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20% per month. Is this possible?

  • Post #1
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  • First Post: Sep 20, 2007 8:19pm Sep 20, 2007 8:19pm
I am not so new to forex, but I would like to know if any professional traders have been able to consistently pull off 20% a month, at least uptil a $100,000 account. Is this possible? I am trying to figure out what my target should be monthly for my return on capital and what figures are realistic.
anything is possible, the question is what is possible with YOU?
Quoting Bluehills
anything is possible, the question is what is possible with YOU?
Yes you are right but I would like some realistic return figures.
Possible? Yes. Probable? No.

No one can really give you a figure because every person and every trading system is different.
There is no way anyone could give you an accurate number without knowing what you do. Only you can figure that out.
Over what time frame? Is it 20% this month, and then -20% next mth, or is it average of 20% per mth over 1 yr? Too many variables.

The beauty of forex is that ANYTHING IS POSSIBLE. There is a thread on here somewhere with the title about what ppl aim for as a return (mthly or annual). Some very very respected ppl have posted in that thread. I suggest you read that.

The aim should be profitable in the long run, and preservation of capital to be able to trade another day.

Regards,
K.
Quoting Xenaga03
...I am trying to figure out what my target should be monthly for my return on capital and what figures are realistic.
POSITIVE.

{Target was the question}.
I would suspect no.

Not that it's not possible this month, or even next.....just that you have things like a carry trade "correction" of a few hundred pips an hour. Assuming you were a carry trader, and would have been making buku dinero over the last few years, that alone would ensure a few bad months.

Besides, I think the road to riches is paved with a lot of patience. That is not to say that you cannot make 1,000 pips on a trade, but that sometimes.....correction, A LOT OF the TIME, this market is just banging around.

Work out a spreadsheet on this. Try taking your balance and gaining 2% every week. That in itself will surprise you. Or better yet, try something really modest, 1%. Still, with compound interest, it adds up.

I think the problem with most forex traders is that they see this market as different than the stock market, which is true. But, they focus on the wrong difference - returns. While it is true your CAD/JPY trade may bring that balance up 8% this week, it could just as easily do the opposite.

The part too many don't equate to stocks, much like stocks, currencies go up and down as well. The difference here is you are losing 8-10 bucks a pip, which in the big picture, a pip is almost nothing. It's not going to make that six pack of Labbatt's cost that much more, for example.

But if you get stopped out at 150 pips, that is something you are going to feel. Hopefully you will have enough to afford that previously mentioned six pack.


Clockwork71
unrealistic returns = unrealistic business/drugs = illegal activity and/or scam
100% of traders are losers. Just that some win more than they lose!
Quoting Xenaga03
I am not so new to forex, but I would like to know if any professional traders have been able to consistently pull off 20% a month, at least uptil a $100,000 account. Is this possible? I am trying to figure out what my target should be monthly for my return on capital and what figures are realistic.
I think a lot of people simply miss a point: Your system determines how much you will make.

To answer your question, 20% a month is possible and probable if you use a system that can give you these returns with whatever risk you are willing to take (there are a lot of systems out there that can do that btw.).

Another point that is crucial is: How much do you risk (money management is the key as demark says ). 0.5% risk per trade vs 3% risk makes a huge difference.

[Generally speaking systems that trade a shorter timeframe generate more return than systems with longer timeframes (H4 vs M1 for instance).]

As I said, it is possible and porbable to average 20% a month return on bigger accounts, but to really answer your question you should simply tell us a little bit more about your system and money management.


btw @ demark: I really like your signature! Only good information in there
Hi Xenaga03

I think the answer depends on system expectancy, and one's personal tolerance for risk. With leverage and a compounding MM system, almost anything is possible. At least that is the mathematical answer.

Everything else being equal, return and risk are both directly proportional to position size. 20% per month might well be attainable, if one is prepared to size positions to take on the necessary risk, i.e. where bad months will result in sizable drawdowns, and the real possibility of wipeout. Vendors promote their systems by quoting return, but the true measure of system efficiency is dollars (or percent) gained for each dollar placed at risk.

So is 20% per month, every month, realistically possible? I doubt it. Why? Compounding 20% per month equates to around 800% annual return, i.e. we could turn $5k into $10.5m in 3.5 years, and into $2.5b in 6 years. It would certainly be interesting to know if any of the top traders here achieve anything remotely close to this. I suspect there's a world of difference between theory and reality, especially when the numbers get large: from the standpoints of both liquidity, and maintaining discipline as one's personal comfort levels are stretched.

David
Well 20% can be attainable I think with good money management. Not just saying this is my risk this my reward and sticking with it but figuring out the best way to build your money.

Compounding is a way to beat the xx% per month per say. Not just straight compounding where you take all profit and reinvest because then you could have 11 months of positive returns and then in your last month lose it(depending on what you risk) Its about finding a great MM for YOUR strategy. Not just a google search for it. I have a fascination with compounding and investing. I may sound like a broken record with a lot of the posts I have including this one but I really listen to the people who are successful.

As an example to illustrate what im saying lets say you have two traders. They both trade all at the same time with the same gain/loss of pips(just an illustration)and they both have the same exact size account.Exception to this is they use different risk, reward and reinvestment strategies. One can come significantly ahead of the other one. So one can have lets say 10% and the other could have 30%. Then if the trader with 30% took the 20% and tucked it away and then used the 10% extra to reinvest with his same strategy he gets a free month in essence right there.

