So you want to make x% a day... | Forex Factory

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So you want to make x% a day...

  • #1
  • First Post: Apr 26, 2008 5:54pm Apr 26, 2008 5:54pm
...I have heard many different numbers here the average being 5-7% a day. So how long would it take you to make that Million or even Billion if you started with a $500 account and theoretically making say 5% a day? As for me I think 5% is very aggressive, my plan....start with $50,000 or so, earn .5%-1% a day. Either way, the attached spreadsheet will let you see where your money will be week by week up to 5 years, it assumes you don't trade 7 weeks out of the year thus only 45 trading weeks. Enjoy!
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File Type: xls DayTradingTheoretical.xls   37 KB | 608 downloads
  • #2
  • Apr 26, 2008 6:04pm Apr 26, 2008 6:04pm
I'm new, but my goal has never been to make a certain percentage per day. With 500$ invested your goal may be to make 25% a day, but with 25,000$ you may be satisfied with 1% a day. I am looking at it like a salary, like you need make X number of dollars a month or such to survive. You can't live off 1% with 100$., and I imagine the more capital you have, the safer you play.
  • #3
  • Apr 26, 2008 6:11pm Apr 26, 2008 6:11pm
That's just it, if you try to make enough to live off of per day with a $500 account, even a $5,000 account you will blow that account trying. The more $ you have the easier it will be to make the $ per day however if you have a game plan that has taken your $500 and turned it in to say $50,000 you wouldn't not want to change your plan because $x is enough for you. If you can make .5% a day with a $500 account then you can just as easily make .5% a day with a $50,000 account however it's much harder to make say $250 a day with a $500 account then it is with a $50,000 account.
  • #4
  • Apr 26, 2008 6:15pm Apr 26, 2008 6:15pm
My point was just, the more money you have in your account, the more conservative you will be. I'm sure there are many people that only keep X amount in their account, and cash out weekly on profits. Compounding your profits can be risky. I don't think of it like what % I want risk or what % i want gain, but what is my overall goal for profit on a weekly basis.
  • #5
  • Apr 26, 2008 6:21pm Apr 26, 2008 6:21pm
All the chit chat about "You are undercaptilized" is absurd.

Reason being: With FXSol (a respected broker) you can trade with 400:1 leverage.... meaning that the risk with a $500 is the same as trading a $5,000 account with 50:1 leverage.

The problem is never undercapitalization.... that is a myth. The problem is finding consistent green pips, and knowing what position size to take.
  • #6
  • Apr 26, 2008 7:36pm Apr 26, 2008 7:36pm
I have to disagree with you there tdion

I live in the UK and spread bet so I don't concern myself with leverage as such,but the principal is the same.

You should risk a certain amount of your account per trade be that 1%-2%-5% or whatever

Therefore...Larger account ...risk less % per trade=less stress
The greatest enemy of a good plan is the dream of a perfect plan.
  • #7
  • Apr 26, 2008 8:14pm Apr 26, 2008 8:14pm
Nod. You can undercapitalize by risking too much of your account per trade. This reduces your ability to withstand periods of drawdown and reduces your ability to recover from losses.

Ie:
With a $500 account and 1% equity that's only a $5 per trade loss max. A 100 pip stop loss and suddenly your working with very small lot sizes. You have to decrease your stop loss to compensate, which means either more trades stop out or working on a lower time frame. A lower time frame means more intraday noise and more frequent trades. That in turn reduces the effectiveness of your system by making you more susceptible to unpredictable events, economic chaos or random news releases all while increasing your transaction costs.

Work with a $50,000 account and that's $500 risk per trade. 100 pip stop loss means $5/pip or 5 mini lots (assuming USD base pair). That's a lot easier to manage on a larger time frame.

Brokers LOVE when people underfund their account, it's a losing proposition for the trader but equates to more spread costs to the broker. Of course they have to continually pull in new junkies to compensate for those blown-out, so you build a casino-like atmosphere to suck in the under-educated.
  • #8
  • Apr 26, 2008 9:01pm Apr 26, 2008 9:01pm
Of course you can make more money with a larger account.

My only point was that you can make equally large percentages with a small account.
  • #9
  • Apr 27, 2008 12:36am Apr 27, 2008 12:36am
Quote
My only point was that you can make equally large percentages with a small account.

Can you tho? On a consistent basis? How do you compensate for longer periods of draw down when you can't scale down the lot size any further?

