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How do I make millions trading Forex?

  • #41
  • Jul 21, 2011 2:42pm Jul 21, 2011 2:42pm
Quoting nubcake
hmm, let's have a think for a moment if someone has $1000 is it possible for them to make 1% in a day? of course it is
Making 1% a day seems like a reasonable and realistic goal but it is STILL a fantasy. If you could make 1% a day then in 5 years you would be richer than Bill Gates and sitting on $77,002,912,750, starting with only $1,000.
  • #42
  • Jul 21, 2011 2:48pm Jul 21, 2011 2:48pm
Quoting Custos
Let me put it another way, there is probably not a liquidity issue with 1 million bucks, right?
So, if somebody claims he makes 80% a month, then he can compound starting with 1000$ up to 1 million bucks, cause that takes exactly a year. That is a 100,000% return. I personally have never heard of anybody who was ever able to do that and I also don't think anybody exists who can pull that off. (I might be wrong though).

But it is just so unrealistic that everybody on the forum thinks they can even come close to such a high yearly return. Yes, the...
but why would someone with a million to trade with WANT to continue risking 1% per trade?

edit : i'm tired and have a headache. what i meant to say was "WANT to continue risking x% that earns them 1% a day?" /edit

once the poverty line is breached, and then the wealthy line, then why continue risking so much to then make a trillion and own a country, and then make a gazillion and then own the universe, and then make a crapoblahblahbillion and own existence, and then own reality.... and so on etc.

surely this would be stressful trading at it's absolute worst. not everyone WANTS to have more money than buffet and could handle the stress of it all. having the ability to make a small sum of money into a small fortune does NOT equate into HAVING to continue this growth rate!

at some point, surely, a successful trader has to look around him and admire his legion of naked women serving him grapes and consider it time to simply be content with the amount of money he is making and consider risking larger amounts per trade to be stressful and not worth the return it would otherwise provide! and then also keeping in mind liquidity issues which inhibit growth once a volume level has been reached!
Congratulations ScalaFX for coming out of the closet!
  • #43
  • Jul 21, 2011 2:53pm Jul 21, 2011 2:53pm
Quoting Mr Breakout
Making 1% a day seems like a reasonable and realistic goal but it is STILL a fantasy. If you could make 1% a day then in 5 years you would be richer than Bill Gates and sitting on $77,002,912,750, starting with only $1,000.
so answer my other 2 questions then.... if you can scrape out a few dollars after a day of trading then what account size must you have to make this a reasonable percentage gain as per your self-imposed growth rate?

$10,000?

$1,000,000?

what would satisfy your genius maths and make a few dollars gain in a day within the realm of possible account growth?

i don't actually care about your answer.
Congratulations ScalaFX for coming out of the closet!
  • #44
  • Jul 21, 2011 2:55pm Jul 21, 2011 2:55pm
Quoting Custos
Then you have a % figure you should make on average per day.
Yes, and the best trading systems (mechanical or discretionary) rarely exceed 5% profit per month on average.

Quoting Custos
The second question is ultimately answered with the max drawdown your strat is experiencing. Obviously with a method that only has 20% drawdown, you can go in with higher lot-size in general, than a method that has 50% drawdown.
Good point, finding trading systems with very very small drawdowns is like finding a goldmine. A very small drawdown allows the trader to pyramid his profits at a much, much faster rate.
  • #45
  • Jul 21, 2011 2:56pm Jul 21, 2011 2:56pm
Quoting nubcake
but why would someone with a million to trade with WANT to continue risking 1% per trade?

once the poverty line is breached, and then the wealthy line, then why continue risking so much to then make a trillion and own a country, and then make a gazillion and then own the universe, and then make a crapoblahblahbillion and own existence, and then own reality.... and so on etc.

surely this would be stressful trading at it's absolute worst. not everyone WANTS to have more money than buffet and could handle the stress of it all. having the ability...
no, maybe you didn't understand my example correctly. I was saying the trader only compounds from $1000 to $ 1 million. And that is already a 100,000%. I didn't say about anything above 1 million. I just believe it can't be done in a year. My personal belief.
  • #46
  • Jul 21, 2011 3:00pm Jul 21, 2011 3:00pm
why the heck do people look at making the millions from forex...honestly...

