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Can you actually live off Forex trading?

  • #21
  • Oct 9, 2008 3:53am Oct 9, 2008 3:53am
Quoting malmsteen_20
Anyway, i lied about my years in the fx market. So don;t try to challenge me ok? Achthung?
LOL, please don't get mad on us little kid
  • #22
  • Oct 9, 2008 3:58am Oct 9, 2008 3:58am
Quoting malmsteen_20
........Its a shame people like you still exisits in this world........
?????
  • #23
  • Oct 9, 2008 10:33am Oct 9, 2008 10:33am
Making a living off of trading anything can be done if you have a large account. You can make 3-5% per month by taking small risks so that a series of losses won't wipe you out. And you will take a larger series than you can imagine, I don't give a shit who you are.

If you have 200k and make 3%, it's 6k a month. I think most people can live on that. However you really want the account to grow, so you shouldn't take it all out.

Making a living off of anything smaller puts too much pressure on you, you're going to screw up eventually if you need to make a living from it.

The vast majority of people who come onto this forum think they're going to make a fortune starting with basically nothing. It's not going to happen.
  • #24
  • Oct 9, 2008 10:52am Oct 9, 2008 10:52am
There are people on this forum who make 3-7% a week, now initially this percentage could never support you here.... But lets average it to 4.5% a week (I would be very happy with that) 18% a month compounded Do the math in a couple years you could.

here it is only compounding every 6 months..(because I'm lazy)
every 6 months you would have at least 108% profit..

at 6 months you have 6,240

1 year 12,979

18 months 26996.53

2 years 56152.75 (from here you're making 108K a year...if that's your goal and for me personally it would be a raise)

Possible however doesn't mean probable....The vast majority of people on this forum will never make significant gains on the FOREX. The number one reason is figures like I just showed you.

"Wow that's all I have to do?".

What that doesnt say is the several years and countless hours of research that would go into developing your skills to a level where you can consistantly make those kind of gains.

I've been doing this for 3 years off and on and what I've found out is there are no short cuts.

All you can do is substantially increase your learning curve by listening to the right people.

Not every method is right for every trader.

No Money Management (Stop Loss) Means you will lose all your money (maybe not today or tomorrow but soon...I've done it twice)

Never pay for signals (if they were any good these people would trade them themselves and not worry about money)

Back testing doesnt mean too much (Forward testing Live on a Micro does but the pschology will change as your lot size increases and more of your money is out there.)

There are many excellent traders who visit here (there are many more excellent traders who no longer visit here because of assorted carp heads)


Good luck to you....It should be 6months to a year before you consider going live with anything other than Beer Money.
  • #25
  • Oct 10, 2008 4:43am Oct 10, 2008 4:43am
Quoting Dopey
Making a living off of trading anything can be done if you have a large account.
True.

But also:

Making a living off of trading anything can be done if you have 2000-3000 usd.
  • #26
  • Oct 10, 2008 5:42am Oct 10, 2008 5:42am
Quoting Verdi
http://www.forexfactory.com/images/buttons/viewpost.gif
Can normal people, with small capital ($1000-$3000) make money and live off trading Forex?
no.


Next question:


Can Extraordinary People, with small capital ($1000-$3000) make money and live off trading Forex?

Absolutely ! And they can do a lot more than just make a living at it. They are 1 in a thousand.
Ofcourse, the 3K is arbitrary. The account is doubled several times until there is
sufficient trading capital to actually "make a living", say mid 5 figures account size.
and then regular withdrawals of profits become their "paycheck".
They get up a few percent and take it out and spend it. It's just like a job.

In order to go far beyond that level of mundane existence, a plan must be implemented
in order to further grow the capital into 6 figures, all the while protecting it from excessive risk,
and still scratching out a respectable compound return AND still withdrawing a percentage of profits
to reproduce the "paycheck/salary" ordinarily derived from the unsavoury task some call a job.

That's several objects to juggle in the air, each one a different shape and all have sharp edges.

Most people cannot do it. Everyone who has some degree of success in the practice of this craft
will honestly admit that sometimes it's an awful struggle on a number of levels.

Even Warren Buffet complains about something. His ass is sore form sitting on a private jet all day ?
The Sultan of Brunei has 2 wives and has to satisfy them both with a 3 inch weenie.
Everybody wishes for something, even if they have the entire world in their pocket.

If you become the world's first ever private Forex Trillionaire (not including soverign entities),
you will enevitably find something that you don't like about life and just like the rest of us,
moan and groan and wish for more. How dare you ! You've got a Trillion Bucks
and you're still not satified ! Why did you even bother ? Now can you see, rich people are strange .

Moral: keep it small (like the Sultan's weenie) until you can handle the pressure.

Also:
Money without disipline just means you're holding someone else's money until they take away from you.

