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How much money can a seasoned semi-pro make with trading on Forex?

  • #61
  • Dec 5, 2007 1:19am Dec 5, 2007 1:19am
To triphop and branco,

I believe letting you read the article will answer your questions better than I could. Here is the link to download the article/issue of the magazine (You will need Adobe Acrobat Reader to download it): www.currencytradermag.com/jrty21.htm


Topgun
"Success is not a fantasy, it's a formula." - MTI
  • #62
  • Dec 7, 2007 4:30pm Dec 7, 2007 4:30pm
Quoting ladex142
Please can someone clear this confusion i have; i've heard people turn 10k using leverage in 100k in a year, isn't that not more than a 100% returns on 10k of investment...or am i missing something, please clarify this for me.
All this "i heard this and that" is rediculous. Forget what you heard it is all about what you know and what you heard is what you don't know sorry to put it bluntly that is the truth. It all goes back to "If it's too good to be true, it probably is". Get facts not assume on sayings in the rumor mill. Make what you heard real. Find out who you "heard" it from and have them divulge the proof of their 100% returns. Then there will be more soundness in these statements of 10K becoming 100K or 1MIL. Ive seen these hypothetical claims myself. Go to leveragefx.com and watch their free videos i bet your eyes will light up. A majority will try and replicate it. Good luck and happy trading. Forget luck though. Focus on building your skills.
"Diversification is an excuse for a lack of talent" ~FXC
  • #63
  • Edited 5:34pm Dec 7, 2007 5:26pm | Edited 5:34pm
Quoting tdion
Hello mld. I am skeptical of anyone that claims 100% a month.... so if you are in this elite group, tell me this:

What is your risk every month?

Surely there is a percentage of your portfolio that is exposed. What is a bad month like for you? Regards.

PS) "Being a believer within" doesn't make pips. What are you doing to make your returns? Discretion with chart analysis? Using fundamentals to filter good TA signals? I'd like to know something more concrete than "be a believer" because there has to be more of a method than "I believe this trade will work."
Ok after reading my response you might take into account that I'm a new member but that aside. 100% a month you say is unrealistic if you put logic into it just step back and look at it. But it doesn't mean its impossible.

1) It depends on how much capital you have and want to make 100% retruns from.

2) Don't make 100% the strict target, make a range of 20% give or take undershoot it and maybe hit 90% return or overshoot it with 110% return that gives you your 20% range.

3) Again on capital $10,000 vs 10,000,000 is just both equally difficult to theoretically gain 100% returns in a month. Risk VS Reward, Leverage and margin requirements and time spent monitoring your trades.

4) Ill give some insight on the possibility.

*Suppose you have an account $100,000*

you want to make it to $200,000 within a month?

how would you do this Day trade or intraday?

Scalping or Range trading

Here's one scenario.

beginning balance $100k

Leverage 100:1 or 200:1 if your broker allows

Enter trades only on tues-thursday

Monitor all of it unless you're gonna range trade and you have done your analysis that a trend has formed and you can leave it for a few hours.

trade 1 100k lot of USD/JPY or GBP/JPY factor in the costs of the spread. your P/L doesn't usually include the spread fees later.

Risk/Reward ratio = .47/3.00 basically Risk 47 pips one way to gain 300 pips (good luck it can happen if you did your work luck is unecessary)
Must enter at a good entry point of either trend reversal. Go short or long accordingly.

STRATEGY:
Trailing stop = 100 so when it does move 100 it moves up 100 pips from the 47 stop loss and entry and covers the stop loss ex 224.00(entry) 223.53(stop loss) 227.00 (+300 pip LIMIT) anything past that you're greedy and willing to give back all that you gained. When it moves 100 pips it moves to 225.00 (100 pips from 224.00 entry) therefore you have a guaranteed 53+ pip profit just incase it decides to move against you -47 pips and hits the new 224.53 stop loss. another 100pips you'll have a guaranteed 153 pip profit if and when it hits 226 (100 from 225 and so on) take profits here if you want or keep going if you really did your homework and the trend really is projected your +300 pip profit target of 227.00.

If you enter late or you enter when the market is in a channel of sideways movement. Hedge your position for example you entered @ 224.00 shorting GBP/JPY go long GBP/JPY @ 223.93~ basically the average spread difference of GBP/JPY is around 7~ pips. so you basically limit your current losses due to market volatility.

One of your hedged trades will lose and hit the 47 pip stop when that happens your other trade that survived will be moving into positive territory

Move your stop ONLY when it hits +94 (47X2) pips in your favor to make it a free loss on the hedged loss. or just wait 6 more pips for it to hit your 100 trailing stop move.

Other than that proceed with the strategy stated above.