why not just pay off the mortgage? why not just double your annual income? each of these steps will lead to less worry, more spending power, better lifestyle...you might then have spare cash to put into property, stocks, bonds, whatever you fancy...if you triple your average annual income, thats far better than what average joe may ever achieve...

so dont think i wish to make 1% a day, id say make what you make in a month, then try and double/triple that, then decide whether you want to use the money or take the time off...
  • #47
  • Jul 21, 2011 3:03pm Jul 21, 2011 3:03pm
Quoting Custos
Actually sorry, I think you can't just calculate it like that if the yearly figure is compounded, let me think it through...
okay, you take the year end figure "E" and the beginning figure "B". "n" = time period

then you calculate your daily interest rate like that: (E/B)^(1/n)-1

So, if you begin with 1,000 $ and end with 13,290.99$ at the end of the year, you then calculate (13,290.99/1,000)^(1/260)-1 = 1% => daily percentage you need to make on average.
(260 here are the week days per year).

I think I got it right this time.
cheers
  • #48
  • Jul 21, 2011 3:05pm Jul 21, 2011 3:05pm
Quoting nubcake
so answer my other 2 questions then.... if you can scrape out a few dollars after a day of trading then what account size must you have to make this a reasonable percentage gain as per your self-imposed growth rate?

$10,000?

$1,000,000?

what would satisfy your genius maths and make a few dollars gain in a day within the realm of possible account growth?

i don't actually care about your answer.
You are asking the wrong questions. The real question is : what is the average monthly return on investment (ROI) of my trading system, period. And more importantly, what is the maximum drawdown of my system.

Knowing these two variables will allow you to maximize your profits through proper position sizing for X starting capital.
  • #49
  • Jul 21, 2011 3:12pm Jul 21, 2011 3:12pm
Quoting monkey@forex
why the heck do people look at making the millions from forex...honestly...

why not just pay off the mortgage? why not just double your annual income? each of these steps will lead to less worry, more spending power, better lifestyle...you might then have spare cash to put into property, stocks, bonds, whatever you fancy...if you triple your average annual income, thats far better than what average joe may ever achieve...

so dont think i wish to make 1% a day, id say make what you make in a month, then try and double/triple that, then decide...
Exactly, and if you can double your money each year for 10 years, you will be at a million dollars, if you start with 1000$. I rather go for slow but consistently.
  • #50
  • Jul 21, 2011 3:45pm Jul 21, 2011 3:45pm
Quoting Custos
Exactly, and if you can double your money each year for 10 years, you will be at a million dollars, if you start with 1000$. I rather go for slow but consistently.
If a trader could consistently double his money each year, his Forex broker would notice and soon he would have Soros, Warren Buffet, Bill Gates, the CEO of every major bank and just about every hedge fund in the world (not to mention his own broker) banging at his door non stop and begging him to trade their money.
  • #51
  • Jul 21, 2011 3:54pm Jul 21, 2011 3:54pm
Quoting mr_breakout
You are asking the wrong questions. The real question is : what is the average monthly return on investment (ROI) of my trading system, period. And more importantly, what is the maximum drawdown of my system.

Knowing these two variables will allow you to maximize your profits through proper position sizing for X starting capital.
wow. so you copied what custos literally JUST said? that's your plan? what you said is OBVIOUS AND GOES WITHOUT SAYING. but just because you can't get any better than what you get doesn't mean nobody else can do much better than you or custos. i can't bake a cake, so does this mean no one can? flawed reasoning does not a proof make! you might suffer major drawdowns, but that doesn't mean everyone else will.

