$100 to $100K in 1 year...

You want to be a full time trader, yes? You want to be free from the daily grind of your current job, you want to have the money to do what you want and the time to enjoy it. You’re a good person and you want to help your spouse, your children, your grand-children and the poor kids on TV. This is the dream we are all sold with trading, especially if we are coming to it from a career outside of the financial world; “Work just a few minutes a day and then live life to its absolute fullest.”

Now let’s go back to our universal test: “Is anyone actually doing it”. This is going to be harder to quantify because we don’t have the numbers right in front of us. Meaning we don’t have statistically significant data to support or debunk the theory, and that’s a problem. Why? Well it’s a problem because if we don’t have hard numbers we have to rely on common sense, but that is easily swayed when what we want to “believe” is positioned in front of us as fact.

How many 4xMadeEasy type commercials have we seen, how many books have we read and how many advertisers and threads have we encountered that all go to great lengths to support the belief. “It’s easy, this is all you have to do, and if you do it you can be financially free”. Who doesn’t want to believe that…? It’s our human nature to want to be released from the hardships of life, and if this book, or person on this commercial, or personality on this board says its so, then I’m going to trust them, because it fits what I want to believe.

So back to the question: “Is anyone doing it?” Is anyone living that care-free lifestyle as a result of their efforts from trading? I’m certain the answer is yes. It’s like asking if Doctors or Lawyers who are the best in their fields are living on the higher end of society. Most certainly; are all doctors and lawyers living that lifestyle? Most certainly not. Are most of the Doctors and Lawyers you know living in the poor house; of course not. Do they work a lot of hours; absolutely? Did they have to struggle through years and years of education and then practice on the lower levels with tons of debt before they were able to get they’re head above water? Yes they did…

So let’s assume first off, there will be different levels of success for all who enter the gates, vastly different results. And only a small portion will reach those extremely high levels of success. Let’s also assume that any success in life will come at great cost and effort. Is there anything in that thought that sounds unreasonable?

Back to the question: “Is anyone doing it”. We’ve established that the answer is most likely yes, but now the question becomes, is it a statistically significant number? Meaning is there an average likelihood that we can duplicate their success.

What does YOUR common sense tell you? Never mind… What do you think I will tell you… J

The path to trading full-time…

First lets review the Primary Goal; New Trader (yeah that’s you) wants to trade full-time for just himself, with a beach front property off in the islands somewhere.

Assuming that you’re not already independently wealthy or are about to win a huge lottery there are three basic paths to trading full-time.

 

1. Consistently trade a reasonable model that produces good risk adjust results for however many years it takes to finally reach your goal;

1. Consistently trade a reasonable model that produces good risk adjusted results for other people;

1. Be one of the “one in a million” statistical outliers that can just actually let it ride until you have more money than brains.

Each approach brings with it very specific pain, risk and reward (outside of hitting the goal).

Right out of the gate we already know that option one is going to take a very long time. Depending on the initial funding levels, it could take close to twenty years. Let’s investigate that number a little. Let’s say you’ve been saving and have $5000 you’re willing to put into an account to initially fund it. You’ve also done all your home work and have a reasonable model with what appears to be good risk adjusted returns (and your lucky enough to be correct – Smart Newb). You’ve also given up Starbucks and are going to sack away another $50 a month into the account. Your goal is to be able to generate $50,000 a year in interest income on average without dipping into your accounts principal. How long will it take?

Well the short answer is 41 years… And there is a problem with that number. It assumes that every year going forward from the time you become a full time trader is going to be a profitable one. Is that a reasonable expectation… Back to Barclays.

In the last 21 years, only three have had negative numbers. So there would have been only three years where there would have been no money coming in… Wait, let’s rephrase that: There are three times in your trading career where after an entire years worth of 50 to 60 hour work weeks you have absolutely nothing to show for it, no way to have paid the mortgage, the car, food, gas etc… There were three times in this period where you would not have been able to survive, unless you had plan well in advance.

It’s obvious here there needs to be a contingency plan in place. Somewhere along the line, before you take the plunge there needs to be a substantial financial safety net to carry you through the slim years and you would have to be very careful not to spend excess returns from one year as this is part of the cash that keeps you afloat in off years. Part of the danger here is those excess returns could push New Trader into a higher tax bracket and cost him more money and dilute his monies that carry forward. A total of 13 of the 21 years were below the average return, so again, New Trader needs to stick to a very tight budget in the good years to survive the poor ones.

It’s also interesting to note here, that two of those negative returns were also consecutive… There would have been a two year stretch where there was no money coming in at all; so planning for a single year may not be enough.

