What is your monthly target?

You can achieve 10% a month if you can manage to make 200 pips a month and never risking more than 3% of your account per trade. It's all about consistancy and discipline to wait for the very best set ups. Those less-than-optimum entries are what jeopardize the end-of-the-month results. Just be disciplined and patient to avoid taking them. Do not try to gank 1000 pips in a month, trading is not about that. Trading is about being conservative and aiming for realistic goals in a CONSISTANT fashion. If you are consistant in your profits, even if it's just 200 pips a month, compounding will make you rich over the years.

[As the accounts grow in equity, I haven't modified the lot size so i can cover more market range....so really, my weekly % would drop every week as the equity grows. Sounds weird, but that's how it works out.[/quote]

I found this part interesting. How can you do this with one pair? Can you explain?

Thanks.

Johnny

I found this part interesting. How can you do this with one pair? Can you explain?

Thanks.

Johnny[/quote]

Johnny, here's the most simple math example I can think of that should hopefully explain what he's talking about:

Let's say Mudd starts with $10,000 in his account, and his trades net him $500 in profit each trade and he makes three good trades a week. That's $1500 a week. So his account is now at $11,500 at the end of the first week. Let's say he continues this way for a month, so he finishes the month at $16,000 in his account.

When he started, the first week's net profit was 15% of his account size. The second week it shrank to 11%. The third week had the profit percentage drop to 10%. And finally, on the end of the fourth week, it dropped to just over 9%.

He's still making the same amount of money each week, but the total percentage that he makes compared to his total capital pool shrinks each week (if he doesn't take any money out of course; which we didn't, to simplify the example).

Hopefully that makes sense, if not, let me know.

I've done 474 pips in 13 trading days this month, i dont use leverage or stops, unless they are trailing stops to lock in profit.

i dont feel the need to state % or how much i've made, but i'm doing nicely.

Johnny, here's the most simple math example I can think of that should hopefully explain what he's talking about:

Let's say Mudd starts with $10,000 in his account, and his trades net him $500 in profit each trade and he makes three good trades a week. That's $1500 a week. So his account is now at $11,500 at the end of the first week. Let's say he continues this way for a month, so he finishes the month at $16,000 in his account.

When he started, the first week's net profit was 15% of his account size. The second week it shrank to 11%. The third week had the profit percentage drop to 10%. And finally, on the end of the fourth week, it dropped to just over 9%.

He's still making the same amount of money each week, but the total percentage that he makes compared to his total capital pool shrinks each week (if he doesn't take any money out of course; which we didn't, to simplify the example).

Hopefully that makes sense, if not, let me know.[/quote]

Hollis

Got it. Thanks.

My goal is 10% of account/month average. I have been consistant since december. Sometimes I make more sometimes less. I have found for me if I aim lower I take less risk and than beat my goals.

Mike

By risking 1% per trade and 10% for all trades at any time. I'm not planning to live from my FX trading soon. Actually by latest move I grove my test account from $3000 to $9000. Wich show that one or two good catched moves you can make your day and pay for small initial losses (with 1% risk per trade).

Well I netted 45 pips in my first week of live trading. With any luck, it will go up from here. I will be happy as long as each month is in positive territory.

Wow, I truly am impressed with everyone's profits and monthly targets! Well done mates, congratulations!!!

I started off in FOREX about 5 months ago. In first 3 weeks I lost 30% of my equity. Then I took a week off to figure out what went wrong and why I had lost so much initially.

Here is a quick list of the factors that made me lose at the beginning of my trading career:

- very rigid and unflexible trading strategy. One example would basically sum this up: in late November I went short on EURUSD. My fixed TP was 150 pips and my stop loss was 50 pips. The trade moved my way nicely, it moved around 120 in my favor before it turned around and hit my stop loss. In this trade I allowed the market to move 120+50= 170 pips against me!!! Even worse, I had 120 pips in my pocket and didnt cash in any of them.

- inexperience. I had never traded live, so I was due to lose my virginity at some point.

- Unstable trading system. During the research process I went thru before going live, I set yearly targets of 5000+ pips and only bothered to find a way to get those damned pips. What i completely overlooked was STABILITY. A sound trading strategy doesnt necessarily have to produce thousands of pips to make money. I figured that there just isnt anything that can produce lots of pips and keep you stable at the same time. If you guys take a look at charts, whether you take dailys, hourlys, 15mins or whatever, there just arent many good trading opportunities out there to make money. Most of the days are ranging days where markets make a lot noisy without moving anywhere. A stable system must keep you out of some of those meaningless days. DRAWDOWN is something nobody has spoken about in this thread.

Whats your max acceptable drawdown fellas? Of course, it depends on your risk profile. There may be some of you out there who dont even know what a drawdown is and they probably dont wanna know anyway.

I believe that those who aim at trading for a living should have a max drawdown no higher than 10-15%.