Quoting Custos
no, maybe you didn't understand my example correctly. I was saying the trader only compounds from $1000 to $ 1 million. And that is already a 100,000%. I didn't say about anything above 1 million. I just believe it can't be done in a year. My personal belief.
no i didn't understand it now that you have rephrased it.

look at it this way. i just quickly worked-out what $1000 compounded at 1% per day is after 200 days. i don't actually know how many trading days there are in a year, but i figure 200 is surely close enough if not even on the low side. by my possibly broken math i got $7,316 plus change.... which is nowhere in the vicinity of a million! but because $7k is 700% of $1k you don't consider it feasible. multiple trades each and every day x 200 trading days and this seems unreasonable? if it was more like $1.2k ending capital then that would satisfy the low gain expectation, right?

if my math is wrong let me know. i don't see how it could be though.

the things is this... i have no doubt you have your EA running and making you x% a year. but if i'm not mistaken you also mention somewhere your tests revealed a 50% drawdown somewhere along the way. do you think everyone would, could, or should cop a 50% drawdown? do you think there are traders out there who manage their risk differently and couldn't fathom ever reaching a half-capital loss at any point in time?

i personally couldn't imagine someone trading intraday ever reaching the point where they have a 50% drawdown. if they only risk a very small percentage per trade and after experiencing a series of x wins and y losses that finally resulted in a 50% drawdown then how many trades would they have had to have gone through each and every day after day after day to get to that point? i would imagine a LOT. that would probably be a lot of breaking even at points, and then a drop in capital, some minor gains, and then more dropping of capital, over and over and over until finally hitting a 50% capital loss.

on one hand you can't see how 1% a day gain is possible for a trader risking less than this per trade and making multiple trades each day, but on the other hand you will accept a 50% drawdown. honestly, i personally can't grasp how this would be considered acceptable. the numbers just don't work in my mind.

if someone was expecting, and reaching, a 50% drawdown then of course they shouldn't expect to get large gains on the flipside. the capital volatility is simply too large to sustain large gains without busting.

it's like bowling. you get crap bowlers who mostly gutter-ball and can't get a strike, ever, and then you have pro bowlers who can strike-out time after time to a high percentage of time. the pro's win the tournaments. the amateurs don't and play for the kicks. chalk and cheese.

custos : you replied to monkey@forex as though he was agreeing with your perspective of excessive gains being IMPOSSIBLE. try re-reading it from a different perspective. re-read his post with the perspective, similar to what i have been saying, of not everyone wants or needs to make a gazillion and is happy to breach a level of wealth and maintain that level of success. not everyone is out to beat buffet and soros... some people just want to be able to live a comfortable life, and having the ability to generate large amounts of capital doesn't mean that they have to always be at peak performance and always pushing to higher and higher capital levels and having to deal with liquidity issues and the stresses involved in all of this. that's just asking for burnout and being miserable and stressed.

you either see it, or you don't. you are either growing capital, or you are maintaining capital and living a lifestyle within the means of the skimmed profits.
Congratulations ScalaFX for coming out of the closet!
  • #52
  • Edited 4:22pm Jul 21, 2011 3:59pm | Edited 4:22pm
My good friend made from $3K in 2 years $1 mln. So good luck !!!!!!!!
Just one thing, every 500, and 5000 after you increase the volume. just calculate, from 1000 take 0.1, from 1500 0.15, from 2000 0.2, 10K gives you $1. And keep going. Ok I am done here. I made today 15% on euro, it is good enough for me to start my weekend right now, going to martha's vineyard. People have fun and be happy !!!!!!
  • #53
  • Jul 21, 2011 4:05pm Jul 21, 2011 4:05pm
all of this nonsense is predicated on the expectation of large drawdowns and little gains.

what about people who manage to experience minimal drawdowns and large gains? impossible you say. surely impossible! ok. each to their own.

custos if i'm right about your 50% dd then what you say all makes perfect sense. but have you considered the possibility that a professional trader would never reach a 50% drawdown? 1000 trades resulting in a 50% dd does not a profitable system / method make!

take away the DD aspect and you can see that it's all very possible. a 100 pip gain on 1 lot for a trader with $100k in their account is exactly the same dollar gain as a 100 pip gain on 1 lot for a trader with a billion in their account. the percentage gains will be different, but who cares if neither will bust-out?