Now some New Traders will think, I’ll worry about that later, but not our New Trader because HE’S SMARTER THAN THAT… He knows what the risk is, and if he’s serious about his goal of trading from a manufactured home on the edge of the Wal-Mart Parking lot (he did some calculating and determined that in 41 years, $50k a year won’t get him on the beach), he’s going to have to be honest with himself about the risks of the goal. Anytime New Trader thinks, I’ll figure that out later, it’s a red flag to figure it out now. Ignoring the risk, doesn’t remove it, but it does make you more susceptible to it.

Obviously, the reality to this is, it’s not feasible; nobody is going to trade 41 years to earn an amount that inflation will likely have rendered “poverty level”. So what numbers do we need to start with to hit those levels in a relatively reasonable period of time, say, in ten years? The magic answer is $150,000 plus an additional savings of $400 a month, (or put differently, the SUV you drove to Starbucks).

If you had $300k and an SUV payment, you could do it in just under five years…

New Trader was fond of saying, “I’m willing to do whatever it takes to be a full-time trader”. But that was before he really understood what it took. Now he’s not so sure. And keep in mind, there is a high probability that what is working for New in years one, two and three, won’t be working in years 21, 22 and 23. He will probably suffer dwindling returns as market impact and changes in long term price action takes its toll on the efficiency of his approach.


Next up Option Two… Trading Professionaly. (Yes it's as hard or harder than you think it is...)

FXAnalytics,

As always, top notch content! I'm looking forward to your next installment.

FXAnalytics,

thanks for a great thread!

Best,

jaykay

You just destroyed a ton of noobs dreams.
I can still remeber my first demoaccount statement.
It was 50k to 370k in 2 hours. Trading USD/ZAR placing 50 trades.
My trading experience was 1 month back then.
Noobs here would masturbate all over it. So did I.
But you get wiser with time. ^^
I think most beginners here tend to forget that making profit does not equal success. Let's do an experiment. Get a coin one side is buy one side is sell. Toss it and trade on the outcome. Chances are that you'll make money with
your trade. But was it a sucessful trade? Guess not.

It is not dream to turn $100 to a million.

only thing you need to know is get your self some indicator that you fell the indicators will give you notice when trend is end/start.

wait until trend start. usually 30 min is better then 5 or 15 min.

try understand why trend is end/start.

when you understand why you can using way more money to do trading.

FXAnalytics was right.

There will be alot of noobs telling you .... but it CAN be done!
Over and over....

Keep on takin' the Uppers MT and when your stash is empty {mt}, I'm sure you can find some more.
{"Welcome ... to the Machine..."}
Your choice. Escalator or Meat Grinder.

ps. btw. FXA. I have made no further comments because none are neccessary. If it aint broke....

Guys/gals, if I am not mistaking, FXAnalytics is not saying trading for a living is impossible, neither that making it happen a lot faster than average is impossible. Only that the former is very hard, and the latter an anomaly. Which is not quite the same as impossible. But it is what it is.

Best,

jaykay

JKR was unemployed before she turned millionaire to the best of my knowledge.

Stephen King was an alcohol abuser and drinking steadily and lived in a trailer during his initial writing phase. He literally threw his first successful short story into the trash can. Had it not been for his gf/wife who picked it out again and told him to go really try a last time, he would have gone quite a different path altogether.

Also history shows that a lot of "big" writers and artists often "suffer" their art, either initially or always, suffer life and regularly turn to drugs, alcohol and channel their suffering and life perception through their art.

Considering there have been numerous anecdotes of drug use in high pressure environments such as trading desks as well the parallels aren't as far fetched as it might seem, even though for the artist the suffering is usually intrinsic to his being and approach towards the world whereas the traders were just stupid or unknowing enough to want to go do this to themselves and deadlock them into a do-or-die career/constant pressure situation.

Obviously all jobs carry this to an extent; but there's such a thing as above/below average pressure situations.


Anything that creates also runs risk of destroying.

About the "how come there are millionaire makers books out there":
Nobody is saying there are no Leonardo Da Vinci's, Michelangelo's, Mozarts..or if you prefer: Warren Buffet etc pps...

The question just is how much hubris it is to think that each and every beginner has a chance greater than - , er, I don't know, let's randomly invent a figure, 1%? 0.5%? Less? Think in terms of "how many are that can proportional to how many that can not" - to become one of these people.