Do this several times a day tues-thurs and enter only on trade reversals and confiremed up/down trends.

Calculations of expected profits and losses vary due to market volatility and spread differences. Thats the surprise you can find out for yourself.

Do this for 4 weeks Tues-thurs when the markets move the most and possibly you can have your 90-110% return range in sight. stick to and focus on the plan. When you do this you can profit from almost any movement.

The hardest are the sideways channeled movements with a small range of about 20-30 pips from every up and downtrend. when market conditions persist like this stay out or just hold the position. dont enter untill it breaks or cut your losses immediately if it goes against you and you didn't hedge your position. Never add onto a losing position. Add on the winning ones to magnify your results and take the profits of those that hit your limits while having others riding the trend and continuing to profit. exit all trades upon the trend reversal this is because you probably made all your money already with the original trades anyway. the losses you'll sustain from the recently opened trades will be miniscule considering if you allowed your original trades to hit their targets.

All this is easier said than done. Factor in all the monitoring and the hours spent and unexpected circumstances might afftect your projected target. miss one session you might as well forget about it.

Likewise 100% in a month? Unrealistic but possible.


The other way is Scalping. there are many threads on this so I wont bother to explain it here. Just to let you know the more risk you take scalping with many open positions cuts down on your reward ratio because you'll probably be entering and exiting nowhere even close to the profit targets and taking your net profits down with the bid/ask spread prices with every new position you take.


Focus. on your trading.

I'll take 100% return a year that's a more realistic approach

Start with $10,000

year one = $20,000

yr2: $40,000

yr3: $80,000

yr4: $160,000

yr5: $320,000

yr6: $640,000.....

yr7: $X,XXX,XXX.......??

yr8: YOU GET THE PICTURE.

thats theoretical i'd like to see someone try and do that. message me back in 7-8 years if you have done it lol.

Finally dont be motivated by money, its just an idea. there is no get rich quick because its also get poor quick.

my 2 cents i think im done now have a nice weekend. Ill be waiting for Sunday 5pm est along with you guys on the frontlines.
"Diversification is an excuse for a lack of talent" ~FXC
  • #64
  • Dec 7, 2007 5:37pm Dec 7, 2007 5:37pm
Quoting caek
I guess it could be possible to turn 10k into 100k..... with some ridiculous luck and insane risk/leverage
LOL well said INSANE RISK/ LEVERAGE = INSANE REWARD/LOSS
Focus.
"Diversification is an excuse for a lack of talent" ~FXC
  • #65
  • Dec 7, 2007 5:38pm Dec 7, 2007 5:38pm
Quoting Treehugger
Hello again!

I was only a few hours away and so many answers were given. Thanks.

@Northernstar: I was thinking about this too. I'd made money trading forex, but I'd use stocks for long-term investments only. After studying and investing for 4 years, I believe this would be most suitable for me. Invest in stocks, trade forex.

I know there is a loooong way ahead of me, but I have time...
good way to think it. you got time. time is your ultimate money maker.
"Diversification is an excuse for a lack of talent" ~FXC
  • #66
  • Dec 7, 2007 5:53pm Dec 7, 2007 5:53pm
Quoting Lukester
How do you hedge in forex? sorry newbie question
Basically enter a Position against your own instantly. for example the spread is 4 pips for GBP/JPY bid is 225.00 ask is 225.04 create a market order of entry @ those prices accordingly one short one long. thats your hedge. along with that market order put stops and limits as well so the stops and limits are of equal distance from eachother. Basically it limits your losses by hedging your risk and loss to a minimum because one order goes 1 way the other goes the other way equally. 1 will win and the other will lose usually stick to the winning one and build on that position. thats basically hedging for you in a pipshell ha ha* no pun intended ok hedging in a nutshell enjoy.
"Diversification is an excuse for a lack of talent" ~FXC
  • #67
  • Dec 9, 2007 6:40am Dec 9, 2007 6:40am
Correction on my mistype up there on my long response to 100%+ returns

*Do you want to day trade or intraday*
(lol as you know thats the same thing, i think i was dozing off in the computer lab when i wrote this and i missed it.)

so my corrected statement is

*Do u want to Day Trade or Swing Trade for days at a time or longer?*


So i stand corrected, happy trading.
"Diversification is an excuse for a lack of talent" ~FXC
  • #68
  • Dec 9, 2007 4:02pm Dec 9, 2007 4:02pm
I have to agree. After a few months I have made a few mistakes and as I understand it, 85% of day traders are losing money. Ther'es a good introduction to forex trading written here. No sales, no bullcrap - just straight up.
  • #69
  • Apr 22, 2008 1:28pm Apr 22, 2008 1:28pm
The sad truth is 90% of all forex traders lose all of their money. You have to learn first.

