instance at Tudor I would say that a unit size was maybe .25% vol if I was between 0-2.5%

.5% if I was >2.5<7.5

So my %Vol would increase as I go up and decrease as I drawdown.
Mike: I just can't believe the shit I read in those books.
Bob: yea, it's almost criminal
Mike: I can't believe the shit I read these alleged market strategists say.
Mike: I can't believe there is any serious trader who would look at fucking stochastics
Mike: why would you attempt to objectify that aspect of market information with the greatest nuance.
Bob: Because you don't know any better
Bob: That's pretty difficult stuff, you know
Mike: People just don't want to think. They just want their anxieties allayed.
Mike: funny you say I'm a conservative trader. I am far, far from it.
Bob: would careful be more accurate?
Mike: I had to trade to make 20-25% because that's what the firm wanted.
Mike: Unfortunately, no.
Mike: lol
Bob: lol
Mike: I wish
Bob: their concern was more about drawdowns?
Mike: yea
Bob: makes sense to me
Mike: It's what the customer wanted.
Mike: Think about it, 25% a year is a lot.
Mike: to still be an A rated bond
Mike: It wasn't just me though. The whole industry is like that.
Mike: You end up with a jaundiced view of your fellow man though.


Once PTJ got his capital to a certain point, and got the large investors he wanted, he only targeted 30% pa. What some people seem to forget is that big money's number one concern is safety, or keeping their money. Their second concern is beating inflation. It is their third concern to compound it. Individual traders can take larger drawdowns, while funds can't. Stories abound of funds that have just kicked ass, hit one drawdown that a bit large and lost most of their customers.

Making 10% a month is easy, but I do have to agree that doing it month after month is difficult for a number of reasons. Ultimately, it's really the yearly return that matters. I had 2 losing months, two breakeven months, plus 6 weeks of vacation time last year. Yet November more than made up for all of them and then some. That's just the way it goes.