every so often the fabled hedge fund trading gods get mentioned. their % gains are the benchmark set for everyone according to some people here. if hedge fund ABC only makes 15% gain in 2010 then surely no one else in the trading world could have made more than 15%.... but if we should aspire to only make around 15% or UNDER then do you also believe that at any point a trader in ABC hedge fund would be permitted to lose half of their capital? i don't know the answer, but my intuition tells me they would be booted out of the door or put in jail or found on the bottom of a lake with a brick tied to their foot.

this just doesn't make sense to me. please, someone explain it to me. why model our gains based on the gains of a hedge fund that a) has capital beyond the realm of our imagination to put into the market, b) would suffer liquidity issues we will never know or appreciate, and c) would never EVER tolerate DD's considered to be normal by some here? ABC surely wouldn't risk 50% to make 15% over a year. SURELY!!!
Congratulations ScalaFX for coming out of the closet!
  • #54
  • Jul 21, 2011 4:17pm Jul 21, 2011 4:17pm
Quoting nubcake
wow. so you copied what custos literally JUST said? that's your plan? what you said is OBVIOUS AND GOES WITHOUT SAYING. but just because you can't get any better than what you get doesn't mean nobody else can do much better than you or custos. i can't bake a cake, so does this mean no one can? flawed reasoning does not a proof make! you might suffer major drawdowns, but that doesn't mean everyone else will.
Nubcake, you might consider taking a few aspirins and getting some rest.
  • #55
  • Edited 4:37pm Jul 21, 2011 4:23pm | Edited 4:37pm
Quoting monkey@forex
....why not just pay off the mortgage? why not just double your annual income? each of these steps will lead to less worry, more spending power, better lifestyle...you might then have spare cash to put into property, stocks, bonds, whatever you fancy...if you triple your average annual income, thats far better than what average joe may ever achieve.
Exactly!! I have found that by looking at the smaller picture, my motivation stays very high. I make $400 per month, well, that's like having a free car. Add an additional $250 per month, that's a free boat. Add another $1200 and you got a free house. I am one of those that has to actually see the money I make put to use on something tangible, or it is hard for me to stay motivated to put in the time. People just don't realize that if you work at paying all your bills off, you don't NEED a million bucks to really enjoy the spoils of your labor!!

My thoughts, anyway....
  • #56
  • Jul 21, 2011 4:28pm Jul 21, 2011 4:28pm
Quoting Mr Breakout
If a trader could consistently double his money each year, his Forex broker would notice and soon he would have Soros, Warren Buffet, Bill Gates, the CEO of every major bank and just about every hedge fund in the world (not to mention his own broker) banging at his door non stop and begging him to trade their money.
yep, was just an example.
  • #57
  • Jul 21, 2011 4:38pm Jul 21, 2011 4:38pm
in the world of probability, anything is possible, from $1000 you might make a million dollars first year...or it might take you 10years or 100 years, all depends on your dedication/devotion and experience/learning curve...

but rather than sitting here talking about it, i suggest you plan how you wish to make it happen and test that plan...

if you are expecting people on this site to show you the way, their accounts, their methods of success...then WAKE UP...traders who have made their millions are not gonna be here, theyre with their families or escorts...

the key thing in life is time...if you have money to buy time, that time can be used to write a book like JK Rowling wrote the Harry potter series, 7 books has netted her £600 million...or you could come up with a product like Dyson...or anything...

or if you're a good enough trader, show ur worth to the big banks and if they hire you, you could use their money to make your millions...
  • #58
  • Jul 21, 2011 4:39pm Jul 21, 2011 4:39pm
Quoting nubcake
look at it this way. i just quickly worked-out what $1000 compounded at 1% per day is after 200 days. i don't actually know how many trading days there are in a year, but i figure 200 is surely close enough if not even on the low side. by my possibly broken math i got $7,316 plus change.... which is nowhere in the vicinity of a million! but because $7k is 700% of $1k you don't consider it feasible. multiple trades each and every day x 200 trading days and this seems unreasonable? if it was more like $1.2k ending capital then that would satisfy...
well, if you can pull it off, then great for you. I personally haven't found a way to consistently get anything close to 700%.