The thing with forex or commodity trading is their is so much leverage that you need a good amount of money to trade it.

Look at commodity trading you need at least 40k to trade it without taking too much risk.

A sane seasoned pro will take a 2% risk on each trade on 40k that's $800 you are willing to lose on each trade.

If you go in with 10k and take a 2% risk you are risking $200 which will get you stopped out about 80% of the time. If you take the $800 stop on a 10k account you are risking too much. That's an 8% risk on each trade.....imagine a hedge fund manager or mutual fund manager risking 8% on each trade.

So in reality if you want to gamble trade forex or commodities on 10k you will get wiped out like everyone else.

Learn what you are doing and go in with a good amount of money. Place safe conservative trades and keep your risk to a minimum.

Good Luck!
  • #70
  • Apr 22, 2008 2:20pm Apr 22, 2008 2:20pm
Quoting erock
The sad truth is 90% of all forex traders lose all of their money. You have to learn first.
A sane seasoned pro will take a 2% risk on each trade on 40k that's $800 you are willing to lose on each trade.

If you go in with 10k and take a 2% risk you are risking $200 which will get you stopped out about 80% of the time. So in reality if you want to gamble trade forex or commodities on 10k you will get wiped out like everyone else.

Learn what you are doing and go in with a good amount of money. Place safe conservative trades and keep your risk to a minimum.

Good Luck!
90%... another made up statistic that cannot be proven.

2% risk on 10,000 is doable you just need to adjust your position size so you can place a reasonable stop. Most don't know how to set a stop so they use an arbitrary number. If it takes dropping down to micro lots then so be it. People need to calculate position size based on market conditions which determines your stop.
  • #71
  • Apr 22, 2008 5:11pm Apr 22, 2008 5:11pm
Quoting magnumfreak
90%... another made up statistic that cannot be proven.

2% risk on 10,000 is doable you just need to adjust your position size so you can place a reasonable stop. Most don't know how to set a stop so they use an arbitrary number. If it takes dropping down to micro lots then so be it. People need to calculate position size based on market conditions which determines your stop.
http://forexfactory.com/showthread.php?t=67241
This one is based on research and not made up.

As for the account size needed - plenty of market makers and brokers offer commodities trading starting from CENTS per unit now. Oanda has around 60 cents per Gold $ and as low as 1 cent per Silver cent e.g., while ABNAMRO in Germany has basically all commods at a few cent per lowest increment.
You can trade it with spare change.

Stops should always be sized in the same % indeed(1% is plenty if you do it right).

I strongly recommend the smallest sizing possible for best precision for ANY account size.
Trust price. Know yourself.
  • #72
  • Apr 23, 2008 7:49am Apr 23, 2008 7:49am
I actually have a spreadsheet on my desktop that can calculate return over time. It is quite good and can give you some perspective on what you could make in different circumstances. I have attached it (hopefully) for you all. I helps answer some questions.

Here are some things that you can do with it.

Minumum starting capital $2500 Maximum $10000, Maximum risk per trade (anywhere from 1 pip to 40.... I know alot of people risk more but this is basic for MM), What account you might use ( normal or mini, and it shows the difference in earning potential, Your risk % ect ect.

It just shows that for $10000 at 2.5% risk, with a 40 pip SL and 100 Pip WEEKLY goal ( once again there are some out there that with trade outside these parameters) you could turn it into 20000 in about 12 weeks on a mini account. If you achieved you 100 WEEKLY pips for 52 weeks and traded 2.5% of you account at all times you could expect over $200000 in your first year.

You can adapt your own style to it but there are limitations to the spreadsheet... Sorry for those who trade for more than 100 Pips.

Have a play and let us know
Attached File(s)
File Type: xls PIP_Calculator_V3b.xls   277 KB | 432 downloads
  • #73
  • Apr 25, 2008 6:20pm Apr 25, 2008 6:20pm
20-30% annually. I'm sorry but I just don't buy it that people can consistently make 50% a month or whatever they claim unless they are using risk that is too high. Run the other way if they claim that. They may be able to do it for a short time but I have yet to meet a trader than can show 5+ years of doing so with reasonable leverage. Real records, not backtesting. The best traders in the world that run huge hedge funds (not the sketchy ones that blow up from trading crazy thinly traded crap) would kill for 20% returns in a year.

So no you will not be able to trade for a living on $10,000. If you want $100K per year income, you would need $667K account assuming 15% annually (which assumes you will fall short of the top tier). Why do you think so many people manage money rather than trade their own? It's not because they aren't good enough. It's because the start up costs are high. By pooling clients they can earn enough to live. It would take 30 years to turn $10K to $667K at 15% annually reinvested. In other words, if you are a great trader and making industry beating results, you can't quit your job for 30 years if you start with 10K. Depressing? Yes but that's the way it is.