If you get past 100 Grand on your own, you'll not have to ask, "what do I do next ?" You'll know.
Until then, even though the odds are against you, you CAN make your necessary monthly expenses
using a small grub stake. However, unless you grow the account to provide some cushion against a market
that will eat you alive, you're walking a tightrope and you cannot afford to slip, not even one time, so be careful.
  • #27
  • Oct 11, 2008 3:20am Oct 11, 2008 3:20am
Quoting LudaPtica
Hey man, i don't belive in technical or fundamental analysis. Pure money management is my game..
Great to see other people think outside the box as well!

  • #28
  • Oct 11, 2008 3:27am Oct 11, 2008 3:27am
Quoting malmsteen_20
No you can't be a full time trader with only 3k - 4k. Not even with a 50k if you have no idea in technical analysis. BUT you can be a full time trader as liittle as $25 for a micro a/c IF you have mastered market movements and technical terms. Fundamentals has nothing to do with FX, i repeat FUNDAMENTALS DO NOT WORK IN THE FX MARKET! Stock or economy goes bearish does not mean it affects the currency! Anyway, i trade for extra income for minor expenses.Not to be a full time trader or a rich dick. But if you hate your job and would rather like to work at home infront of your laptop trading fx, stock and options then you would need to master several system offer here in forex factory. And is FREE unlike some other websites where you have to pay for it. For beginners i reccommend babypips for easy reading and demo your chosen system for at least 6 months and lets see how many trades you can win. If you have over a 100% profit then you are good to go opening a live micro a/c starting at a $300 margin at 400:1 leverage buying/selling 1k lots only. That is 10cts per pips. Some broker offer a minimum deposit of $25 for a micro but that amount is insufficient. Watch out for retail broker. You win a trade they lose money. You lose a trade they win money. So watch out choosing your broker and be very careful with thir spreads they have to offer. Ok good luck and cheers!
OMG, it's hard to know where to start with that post, more or less everything you said is wrong!
  • #29
  • Oct 11, 2008 3:51am Oct 11, 2008 3:51am
Quoting verti

Can normal people, with small capital ($1000-$3000) make money and live off trading Forex?
I guess it depends on what you call 'normal' and how much money they need to live!

The average blue-collar Joe probably earns around 3 or 4k per month net. At these levels the average return for a reasonably experienced trader with an average risk profile is probably around 8-12% per month consistently. Based on those figures you'll need around 35k equity.
  • #30
  • Oct 11, 2008 6:23am Oct 11, 2008 6:23am
Quoting lostinspace
Great to see other people think outside the box as well!

LiS, are you saying that it's possible to profit without studying price charts (given that LudaPtica says that both TA and FA are unnecessary)?

If a simple MM algorithm is all that's necessary to be long-term profitable, then the large fund managers could lay off all of their analysts. In fact, we could write a simple MM-based EA, and we'd all be forex millionaires. Fantastic!

David
  • #31
  • Oct 11, 2008 6:59am Oct 11, 2008 6:59am
Quote
If a simple MM algorithm is all that's necessary to be long-term profitable, then the large fund managers could lay off all of their analysts. In fact, we could write a simple MM-based EA, and we'd all be forex millionaires. Fantastic!
While MM is certainly a crucial aspect, you can't consistently make money w/o having a numerical edge somewhere.

But as for the OP, you can live off any kind of trading if you're good at it. If you're not, then no you can't. The problem is your average person sucks at everything they do, so your average person will not do any better here than anywhere else.
  • #32
  • Oct 11, 2008 7:35am Oct 11, 2008 7:35am
Quoting Rabid
While MM is certainly a crucial aspect, you can't consistently make money w/o having a numerical edge somewhere.
Rabid, that's exactly my point - MM operates independently of expectancy. The latter is determined solely by the efficacy of one's entries and exits. The fact that nobody's taken over the world by writing an MM-based EA that employs random entries and exits, IMHO, supports this assertion.

Hence I can't see how attaining positive expectancy is possible without some kind of analysis.

David
  • #33
  • Oct 11, 2008 8:09am Oct 11, 2008 8:09am
Quote
Rabid, that's exactly my point - MM operates independently of expectancy. The latter is determined solely by the efficacy of one's entries and exits. The fact that nobody's taken over the world by writing an MM-based EA that employs random entries and exits, IMHO, supports this assertion.

Agreed. However MM does effect drawdown, and w/o managing your losses you're just prey to the odds.

I have tested several EAs based on random entries and various MMs. Over short time frames they are profitable, but over long time frames they always regress back to the mean. Last one I tested had 3 year cycles, so you could be profitable for 3 years, then lose it all inside of a few months. Methods like that are insideous that way, I can see why so many people that don't test their methods fail over time.

Quote
Hence I can't see how attaining positive expectancy is possible without some kind of analysis.
It isn't, assuming a wide definition for analysis.
  • #34
  • Oct 11, 2008 9:34am Oct 11, 2008 9:34am
Quoting hanover
LiS, are you saying that it's possible to profit without studying price charts (given that LudaPtica says that both TA and FA are unnecessary)?