This is really a broad example but to get an idea of what I said look at your trades for last month and then put in some different ways of reinvestment as far as the idea of compounding is. I hate math but I love crunching numbers and looking at all kinds of scenarios. If you think solely gaining pips is the only part of this game you are missing out on some missed opportunity.

So if you are someone who loves to backtest try giving a new money management strategy a back test. I cant tell you what that is. Invest in yourself in this business before you invest in it.
Excuses are the tools of incompetence
Quoting hanover
Hi Xenaga03

I think the answer depends on system expectancy, and one's personal tolerance for risk. With leverage and a compounding MM system, almost anything is possible. At least that is the mathematical answer.

Everything else being equal, return and risk are both directly proportional to position size. 20% per month might well be attainable, if one is prepared to size positions to take on the necessary risk, i.e. where bad months will result in sizable drawdowns, and the real possibility of wipeout. Vendors promote their systems by quoting return, but the true measure of system efficiency is dollars (or percent) gained for each dollar placed at risk.

So is 20% per month, every month, realistically possible? I doubt it. Why? Compounding 20% per month equates to around 800% annual return, i.e. we could turn $5k into $10.5m in 3.5 years, and into $2.5b in 6 years. It would certainly be interesting to know if any of the top traders here achieve anything remotely close to this. I suspect there's a world of difference between theory and reality, especially when the numbers get large: from the standpoints of both liquidity, and maintaining discipline as one's personal comfort levels are stretched.

David
You are right, the bigger the account gets the harder it is to maintain your ROI.

But the question asked for accounts in the size of 100k$. With 100k$ it IS possible and probable to get 20% each month on average. (assuming you spend your earning each month obv.)
Quoting Canyouseeme
You are right, the bigger the account gets the harder it is to maintain your ROI.

But the question asked for accounts in the size of 100k$. With 100k$ it IS possible and probable to get 20% each month on average. (assuming you spend your earning each month obv.)
Yes I was asking if it was possible upto $100k. I was reading one of the Market wizards book and some of the traders have taken their personal accounts of a couple of thousand dollars and turned it into over $100k in a couple of years. One or two of them ended up blowing it and starting all over but I noticed that the gains diminished after the 100k point.
Also, Larry Williams have turned $10k to $1 million in 1 year...
His daughter did the same afterwards, and two people are able to do it so it is learnable.

I know that I am no supertrader, but one can still hope

I know Im going to get hammered for this, but I am risking 5% on each trade ($1k per mini). But on a winning streak, I might up it and add positions, and on a losing streak(cold spells), I reduce my position size so I lose as little as possible. BTW, trading on 4h/daily charts.
I make 1-5% per month, but only with a small account (~$10,000) risking 2% per trade. I think that's a likely ammount, don't know what others make.

Regards - Xaron
  • Post #15
  • Quote
  • Edited Sep 23, 2007 12:38am Sep 22, 2007 3:41pm | Edited Sep 23, 2007 12:38am
  •  mld
  • | Joined Sep 2007 | Status: Pips Raining Cats & Dogs | 85 Posts
Hi everyone
my first post, glad to be a part of FF community!
Xenaga03
This is the largest financial market, simply by knowing this returns are unpredicted at a daily, weekly and monthly cycle, do not spot for a percent but such a (high) return is surely achievable as this is the most volatile market.
mld
Quoting Xenaga03
Yes I was asking if it was possible upto $100k. I was reading one of the Market wizards book and some of the traders have taken their personal accounts of a couple of thousand dollars and turned it into over $100k in a couple of years. One or two of them ended up blowing it and starting all over but I noticed that the gains diminished after the 100k point.
Also, Larry Williams have turned $10k to $1 million in 1 year...
His daughter did the same afterwards, and two people are able to do it so it is learnable.

I know that I am no supertrader, but one can still hope

I know Im going to get hammered for this, but I am risking 5% on each trade ($1k per mini). But on a winning streak, I might up it and add positions, and on a losing streak(cold spells), I reduce my position size so I lose as little as possible. BTW, trading on 4h/daily charts.
Risking 5% can be entirely fine as long as you use a very high accuracy system.
I still don't really know what system you use but I think from what you've said, that even if you risk 2-3% on each trade, 20% a month is a good goal (knife & vegas have similar numbers i think).
I would focus on increasing your win/loss ratio. Instead of counting the money you have not won to spend on the beach.
To your question it is possible, but likely you will exceed the theoretical 2-5% risk. Measure the risk yourself.
Your question is more like "can I make 1% a day"?

I certainly think this is possible.
of course anything is possible. It's "possible" to even make 1000% in a month. But all that really doesn't matter because the true question is.....is it realistically possible? Everyone has bad months, the best, the worst, the mediocre. If you try to think about making 20% per month each and every month, you will drive yourself crazy because you WILL have bad times. In my opinion, I think it's best to have yearly goals instead of basing it monthly.

But to answer your question again, yes it is "possible" but not easy. Remember, it's also possible that you can lose 20% per month.
Drop the target.... it will cause you to over trade or let an opportunity goes away....

should you keep record of daily progress it is not to be chased.....

oh and yes, it is even possible to have 10% in 1 day, but again, it is not to be chased, it is a market given opportunity.
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