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In FOREX, is 10% return per month good enough?

  • #21
  • Jul 22, 2010 12:49am Jul 22, 2010 12:49am
If you can do 10% per month consistently you are one of the best traders that ever lived, literally one in a million.
Every second trader here claims to be making this, and more but not one can prove it via verified statement.
Nearly everyone loses.

5% per month compounded would give you a 100% return for the year and outperform the best of the best hedge funds. These are managed by traders on huge salaries and bonuses for their expertise.

If you can do just 10% per year, not month, you could attract millions of dollars of investors money after that sort of consistent return. Bernie Madoff got millions of dollars of investment with a 10% per year return. Problem was he couldn't actually achieve it, so he just pretended he did

If you can hold an account for a year without losing it you would have done better than most, that is the reality.
BTC Return This Year: na
  • #22
  • Jul 22, 2010 2:19am Jul 22, 2010 2:19am
Let's get some perspective here.
We all know it's possible to do even 1 or 2 percent in a day. But it is repeatable over 22 trading days - no way.
For one the market doesn't stay consistent from day to day and secondly, to achieve such remarcable returns great risk must be taken. Even if you could keep that level of perfomance going for 3 or 4 days there's going to come a drawdown day which will either reduce your profit so far, put you into negative territory or worst - wipe your account out completely.

Consistent Repeatable trades are the only way to profit and a healthy mind.
The Market can Remain Irrational Longer than You can Remain Liquid
  • #23
  • Jul 22, 2010 5:37am Jul 22, 2010 5:37am
Hi all, My first post.
Sure for me 10 pc a month is good, if it is consistent, but dont expect it to be. i started with 100 usd about 2 yrs ago and have blown and reloaded my acount plenty of times, but im not about to give up. i have been in front and behind a few times. but after 2 years starting as a complete novice i am now treading water.. before i had made 400pc profit in 2 days and been so drunk from my profit that common sense went out the window and i blew half in the following week thinking that i now new the secret. ha. what a fool.
one thing i have learnt is patience. and stop loss is my friend not my enemy. its to save me when im coming under fire.
So 10pc mnth or 120 pc Pa. is a great thing.
sheesh go to your bank and ask for that on your money.
good luck everyone.
Max
  • #24
  • Jul 22, 2010 6:35am Jul 22, 2010 6:35am
Good posts by M.A.C.Doug and Calulated Risk.

I wrote a lesson on compound interest which is relevant to this thread.
  • #25
  • Jul 22, 2010 6:49am Jul 22, 2010 6:49am
10% a month - impossible to do it every month...
  • #26
  • Jul 22, 2010 6:51am Jul 22, 2010 6:51am
Quoting Marv
Any positive percentage of return is good as long a it's consistent.

How financially rewarding it is depends entirely on your account size.
absolutely.

MACD, awesome post.
  • #27
  • Jul 22, 2010 11:01am Jul 22, 2010 11:01am
Quoting M.A.C.Doug
5% per month compounded would give you a 100% return for the year and outperform the best of the best hedge funds. These are managed by traders on huge salaries and bonuses for their expertise.

If you can do just 10% per year, not month, you could attract millions of dollars of investors money after that sort of consistent return. Bernie Madoff got millions of dollars of investment with a 10% per year return. Problem was he couldn't actually achieve it, so he just pretended he did

If you can hold an account for a year without losing...
Not too sure about your numbers but that doesn't really matter, you're not comparing like for like. A retail trader trading a few hundred bucks on a bucketshop platform cannot be compared to the likes of hedge funds and money managers managing millions, sometimes billions!

10% per month? Sure, why not. At some point you're bound to hit psychological issues and liquidity problems but not for a while if you start with a few hundred dollars.

Anyway, the thread is like 18 months old, I wonder how the OP is doing now.
  • #28
  • Jul 22, 2010 12:35pm Jul 22, 2010 12:35pm
Quoting pipmutt
Not too sure about your numbers but that doesn't really matter, you're not comparing like for like. A retail trader trading a few hundred bucks on a bucketshop platform cannot be compared to the likes of hedge funds and money managers managing millions, sometimes billions!

10% per month? Sure, why not. At some point you're bound to hit psychological issues and liquidity problems but not for a while if you start with a few hundred dollars.