If someone says to you, "well, use more leverage" then you should really run the other way. Leverage cuts both ways.
  • #74
  • Apr 26, 2008 6:16am Apr 26, 2008 6:16am
Quoting neverfox
20-30% annually.
So you're telling me it's impossible to make 1% per week on average, risking 1% per trade maximum?
Is it impossible because nobody would restrict themselves(i.e. human failure) to just 1 trade a week or impossible because it's undoable(practical impossibility)?

1% compounded per week amounts to 48% after 40 weeks, assuming 12 weeks are either untradeable, holidays or just plain yuck.

Quote
So no you will not be able to trade for a living on $10,000.
I know someone that does(no I'm not saying who, no PMs on that please). Has 5+ years on him and trades insanely tiny timeframes. 10-15k account, basically for the margin. Not in USD however.
No idea how he does it, but he uses price action I am told. Gets his daily trades/target done within 2-4 hours every day it appears.

Quote
If you want $100K per year income, you would need $667K account
Well you'd need more than 10k, that's for sure.

Quote
In other words, if you are a great trader and making industry beating results, you can't quit your job for 30 years if you start with 10K.
Not sure about the years, but you definitely can't quit your job undercapitalized.

Quote
Depressing?
Why would it be?

Quote
If someone says to you, "well, use more leverage" then you should really run the other way. Leverage cuts both ways.

Risk isn't leverage / leverage isn't risk.
Trust price. Know yourself.
  • #75
  • Apr 26, 2008 9:51am Apr 26, 2008 9:51am
Quoting neverfox
20-30% annually.
You're right in case of big funds. But with an up to 7 figures account, 10-30% per month is possible. You don't have to use very high leverage or take high risks. Just 1% risk per trade and a leverage <= 10:1 is all you need.

The reason why big funds can't make it: If you have a 100 million $ fund you can't just open a new position with 1000 lots easily (using a leverage of 10:1). For me it's easy to do this in a smaller account.

I agree it's hard work and personally I haven't done this for the last 5 years. But I'll show you my track record in 5 years. Tell me crazy but I want to achieve an average of 1% per day.

Regards - Xaron
  • #76
  • Apr 26, 2008 11:31am Apr 26, 2008 11:31am
Quoting Xaron
I agree it's hard work and personally I haven't done this for the last 5 years. But I'll show you my track record in 5 years.
That's confidence for ya.
  • #77
  • Aug 29, 2008 10:29pm Aug 29, 2008 10:29pm
"I agree it's hard work and personally I haven't done this for the last 5 years. But I'll show you my track record in 5 years. Tell me crazy but I want to achieve an average of 1% per day."

It is not soo crazy, you can do it capturing 20-30 pips everyday, if you have patience and wait.. WAIT to enter in the market at the right moment, you can do it everyday, that's not soo crazy!
  • #78
  • Aug 29, 2008 11:59pm Aug 29, 2008 11:59pm
tunera the truth of the matter is that most people can't or simply won't be able to average 30 pips a day.

you make it sound so trivial as if it's "only 30 pips a day"

hell if you AVERAGE 10 pips a day you'll have a hell of a good year. (of course, i am looking through my EURUSD goggles....)
  • #79
  • Edited 12:25am Aug 30, 2008 12:15am | Edited 12:25am
No offense to anybody, but if I could capture even 10 pips per day, four days out of every five, I'd be a forex millionaire within a few years. At 100:1 leverage that's easily possible.

Let's be more realistic. Here's a post by a pro trader who's widely acknowledged as a master at his craft (he's a frequent contributor to magazines like Trader's World), and has more than 30 years experience. Of course his is not the only way to trade, but I'd say it's a safe bet that he's looked at plenty of different approaches throughout his career. Recommended reading, IMHO.

David
  • #80
  • Aug 30, 2008 7:06am Aug 30, 2008 7:06am
Quoting Treehugger
Hello!

I'm still very fresh in all this, working on my strategy, money management and everything.

Anyway, I was wondering, what could a seasoned semi-pro do, if you'd give him $10.000. Is it likely that he could turn this money into, let's say, $20.000 in a year, without taking too much of a risk? Is it possible to have this kind of gains, if your account's exposure is max. at 6%? Or do you need to take bigger risks to achieve a 100% return?

And what do most of you find "easier" to trade - Forex or Stocks?

Sorry for my n00bish questions, but I'd like to hear your answers and opinions. Thanks! http://forums.babypips.com/images/smilies/smile.gif
I think a semi-pro could make 10,000$ to 1000,000$ over a span of 1 year and with compounding.
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