I only know of one broker that lets you do single unit lots.
  • #10
  • Apr 27, 2008 2:22am Apr 27, 2008 2:22am
please get all this stuff out of your head: if i make x% /day i will be a millionaire in 253528 seconds etc, it does not work that way !!
having goals is essential, but anything below weekly goals is suicidal.
you can have a goal of let's say 300 pips/week and during the course of a week you can get these pips,(maybe you won't even trade on Monday or on Tuesday, but on Wednesday a trade comes in that is a killer ). if you try to make 50 pips/day then you start looking for trades and you see i don't know how many reasons to enter a trade and your thinking is not objective
Twitter: @forexpokerpro
  • #11
  • Apr 27, 2008 2:41am Apr 27, 2008 2:41am
Well ECNs are a problem, usually only getting down to 10,000 unit increments.

But if you can trust FXSol, they offer 1,000 unit increments. So that is 1/100 of a standard lot.

Quoting Rabid
Can you tho? On a consistent basis? How do you compensate for longer periods of draw down when you can't scale down the lot size any further?

I only know of one broker that lets you do single unit lots.
  • #12
  • Apr 27, 2008 3:48am Apr 27, 2008 3:48am
Quoting tdion
All the chit chat about "You are undercaptilized" is absurd.

Reason being: With FXSol (a respected broker) you can trade with 400:1 leverage.... meaning that the risk with a $500 is the same as trading a $5,000 account with 50:1 leverage.

The problem is never undercapitalization.... that is a myth. The problem is finding consistent green pips, and knowing what position size to take.
Quoted for Truth!
Leverage is of no importance when you are talking about 2% risk per trade.
You can risk 2% with 1:100 or 1:500. Results will be the same. Max 2% DD.
The only difference is that you can comit financial alot faster with higher leverage if you want to overleverage your position for some reason.
  • #13
  • Apr 27, 2008 4:56am Apr 27, 2008 4:56am
Actually IT DOES MATTER.

With 400:1 leverage you can get 1,000 unit increments instead of 10,000 or 100,000.... so trades in smaller accounts can mirror those of larger ones with no loss in granularity... IE) 10.5 lots can scale exactly to 10.5 nanolots, opposed to rounding to 11.

Quoting Tjpld
Quoted for Truth!
Leverage is of no importance when you are talking about 2% risk per trade.
You can risk 2% with 1:100 or 1:500. Results will be the same. Max 2% DD.
The only difference is that you can comit financial alot faster with higher leverage if you want to overleverage your position for some reason.
  • #14
  • Apr 27, 2008 10:47am Apr 27, 2008 10:47am
Quoting Clouds
I'm new, but my goal has never been to make a certain percentage per day. With 500$ invested your goal may be to make 25% a day, but with 25,000$ you may be satisfied with 1% a day. I am looking at it like a salary, like you need make X number of dollars a month or such to survive. You can't live off 1% with 100$., and I imagine the more capital you have, the safer you play.
That is why 99% of ppl with a mini-account loose all money, looking to get 25-50% daily.
  • #15
  • Apr 27, 2008 10:50am Apr 27, 2008 10:50am
Quoting tunera
That is why 99% of ppl with a mini-account loose all money, looking to get 25-50% daily.
Exactly
  • #16
  • Apr 27, 2008 4:03pm Apr 27, 2008 4:03pm
Quote
But if you can trust FXSol, they offer 1,000 unit increments. So that is 1/100 of a standard lot.

Nod, micro lots. But from my example above...
$500 account. 100 pip stop loss. USD base pair point (1.00) value. 1% equity risk.

.01 * 500 = $5
5/100 = $.05

That's 5 cents per pip. A micro lot is $.10 per pip. So for this example you'd need half a micro lot.

That means upping your risk to 2% per trade, lowering your stop loss or trading on a small TF. All of which increase your risk. Micro lot granularity isn't fine enough to adequately control risk with only $500.

Bring it up to $1000 and your survival gets better. $5000 is probably more than enough for micro lots. It's just that smaller account sizes suffer from asymmetrical leverage.

Quote
That is why 99% of ppl with a mini-account loose all money, looking to get 25-50% daily.

Reward is always commensurate with risk. You could pull 50% daily, sure, but you'd be risking 100% daily in order to do it. One bad day and you're broke. And bad days happen to everyone.
  • #17
  • Apr 27, 2008 5:51pm Apr 27, 2008 5:51pm
So all we need now is a simple system that will net say 20 - 30 pips per day.

Starting will $2000 on week one and ending with 145 million on year five.....I'll be in that....
It's All About Attitude ...
  • #18
  • Last Post: Apr 28, 2008 8:15am Apr 28, 2008 8:15am
All this talk of X%/? or Ypips/? makes my head hurt.

I agree that setting {realistic} goals is important but what a precipice you Play on.

eg. 50pips/week may not be too aggressive but what happens on Thursday when you are currently Down 35? Now how do you Trade?

"My Goal" is to make sure that I have Read & Understand each particular Trade that I decide to Enter. Formulate a Best, Worst & Satisfactory outcome for That Trade Before I Enter it and let the Pips Fall where they may.

That, I believe, is the Only Control I have on the Market.
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