Anyway, the thread is like 18 months old, I wonder how the OP is doing now.
blown out trying to do 10%
  • #29
  • Jul 22, 2010 4:14pm Jul 22, 2010 4:14pm
Quoting domino
blown out trying to do 10%
lol, yes more than likely!
  • #30
  • Jul 22, 2010 10:00pm Jul 22, 2010 10:00pm
So, like I said, I'm pretty new to this. I've been paper trading for around 18 months and am thinking about opening a (small) live account soon.

I was wondering about those returns because - in my own trading - I had a profit of around 20% last month, but am currently down around 15% this month. (For simplicity, both numbers are based on my original stake. I'm still in the black, but only just...)

I was thinking a 1-2% return for the past two months would be pretty good, so I was really startled to see people discussing earning 10% per month!

I'm curious though, what kind of results are people seeing? I've been doing this enough to know that profits (and losses) come in fits and starts. Some months, you'll hardly see anything and then, all at once, all your conditions hit and you'll make crazy money.

Is 8-10% per year a realistic goal or should I be looking for 4-5%?
  • #31
  • Jul 22, 2010 11:00pm Jul 22, 2010 11:00pm
Quoting M.A.C.Doug

5% per month compounded would give you a 100% return for the year and outperform the best of the best hedge funds. These are managed by traders on huge salaries and bonuses for their expertise.
But you have to take into account that most large funds are not using leverage. If the successul retail trader making 100% per annum using 5:1 leverage suddenly had that facility withdrawn, his annual returns wouldnt look quite so impressive.
  • #32
  • Jul 23, 2010 1:07am Jul 23, 2010 1:07am
Quoting forexlunacy
I had a profit of around 20% last month, but am currently down around 15% this month.
Your equity curve is way too volatile in my opinion, try to smooth it out a bit.


Quoting forexlunacy
Is 8-10% per year a realistic goal or should I be looking for 4-5%?
It depends how much you're trading with.

Let's take an average intraday retail trader taking a conservative 15 trades per month, winning 10 and losing 5, risking 1% with 1:1 risk:reward. Taking into account market holidays and time off say he trades 10 months of the year and compounds. That's a return of 60% a year so you tell me, is your 5 or 10% a year a realistic goal?

And that's pretty conservative, some intraday traders are taking double that number of trades, even more, especially scalpers, and some compound aggressively!

There's nothing wrong with starting slow and building your account as you gain confidence but ultimately you want to make it pay otherwise what's the point, you can get 5 or 10% a year with more traditional investments, with less risk and no work!
  • #33
  • Jul 23, 2010 6:05am Jul 23, 2010 6:05am
Quoting akukaya
any opinion guys whether return of consistent 10% per month is good enough in Forex with start account of USD100.
5% per month is good enough in Forex so 10% per month would be excellent.
  • #34
  • Sep 9, 2010 10:49pm Sep 9, 2010 10:49pm
A consistent average of 5% non-compounded is great actually if your leverage is 1:10 or below. Consistency and low drawdown is key. Slow and steady wins the game in the long run.
  • #35
  • Sep 12, 2010 12:47am Sep 12, 2010 12:47am
some good points above, thanks.
no wonder this thread being removed to the rookie section.
if i can make 10% profit per month in trading as the thread said, i will definitely be very very happy.
  • #36
  • Jan 1, 2012 5:48pm Jan 1, 2012 5:48pm
Hi

One of my demo accounts has doubled in 12 months (actually more) so I have just started this strategy on live account of just £70.

I am up to £88 since Sept 18 2011 (now Jan 01 2012)

Not sure if I can keep this up, but if it has done this in the last 12 months (which have been crazy as far a markets are concerned) then I can hold out some hope (12 months is a reasonably long test ) I hope I can get back at least the money I have lost in forex!!
  • #37
  • Jan 1, 2012 9:08pm Jan 1, 2012 9:08pm
Is a 10% return per month good? Is Megan Fox hot?

As others have mentioned already on this thread, it's more about at what risk you will have to accept to achieve this consistently.

When the sums of money become more meaningful, the sums of money you are willing to risk will reduce and a 50% drawdown, which may have been acceptable when your account had only £100, will not be the case if your account now has £100,000.