If a simple MM algorithm is all that's necessary to be long-term profitable, then the large fund managers could lay off all of their analysts. In fact, we could write a simple MM-based EA, and we'd all be forex millionaires. Fantastic!

David
(Unnecessarily sarcastic comment by anyway....)

I said it was possible to profit from such a strategy, not that it was the most efficient use of equity or that it produced comparable returns to more conventional trading strategies, obviously it would be unsuitable for fund managers as they are performance oriented.

Using solely money management, trading forex becomes purely a mathematical problem with a mathematical solution and therefore doesn't take into account fundamentals or technicals.

A typical example would be averaging or grid trading. Provided trade size amply allows for maximum drawdown it would be possible to achieve a 100% win rate. That's an extreme example and returns would naturally be limited compared to a system which uses say stop loss or hedging for example.

You can academically number crunch and quote all the theoretical statistics you like, at the end of the day it's practical results which count as I'm sure you'll agree.
  • #35
  • Oct 11, 2008 9:56am Oct 11, 2008 9:56am
Quote
I said it was possible to profit from such a strategy, not that it was the most efficient use of equity or that it produced comparable returns to more conventional trading strategies, obviously it would be unsuitable for fund managers as they are performance oriented.

Just as it's possible to put all of your money on black and let the wheel spin...

Quote
Using solely money management, trading forex becomes purely a mathematical problem with a mathematical solution and therefore doesn't take into account fundamentals or technicals.

Nod, the fractional account sizing aspect at least. No wonder the same guy that wrote "Beat the Dealer" started the first hedge fund...

Quote
A typical example would be averaging or grid trading. Provided trade size amply allows for maximum drawdown it would be possible to achieve a 100% win rate. That's an extreme example and returns would naturally be limited compared to a system which uses say stop loss or hedging for example.

Show me a grid trader and I'll show you someone that's statistically guaranteed to blow their account at some point.

Quote
You can academically number crunch and quote all the theoretical statistics you like, at the end of the day it's practical results which count as I'm sure you'll agree.

Partially. Practical results are great, but they don't tell the whole story. I don't care if you have a 100% win rate for the last 3 years, tomorrow you could be bankrupt if you're not controlling your losses.

Ppl will argue "yea, but I've turned an xx% profit!" as they have a poor understanding of the underlying problem. The thing about applied math is that it's theoretical, academic... and completely infallible over time. It doesn't care whether you believe in it or not, or whether you think your practical results are good enough, it's completely relentless. The law of large numbers always wins, sooner or later.

MM is crucial, to be sure, but it won't matter if you don't have an edge.
  • #36
  • Oct 11, 2008 10:17am Oct 11, 2008 10:17am
Quote
In a strategy which doesn't use technicals or fundamentals the edge is money management!

Money management isn't an edge, so if you're only using a strategy that has no other edge... then that strategy has no edge at all.

Quote
Do you agree that a 100% win rate is achievable?

Over what time frame? A week? Sure. 20 years? Not a chance.
  • #37
  • Oct 11, 2008 10:17am Oct 11, 2008 10:17am
Quoting Rabid
I don't care if you have a 100% win rate for the last 3 years, tomorrow you could be bankrupt if you're not controlling your losses.


MM is crucial, to be sure, but it won't matter if you don't have an edge.
In a strategy which doesn't use technicals or fundamentals the edge is money management, and for a strategy which never takes a loss (100% wins) there are no losses to control!

Do you agree that a 100% win rate is achievable?
  • #38
  • Oct 11, 2008 10:22am Oct 11, 2008 10:22am
Quoting Rabid
Money management isn't an edge, so if you're only using a strategy that has no other edge... then that strategy has no edge at all.

Over what time frame? A week? Sure. 20 years? Not a chance.
(First of all I'm not using such a strategy as the returns aren't comparable, I'm just proving a point.)

100% returns while a currency and trading of it exist, and of course the broker you're using stays solvent......20 years.....200 years.....forever.

Care to put it to the test?
  • #39
  • Oct 11, 2008 10:43am Oct 11, 2008 10:43am
Quote
100% returns while a currency and trading of it exist, and of course the broker you're using stays solvent......20 years.....200 years.....forever.

LOL, ok.

Quote
Care to put it to the test?

If it can be mechanically coded, sure. Send me the details, I'll code it up and run it over my database. I'll expose the strategy to a half-dozen pairs for at least 10 years of data on each pair. If it actually it works, I'll admit that I'm wrong. Fair enough?
  • #40
  • Oct 11, 2008 11:00am Oct 11, 2008 11:00am
Quoting Rabid
Fair enough?
Absolutely! I'll have a think about the exact strategy and see what I can come up with, but I don't want to see it on eBay next week for $99.99, lol

Talking of eBay I've got to go bid on a couple of monitors, 2 of mine quit working in the same week, must be all the volatility!

Catch you later, have a nice weekend....
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