Just make your calculations. If you have a 10% drawdown, it takes a 11.11% performance to get back to the where your drawdown had started. 20% drawdown would take a 25% performance. 40% dd would need a 66.67% return and so forth...

As you can clearly see, the higher the drawdown the more difficult it gets to get back to even.

This is why most of the best trading systems in the world have very realistic expectations such as 30-75% return per year, with 1 to 2% risk per trade and leverage no higher than 1:4.

Keep in mind that what saved my ass big time was money management and discipline. I didnt risk more than 3% per trade and had very good discipline in taking losses. I believe I lost something like 12 out of my first 15 initial trades during my 30% loss stretch.

Right now I am risking 1.75% per trade and my max drawdown has been no more than 8% over the last 4 months.

- Too many currency pairs. In November I started off trading 5-6 pairs. What I utterly underestimated was the whole risk management implication of trading so many pairs.

All but one pair, EURJPY, were dollar correlated. So lets say my system would signal 1 setup for 4 pairs at the same time, i would need to open 4 positions and take all trades. Wow, if all trades go my way I am gonna make a lot of pips here! That's how I felt about it in the beginning. I also felt a relieving psychological advantage in taking 3-4 different positions at the same time as hell at least 1 or 2 will go my way right?

Wrong. If you go long EURUSD and GBPUSD and short USDJPY you are betting against the dollar, you are exposed 3 times against the dollar. If the dollar appreciates and your guess is wrong, all of your positions will likely be stopped out and you will lose 3 trades.

Although EURUSD, GBPUSD and USDJPY dont move hand-to-hand all the time, I challenge all of you to show me a weekly FOREX chart were EURUSD rises by 200 pips and GBPUSD falls 300 pips. Whenever the underlying currency pair is correlated to the dollar, the pair will be very sensible to dollar appreciation/depreciation.

I found USDCAD being somehow independent. I discarded GBPJPY and other minor crosses due to very high spreads.

Right now I am only trading the EURUSD. I dont care about all those pips that i could make in all those other currencies. The majors are too much correlated to each other, so i much rather double up my contracts on EURUSD than trading all of them at the same time if I need more pips to survive.

Last weekend I just completed refining my trading strategy and I am now ready to face the remaining 7 months of the year to get back to even.

I would be very happy to finish the year at breakeven point.

I now have a very stable system that averages 1 trade per day, my average winner is 40 pips, average loser 21, max drawdown 8-10% and 90% expectancy of being profitable every month.

Consistency and stability is what builds your bankroll.

Here are rough results of my system for 2006:

January: +300

February: +30

March: +100

April: +50

May: +300

This system has produced roughly 700 pips over the last 5 months, which averages down to 140 pips per month.

I would be the happiest man if things stayed the same for the rest of the year.

When I read that some of you out there can make twice as many pips in a month than what i can make in one full year, i am both amazed and confused.

Whats the price you are willing to pay to make so many pips?

With this I by no means intend to be critical on your systems. I am just wondering how can someone make 1,000s of pips every month without ever having drawdowns...

Seriously, if you really are making all those pips consistently, within 5 years you'd be richer than warren buffet if you use decent money management.

In conclusion, i find it impossible to have a monthly target. My monthly pips depend on what the market wants to give me. It's very difficult if not impossible to have consistent profits in this business.

Just take the month of February and compare it to May. At some point in mid February, I believe from Feb7 thru 14, the EURUSD was averaging 50-60 pips daily ranges with no trend.

Unless you trade off a 5min chart and have 10-15 pips targets, it would be impossible to be making money within such a close range. In fact, thats when i had 8% drawdown.

I hope my long post has helped people who, like myself a few months ago, are about to or have just started trading FOREX.

My suggestion for the first 6 months is: trade small, watch the markets 10-12 hrs per day, learn, take notes, and try to find all the loopholes of your trading system.

My monthly target, hmmm, let's see "to do all that is necessary and practical to become a successful FOREX Trader"


Two major points to define there; What is all that is necessary and practical?

Get a mentor or two, or more - and listen to what they say
Read up on the subject
Take note of all the money management, account management, risk management advice

Work on eliminating fear of loss

Work on eliminating the 'take profit NOW' problem

Look at several systems and choose one I am happy with

Work at 'patience' lengthen my time frames if required.

Only trade to my own enter/exit rules, exercise discipline

(I am sure the folks here can correct, add and amend)!

Then what is success? For me that would mean earning a good living from my trading endeavours, sufficient to allow holidays even and to consistent enough that I would feel as confident as many here do, to advise any friend in need.

An experienced trader could identify that situation and pull close to that range in a couple of trades.
A 50-60 pip range rocks and is quite tradable if you are experienced enough to adapt to the different moods of the market.

...Or one way to deal with that situation is to install a rules within your methods that specify lay days etc:

"3 losing trades with this method and I get out for the day"

or even

"2 Days of losing trades and I stay out till next week"

...rules like this are a great way to minimise draw downs due to you being out of sync with the market.