I'd focus on drawing a line at the beginning of the total loss you are willing to accept with your money and then dividing that money into the amount of trades you expect to do in a year. This assumes the worst case scenario that you lose every single trade. Then you just stick to that plan.

If you haven't established your maximum tolerable loss, you're in effect saying no loss is too big and you expose yourself to the risk of ruin.

You should also benchmark your performance, like against the S&P 500, with focus on the sharp ratio and annual return. If you can't keep up with the S&P with like-for-like volatility-adjusted returns, you should consider doing something else more productive with your efforts.
Good judgement comes from experience. Experience comes from bad judgement.
  • #38
  • Jan 4, 2012 4:43am Jan 4, 2012 4:43am
you need to look at it more subjectively. in order to make 10% per month, you will have to risk a lot. you will ultimately be risking so much that it will be equally feasible that you loose 10% during any given month.

no respectable hedge fund or money manager could justify 10% monthly losses. even if they were making 10% profit most months, the equity swings would be to great.

eventually you will hit a loosing streak and be wiped out. you could trade for 5 consecutive years making 10% per month, then all the sudden start loosing 10% per month (of total equity) and after a few short months of rough trading conditions, years of your hard work could be wiped out.
  • #39
  • Jan 4, 2012 1:53pm Jan 4, 2012 1:53pm
I believe its possible to do 10% / month if you keep to your plan. I've only been trading a few months and wiped my account 3 times. Thankfully I was expecting this as part of my learng curve and I still make bad mistakes and will continue to make these mistakes but I now average 6-10% a week and I'm not an aggresive trader.

For me the the success started to come when I set a moderate target of pips per week (currently 50pips). After this I turned my concerntration to NOT TRADING I know this sounds strange but I would trade like a mad man when I started if there wasn't a trade running I felt naked. Now I view any time not trading as Profit. Money not risked is money not lost. Now I look for a very spesific setup and only trade that on the 15min and 1 hour charts.

I may only have 5-10 trades a week but more than enough to get my(50pip min / week) this has been more than helpful in turning around my trading profitability and those trades at present have a high return and minimized risk.

The key to a return is finding a style practicing it, wiping out , learning and adapting. I still have the impulse to trade all the time like a junkie but I resist it if its not my perfect setup ( I dont mean gaurenteed just perfect for my risk profile) I dont trade, I sit on my hands and wait. As it's going so well at the moemnt its also hard for me to resist not risking more in lot size per trade but I have to if I plan keep any losses managable.

My accounts small and the only problem I see to not being able to keep this up is greed. I'm planning to keep my account below 10K with withdrawals and using my profits (above 10k starts to errode what I'm willing to lose and makes me a little uncomfortable with lot sizes etc). Forex is a lot like a casino the more you play the greater the house odds against you.
Looking to be a better trader
  • #40
  • Jan 5, 2012 1:41pm Jan 5, 2012 1:41pm
Quoting Vmpwraith
I still have the impulse to trade all the time like a junkie but I resist it if its not my perfect setup ( I dont mean gaurenteed just perfect for my risk profile) I dont trade, I sit on my hands and wait.
I believe you are doing the same rookie mistake as everybody else starting out. BUT if I am wrong then I already apologize for this message. It is just a general observation I made over the years on this forum.

Everybody talks about a couple of things which is needed to be profitable: patience, wait for the perfect setup, stick to your trading plan,...

Now in my opinion you rookies are starting at the second step and are totally missing out the first step that is the most important.
How the hell do you know what consistutes a perfect setup? Does this setup you trade really provide an edge (growth of your account) or does it just look good on the charts? Did you look at the market data available and analyze how the profit factor is for that setup? Same goes for the trading plan? Is you trading plan any good? Is it based on an observation you made? Or you just trade it because you saw a similar trading plan on this forum or feel good by the rules of the trading plan?

You rookies are building a plane without knowing how a plane flies. I've been in a similar situation a couple of years ago until I finally started doing the seriously hard research that is required to then find profitable setups.

Quoting Vmpwraith
Forex is a lot like a casino the more you play the greater the house odds against you.
haha, funny. I have a similar metaphor, but totally different to the one you provided. "If you start to trade a profitable trading plan in the markets, then you start becoming the casino, the odds will be in your favor"
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