Quoting nubcake
the things is this... i have no doubt you have your EA running and making you x% a year. but if i'm not mistaken you also mention somewhere your tests revealed a 50% drawdown somewhere along the way. do you think everyone would, could, or should cop a 50% drawdown? do you think there are traders out there who manage their risk differently and couldn't fathom ever reaching a half-capital loss at any point in time?
the 50% was just an example. Drawdown is actually a function of your position size per trade. I try to stay at a max drawdown figure of exactly 30%. Yes, very likely there are some who have lower drawdowns. But you know I have become so "realistic" over time, that I only believe what I personally can prove to me. Too many people just talk so much crap, and I don't believe them anymore, unless I can somehow see a proof of that claim.


Quoting nubcake
i personally couldn't imagine someone trading intraday ever reaching the point where they have a 50% drawdown. if they only risk a very small percentage per trade and after experiencing a series of x wins and y losses that finally resulted in a 50% drawdown then how many trades would they have had to have gone through each and every day after day after day to get to that point? i would imagine a LOT. that would probably be a lot of breaking even at points, and then a drop in capital, some minor gains, and then more dropping of capital, over and...
all your other points are irrelevant, since the figure I gave was just an example and can be accustomed to individual risk profiles by changing percentage lot size.

Quoting nubcake
custos : you replied to monkey@forex as though he was agreeing with your perspective of excessive gains being IMPOSSIBLE. try re-reading it from a different perspective. re-read his post with the perspective, similar to what i have been saying, of not everyone wants or needs to make a gazillion and is happy to breach a level of wealth and maintain that level of success. not everyone is out to beat buffet and soros... some people just want to be able to live a comfortable life, and having the ability to generate large amounts of capital doesn't...
as I said, I hope you find a good way to make insane amounts of money (and teach me then), but till now I am happy with making my yearly percentage, cause I personally have not been able to achieve 1000% + a year yet.

cheers
  • #59
  • Jul 21, 2011 4:46pm Jul 21, 2011 4:46pm
monkey golden words !!!!!!!!!!!!!!! Just listen to him !!!!!!!!!! Just take a look on THV system or Sonic, i am trading this systems bymyself. Thv system has 16 years of history, why do you think people still trading this system. Thanks a lot to Miss Pips and Cobra, this people did a lot for us, for you guys, just open and read.
  • #60
  • Jul 21, 2011 4:52pm Jul 21, 2011 4:52pm
Quoting nubcake
every so often the fabled hedge fund trading gods get mentioned. their % gains are the benchmark set for everyone according to some people here. if hedge fund ABC only makes 15% gain in 2010 then surely no one else in the trading world could have made more than 15%.... but if we should aspire to only make around 15% or UNDER then do you also believe that at any point a trader in ABC hedge fund would be permitted to lose half of their capital? i don't know the answer, but my intuition tells me they would be booted out of the door or put in jail...
the hedge fund gods are mentioned cause they are the experts in trading the markets.
Personally, I always have an affinity to trust that experts in the field always have the highest ability in general for their specific field. Lawyers know law best, medical professionals know medicine best, engineers know how to construct machines the best and so on. Normally you wouldn't expect that amateurs would be better than those experts in their field.

Well, and to be honest, we were never trained in trading, we don't have the same background and resources like the hedge fund guys. They are the experts, we are the amateurs. I think we are lucky if we can emulate their performances. And very lucky if we can be better than them.

Anyways, there are obviously the occasional few people that outperform experts by a mile, but they are only a few, I think. Would be crazy if the majority of amateurs can trade better than the professional fund managers.

Just my opinion. I am going to bed, gonna reply you tomorrow, if you have some more posts to come.

cheers

(but I really enjoy these discussions, challenging for both sides)
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