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Realistic Account Growth?

  • #1
  • First Post: Jan 7, 2010 12:18pm Jan 7, 2010 12:18pm
I appreciate that my following question is a subjective one... however any replies would be appreciated.

My question.

"What is considered good yearly account growth in the Forex Business. Either as a retail trader or Institutional trader".

I have read many threads in this and other forums and found it difficult to form a realistic answer to this.

I have read comments from contributors that I personally believe Know what they are talking about .... i.e. smj and fti ...that express congratulations to traders who are doing well ... but no clear indication of what "well" is.

I am kind of hoping for an answer from someone of their calibre and experience.

A good example would be
Xaron
Evil Kraut

trading journal ... showing a doubling of his account in 9 Months. Which I consider to be very competent trading.

My own stats on Demo trading over the last year, as I fine tune my strategies and style would lead me to believe / expect an approximate doubling of my account in 12 months.

Am I deluding myself .... are such expectations unrealistic.

Are achievements like Xaron's exceptional?.
  • #2
  • Jan 7, 2010 12:33pm Jan 7, 2010 12:33pm
I can give you my view on what I consider reasonable growth. 5-10% per month on Average is reasonable. That being said, I have had months greater than 50% and some months I scrap to lose only 5%. The markets will give what the markets will give.

What is most important in my book is to manage risk. I keep a really low risk profile never having more than 0.5% of my account at risk at any given moment. Doesn't mean I don't have multiple trades open it just means that no more than 1 trade is at risk of losing money if the stop was hit.

While there are some who have done some crazy returns in a month when you look at their statements you can see they were risking way too much (10-20%) per trade. Basically swinging for the fences looking for a home run.
  • #3
  • Jan 7, 2010 12:34pm Jan 7, 2010 12:34pm
It depends on various factors :-

1. How good you are.
2. How much you've currently got ( it's easy to double 1K, and hard to double 100K )
3. How much risk your prepared to trade at.
4. How good you are.



Yes I said 1 and 4 twice cause thats kinda key!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #4
  • Jan 7, 2010 12:51pm Jan 7, 2010 12:51pm
Quoting Cdavid
I appreciate that my following question is a subjective one... however any replies would be appreciated.
Sadly, I think many of the answers (opinions) you receive on a free-to-all public trading forum are worth an equivilant amount.

While i understand the difficulty in doing so, i would switch off Forex Factory until you do not need to ask these kinds of questions again; either because you form your own belief in the market and your own abilities to trade it, or because on the internet, everybody lies.

Hopefully you'll come to one or both of these conclusions eventually, at which point, you'll be in a much stronger position.

Good luck,
Dan
  • #5
  • Jan 8, 2010 12:55am Jan 8, 2010 12:55am
Of course it all depends on so many factors, but Magnumfreak has it right I think. My expectation is 5-15% per month.

At the most simple level: I reached this level of expectation (and reality) by understanding the capability of my method which includes the physical entry and exit rules as well as my money management, based on my personal risk profile.

Main point of learning here (for me) in reaching this expectation after development (which never ends) of my method:

"How can I develop my trading method so that I can become a life-long profitable trader, who is rarely, if ever, exposed to a big account drawdown?"

ie - RISK PROTECTION COMES FIRST - PROFIT LEVELS COME SECOND. (Traders who fail most often have it the other way around..)

The desire to mitigate significant risk means I go for 5-15% per month, not 30%+... critical to sustainability in my humble opinion.
  • #6
  • Jan 8, 2010 7:39am Jan 8, 2010 7:39am
5-6% per month in average over 12 months is possible and realistic by risking maximum 2% per trade. This rate doubles the account.

The big achievement is to minimize the drawdown. As Hedginghog mentioned, a good trader spends more time trying to minimize the losses than finding ways of winning more.
  • #7
  • Jan 8, 2010 8:13am Jan 8, 2010 8:13am
Quoting Sauron
5-6% per month in average over 12 months is possible and realistic by risking maximum 2% per trade. This rate doubles the account.

The big achievement is to minimize the drawdown. As Hedginghog mentioned, a good trader spends more time trying to minimize the losses than finding ways of winning more.

It depends entirely on how good you are, 95% trade below 0%.

My Goal is 30-50% per month on a 10K GBP account, thats what I'm working on and I'll bank the profit each month, put some aside for to replace a losing month, will I get there, find out this year hopefully!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #8
  • Jan 8, 2010 8:49am Jan 8, 2010 8:49am
5-15% average monthly. Notice average. Including big time winner months and even sometimes a losing month.
forget about tomorrow, just steal away into the night
  • #9
  • Jan 8, 2010 9:08am Jan 8, 2010 9:08am
There are great traders, good traders, barely-profitable traders and not-profitable traders. A great trader can grow 15%-30% per month, consistently. In terms of being realistic, like everyone else said, it's a matter of how good you are. A good return of 5%-10% per month for someone who lacks talent and hard work isn't going to happen, but a good return for someone who works his butt off, even with only average talent, is not unreasonable.

Rob
  • #10
  • Jan 8, 2010 9:37am Jan 8, 2010 9:37am
It's an impossible question. It depends on so many different factors.

1. How good you are
2. What's your trading style
3. How big is your account
4. How much risk per trade are you comfortable with
etc.

Also, monthly results vary hugely. One month even a very talented trader might take 5% loss, and on the next one 20% profit.

One thing that's important to remeber, is that even average 3% monthly profit compounded WILL make you a super rich guy in the long term.