IMHO it's like an ATR - just because one week moves 1000 pips and stands out like crazy it's rather stupid to assume from now on every week will be like that..the average range is much, much lower...
IMHO a good analogy

about:
There are actually people that bother themselves with this because they have love, want to share and feel they want to give something back.
They ask money for their time for the very reason that you can't click "buy/sell" at the same time that you are answering a PM about what a s/r line is.
Obviously it's also an option if you are undercapitalized and do not have enough to both withdraw and compound with.

This leads to the most important bit if you really DO want to do this:
I would say that 200$ a day guy is someone who doesn't "get it" then.
If you manage to have expenses in excess of 4000$ a month and then whine about not going anywhere / compounding what you have over EIGHT YEARS then seriously, you are to blame, not your trading or anything else.

The key, and I believe this with all my rational capacity, is to be able to ISOLATE your trading funds. They are not your cash register you ring up at the end of each month. If they are and you are NOT sufficiently capitalized => beartrader's thread ahoi - then you are literally screwed.
You will run the rat race all your life just as you would have done in a job.
Why bother?
The answer imho is: don't!

Either figure out a way to steadily increase both income and capital base BEFORE EMBARKING ON THIS VENTURE => HAVE A BUSINESS PLAN
or
don't do it.

This really is the single biggest problem - the hobby/gambling/fun/exhilaration/showing off/bragging/ego fodder/whatever else stuff.
Either you realize this isn't a game but a business you are trying to run for with and about yourself, or you're not taking it serious.

If you're not taking it serious - you either have too much money and time to burn and a lot of boredom in your life or you have a self-sabotage twist in your psychological makeup that needs addressing(this is the case for a LOT of people and I say this including me. Thank you society for imbuing us with all them lovely mechanisms!).

Not sure if I missed something, but these are all some very crucial points imho.

Feel free to toss them out, add to them, discuss or whichever. I hold these as my beliefs.

All this talk about not being able to make money in forex makes me want to sell flowers on a street corner for a living!

Really, if a great trader is only making 2% +/- 1% a year, why do it? I understand the points being made here and I don't buy into the "Make Millions in 3 Days" mentality. But could someone explain why it is not possible to turn $300 into $100k in a year? I may be a "Noob" but this doesn't mean that I have not done my due diligence in MM, Risk and a solid trading system that has been worked to death in demo accounts, read every book I could get my hands on and spent hours going over forums, charts and a truck load of back data.

I will keep this thread updated as my trading progresses.
Or maybe I'll just take over the world....

Pinky: Gee, Brain, what are we going to do tonight?
Brain: The same thing we do every night, Pinky - try to take over the world!

This is all really good discussion gang, good questions and input... Let's keep it on positive note (like you are - no flaming) and remember to support your arguments with numbers, not beliefs...

FXGenius... I hope that I've already begun to answer your question. It's not that it IMPOSSIBLE to turn $300 into $100k in one year, but its not LIKELY... and when I say its not likely, I mean you probably have as good a chance as winning a million dollars playing the lottery (when was the last time you won a million playing the lottery?)

Go back to our first litmus test... Is anyone doing it. Sure, they are, how many, though? Well it seems to be a very small percentage... Take a look at the Mystic Genie Thread... Of all the thousands of reads it has gotten; how many have been able to duplicate the genies success? Zero as far as I can tell.

Turning $300 into $100k is like 4000 people sitting down and reading everything they can about heart bypass surgeory and then walking into the OR and performing the operation. One or two will actually have a patient that survives... It's a high risk/high reward gamble. You can try it, but just don't be dissapointed if you fail.

If this were something that were really possible you would see all these forums saturated with threads like; I turned $1000 into $1,000,000 in two years. Where are those threads? Where are those people. I've been around forex for five years and I don't see them, and even if I did encounter one or two (which I haven't) it would still be a statistically insignificant number based on the thousands and thousands of people who have passed through the fx doors only to fade away. We are the "mean", it's fine to want to acheive high returns, but if you take on the risk that it requires and you fail, you can't cry over it... You made the choice knowing (even if you ignored the facts) that the likelyhood was very, very, low.

In your post you bring up a really good question and analogy... Why not just go sell flowers on the corner... Most FX traders will be those corner sales men; their will be some larger shops that sell more volume and above them will be the wholesalers who sell alot more volume and above them will the importer who makes a small fortune bringing exotic flowers in from all over the world. This guy will make a killing on flowers but he will be the exception to the rule. The vast majority of shops and corner salesmen will only scrape by.

What's amazing about forex is, we have a bunch of corners salesmen that want to tell you how to import the product, because they had a good week or month selling their goods... Doesn't make sense.