Did you have previous experience with other types of trading (futures, equity, options)?

What was your approach? How did you manage to reach 100 pips/month? Did you take specific training?

Thanks,

Do you really reach that goal? What is your approach? (technical, fundamental, mechanical)

The problem with months like February is that you never know when they begin and never know when they finish.

I dont believe 2 trades under average daily range would be enough to change strategy. You are talking about volatility here, how do you measure it? 2 trades would be enough, are you sure?

Every month there are quiet days where the markets dont do much. Those are just the times where you either are fortunate to stay out of it, or you just take your losses and move on.

Changing strategy very quickly can translate in total disaster long term. Systems need consistency and stability, how can you be consistent if it takes only 2 trades to make adjustments?

Only way I can think of adjusting to new daily ranges would be after a long period of time where the market has been very quiet.

Lets say EURUSD currently is averaging 100 pips per day. I dont think 2 consecutive 50-60 pips-range days would demand adjustments.

Maybe 6 months of lower daily ranges could lead me to consider making adjustments, not a couple of trades.

I just checked my trades in relation to your set of suggestions.

During my drawdown I never had more than 2 losing trades in the same day.

The only instance where I had 3 consecutive losing days was in mid february. Then, had I quit for the week i would have missed out on the only TP the follwing day.

With this I do not mean to discredit your advice. I appreciate it, even I had considered something similar during the drawdown.

Nevertheless, my experience taught me that markets are wild animals and are just unpredictable. You never know when the big trades come around, so you have to be there every day and follow your strategy.

What if you have say 4 losing days and decide to lay off on Friday and miss out on the opportunity to make up for some or even all of your losses? How you going to feel about it? How are you psychologically come back next Monday?

I truly believe that once we have created a system and tested it out, just let it run and let it do its course.

Systems dont give a damn about consecutive losers or winners.

let me ask you a question: if you have 2 consecutive winning days, would you just lay off the rest of the week in order not to give your profits?

Or if the market goes bananas and averages 200 pips per day, would you immediately make adjustments and tweak your system accordingly?

Right now, the only way I am aware of to avoid big drawdowns is thru proper money management.

Every system will go thru bad streaks and only good management can make it survive thru it.

100 pips/week. But any profitable week is a good week.

It's a modest goal -- as my skills improves I'm sure my pip goal will too. Consistency is the key.

I've only been trading FX one year, and only live since February.

I took a Rob Booker live seminar six weeks ago. Since then I've been profitable every week, averaging about 200 pips/week.

J

How many hours per day do you work on Forex?

I agree with Rusty on that. Full time requires larger pip gain or heavy stakes. I go for pip gain myself and keep the stakes very low.

800 a month is EASY. Yes, I said easy. So everyone out there who struggles to achieve 10 a day or 25 a week or whatever number it is you choose; YOU CAN DO MORE!

I get up at 3:30 AM EST for the EURO session and trade through to 11:00 AM EST and sometimes later till 3:30 PM. So for me it's a full time and a half; but not for much longer.

Making a living from Forex is easy. But it requires extra dedication outside of the normal 8 hour work day and sometimes in addition to the 8 hour day work day for the man.

Thanks very much for your great post. It was probably one of the most realistic posts I read in this thread. I wish you luck and more success.

Mudd, can you divulge what technique you use to trade so often? The problem I have had (and I am relatively new to forex) is managing my time. By this I mean finding a technique that I can use on an intraday basis, that I wont lose half my account using.

Ive followed the techniques on 4H and above timeframes, but I find it not time consuming enough. I have 8 hours a day to trade forex right now, and I feel I am selling myself short my using such a slow moving chart, even though I hear this is the only way for a new person to start.

I need a consistant strategy that I can actually trade for hours at a time, instead of place one trade every 3 days. You know what I mean?

By the way, 10 pips a day would be a nice goal for me!

By the way, excellent posts.
That first one was particularly good

To clarify I'm not talking about going by average daily ranges. Or even changing methods over time. I'd rather react on a daily basis.

To explain...

The way I approach a day is, I suppose, by presuming every day is a ranging day.

If I've sold (short) at what I decide is the likely top of a range, and it ranges, I sell at the bottom. If it fails to range and breaks it ...ta dah... we have a break of a range. A good oppurtunity to buy the break. The trade is likely to be a quick trend or, even better, a longer one. I lose my 10 pips on the reversal.

And on the rest...

You make correct points on money management and keeping stable to your system. Very important. I agree mostly with most points you've mentioned.

My system demands I get out if I have 3 consecutive losses on the day. (small losses, 10 or so pips) Under my method this means whip-sawing is likely. I get out till tommorow.

If this happened two days in a row, I'd tentively enter the third day with the mindset that I'm having a holiday if it looks like doing the same. This is pretty rare. I'd likely have a holiday anyway!

The market will always be there. I don't care if I miss a big move while I'm out.

Cheers,
Bundy