Finn


Edit. Oh, Turveyd had almost identical points. Should read before posting.
  • #11
  • Jan 8, 2010 9:44am Jan 8, 2010 9:44am
Quoting FinnTrader
Also, monthly results vary hugely. One month even a very talented trader might take 5% loss, and on the next one 20% profit.
Another category to add to what I wrote is, 'Sloppy Trader'. If someone's returns vary that wildly, they don't have a very effective approach. If someone's a one-note-Johnny, they make a killing when the market favors them, then lose their house when it doesn't.
  • #12
  • Jan 8, 2010 10:13am Jan 8, 2010 10:13am
Think of it this way...

If you can average +15-20% per year, you're beating most of the professionals that trade or invest.


Here's how some of the professionals are doing, updated January 1, 2010.
Complete list is here.
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  • #13
  • Jan 8, 2010 10:25am Jan 8, 2010 10:25am
Quoting GulfCoastPip
Think of it this way...

If you can average +15-20% per year, you're beating most of the professionals that trade or invest.


Here's how some of the professionals are doing, updated January 1, 2010.
Complete list is here.

Professional have limitiations due to the sheer volumes they trade, that and 10% of a Billion is enough to pay the bills so why try to make more.

Look at it this way, with a Good trader making 50pips per day average:-


10K account trade $10 per pip = $500 per day = 100% growth month 1.

With a 20K account is he still prepared to trade at $20 per pip ?? if so no problem 100% again.


With a 100K account, is he prepared to trade at $100 per pip ?? Likely only $30 per pip, so only 30%.

Know imagine that with a 20Mil account even at $50 per pip your % growth suddently becomes really small, obviously your profits are HUGE in $$$ terms.

Looking at it as just a % is to simple and doesn't really work.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #14
  • Jan 8, 2010 10:31am Jan 8, 2010 10:31am
Quoting Turveyd

Looking at it as just a % is to simple and doesn't really work.
It does if you have big balls
  • #15
  • Jan 8, 2010 11:42am Jan 8, 2010 11:42am
Surely the time at which it takes for an account to grow is relative to the frequency of trades that you take, assuming a constant and identical success% on all time frames. Time is entirely a human invention. It might be relevant to you, but the market doesn't contemplate it and it cares less about what is deemed to be 'reasonable'. Anything is possible. The only limitations exist within your own mind.
  • #16
  • Jan 8, 2010 11:54am Jan 8, 2010 11:54am
Quoting Cdavid
I appreciate that my following question is a subjective one... however any replies would be appreciated.

My question.

[color=black][font=Verdana]"What is considered good yearly account growth in the Forex Business....
Most full time guys beat the market around 3-7% month.

That's a great return.

50% is horseshit and not realistic.

no money management there.

m
  • #17
  • Edited Jan 9, 2010 11:28am Jan 8, 2010 12:13pm | Edited Jan 9, 2010 11:28am
The truth is, realistic account growth is something you determine for yourself. Set your own goals; you're the only one who determines what is realistic or what isn't.
  • #18
  • Jan 8, 2010 12:35pm Jan 8, 2010 12:35pm
Quoting acumen
Most full time guys beat the market around 3-7% month.

That's a great return.

50% is horseshit and not realistic.

no money management there.

m

It's not though, different trading styles can produce hugely different results, a Scalper for instance can get in and out 40 times in a day at 1% risk have a 70% win rate and easily make 50% per month, where as a swing trader is risking 1% and only making 3 trades per week so isn't going to make 50% ofcourse.

And a good scalper can risk 1% while making 3 - 4% quite frequently, Magnum Freak for instance although he trades very low risk like 0.2% or something often gets 100+ pip moves of 25SL's.

Pretty much anything is possible IF your a good trader and have a good sytem / method to back it up, can you do it ?? is it easy ofcourse not all we'd all be doing it.

BUT some people do make ludicrous amount, very very few of us sadly, but if they can do it then in time so can anyone else.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #19
  • Jan 8, 2010 1:57pm Jan 8, 2010 1:57pm
Quoting AstonDan
Sadly, I think many of the answers (opinions) you receive on a free-to-all public trading forum are worth an equivilant amount.

While i understand the difficulty in doing so, i would switch off Forex Factory until you do not need to ask these kinds of questions again; either because you form your own belief in the market and your own abilities to trade it, or because on the internet, everybody lies.

Hopefully you'll come to one or both of these conclusions eventually, at which point, you'll be in a much stronger position.

Good luck,
Dan
That's great advice Don ...

What's true for one may not be true for all. Every trader on here has a different personality, different level of proficiency, different potential to earn/lose at different rates. You probably hate to read this answer but there are so many variables that there is no right answer.

The best thing you can do for yourself is trade and keep tabs for a few months using an excel sheet (not yellow sticky pads). After doing this for about 3 months multiply it by 4 and there's your basic annual estimate. You should still keep tabs and check in after 6 and 9 months to see how far off you are from your three month baseline projection.
  • #20
  • Jan 8, 2010 3:09pm Jan 8, 2010 3:09pm
Quoting Cdavid
"What is considered good yearly account growth in the Forex Business. Either as a retail trader or Institutional trader".
If you're outperforming the majority of the hedge funds, banks, and professional day traders...you're doing great!

Obviously, not all of us are the same. I average 12-15% a month and I'm quite happy with that. This year, I'm hoping to step it up a few notches.


If others are averaging 1200% annual returns trading spot FX, more power to them. 1200% isn't realistic though.

Poor fund management and you'll get your ass handed to you a few times. I won't speak for anyone else that trades for a living, but I'm sure MOST will tell you that 1200% annual returns are a unrealistic for 99% of all traders AND nobody will ever do that consistently.

Listen to acument and gulfcoastpip.
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