So why bother? Because FX helps us reduce correlated risk in our financial holding... Well what if I don't have financial holdings, and my goal for forex is to make a better life for myself... Then take the exit that is laying just up the road and put together a good risk adjusted model and trade for other people. $50m worth of assets under management (AUM) will generate $1m a year in admin fees and that or more in performance fees in a good year.

But lets be clear - this is no walk in the park either, if you are going to be a money manager you've got to be good at a lot of things beyond trading (which you have to great at). But this is easier (relatively speaking) than turning $300 into $100k in one year...

This is what we're going to be digging into here very shortly, so stay tuned.

I hope everyone is making money, my crystal ball and demo account were doing pretty good, and then.....

Another broker (and demo account) bites the dust, and it wasn't all my fault for once! Opened a position (non news) and while setting the s/l (yes I know, have it set before hand, but it is hard to set during a run, fixed with new broker demo). The position was moving the proper direction and got spiked for a 93 PIP loss!!! In 22 Seconds!!!

Can anyone backup the 1.48007 Euro for 1/16/2008 around 10:52 AM EST?

My take on this is that they were taking out s/l's for their profit, and I have read of this broker doing just this kind of thing in forums. The good news, it was a demo account and I have learned (and am passing this on for those who may as yet learned) a good broker will be worth more than your cash in your account.

I have opened a new demo with a more? reputable broker, we will see how it goes.

[Edit] In reading a different post I found a price checking tool. Graph is below, if anyone has different data to show, please post it.

Jup. Price went up to 1.4808.

lol, $100 to 100k????

if you can do this in a year, then you are almost spotting every move the market does with some good mm. then you are the best trader in history.
probably in longer time frame can be possible but in 1 year and just trading forex??? if you can do it live, ill put my money into you.

you are demoing, thats like a video game or gambling and it can be possible as money does not have effect on your psyche.

Linus

I don't see that on my charts can you post a screenshot of what you are looking at to clear up my confusion? Thanks!

Looked at it again.
I've been looking on a 10M Candle that started 10:40 AM EST?
That clearly touched 1.4808 but the next 10 min does not touch it.
So I don't know what happend 2 Minutes after tat 10M closed.
I'd guess spreads must have been pretty big seeing the imense selling that happend minutes after that. But bigger spreads are normal.

Oanda says 1.4670? LOL that can't be!

I'm going for $300 to $100K in 1 year
believe it or not, $200 makes a big difference in reaching 100k.

Actually spotting every move perfectly would make me a "Millionaire", if you do the math it's not that hard to do. The hard part is walking away from trading when you are done for the day. It could only be a few minutes of trading, log off and walk away. Try it some day. It's hard.

Actually money does not have an effect on my psyche. Remember, trading is an emotionless activity, and money is only an instrument for exchange and nothing more. There are plenty of things to exchange, we decide to trade currency.

It is always very interesting for me how FX professionals are educated by FX newbies demoing for some time, reading FX HOWTOs, free e-books, etc. It happens all the time. Please read a good post by Merlin which fully discribes the current situation (he wrote it in Nov 2007!!!):

http://www.forexfactory.com/showpost...9&postcount=21

How can somebody teaches them, professionals and "old" traders trading and psychology who has never risked a cent in the Forex? Oh yes, absolutely right, that "trading is an emotionless activity, and money is only an instrument for exchange and nothing more" but as long as you never tried in real, how do you know how will it affect you?

As we could see FX Genius activity, it was merely newstrading being in position for less then a minute. With market maker retail brokers you will not be able to do this in live account, if you can, then after making $300 to about $3000-5000 they will kick you out or put you to manual execution. You could do it at a real ECN, but there spreads are changing too fast after news, and you will be badly filled about half of the time. Besides newstrading is not always 100% countable, there are lot of time when there is old data revisions, incorrect news (updated after some seconds or minutes), other crosses, oil, bonds or something affects your pair (eg. USD/JPY affects GBP/JPY just as two days before at UK retail sales - it came back within an hour), etc, but I think FX Genius has already experienced it in his demo account.

I think that FX Genius and other newbies should be a bit more HUMBLE (at least to the experienced ones not to an average or below average live account trader like me) until they can show up some experience in live account (more than 3 months in live as more than 90% lost ALL their money after 3 months in FOREX irrespectively how much they demoed - but of course this is also not a new information to any newbie because they have red it in free or not free FX books : ).

Otherwise it seems to me FX Genius has never made 300 to 100k in one year, maybe he had some good months with a demo account that was not burnt in weeks or days. If FX Genius could prove it - even on demo account - in 3 years in a row that he could make 300 to 100K in a year, I would take him really seriously.