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

  • #161
  • Feb 16, 2014 11:13am Feb 16, 2014 11:13am
10 % per month is totally unrealistic. You might achieve this for one month, but then due to the risks you are taking you might loose it all within the next month. Rather build up your account with a constant effort of steady trades. The markets also differ from month to month, and you should not just try to attain a specific % as this will place you under pressure towards the end of each month and is will result in you making un-calculated decisions, which will cost you money.
  • #162
  • Feb 16, 2014 1:13pm Feb 16, 2014 1:13pm
if you can make 10% per month you would be a rock star in the hedge fund industry
  • #163
  • Edited Feb 17, 2014 2:51am Feb 16, 2014 2:15pm | Edited Feb 17, 2014 2:51am
Newbies look at this all wrongly:

1. They think that something like 1% per month should be easily achievable, but 10% should be almost impossible.

2. They assume that trading should deliver a consistent amount per day, week or month — just like a regular job.

3. They also compare retail trader returns to those made by institutions, not realizing that the latter are constrained by liquidity considerations, and by regulation, legislation etc as to what they can and can't do. Large institutions and funds play a completely different ball game.

Whereas in reality, the difficult part is finding an edge that both delivers consistent profit, and is robust enough to maintain its longevity. In other words, the main barrier is attaining any kind of positive expectancy at all. After that, you can devise a risk model (money management) to make almost any return that you wish, provided that you're willing to accept the associated drawdowns. I posted some ideas and examples here.
  • #164
  • Feb 16, 2014 4:32pm Feb 16, 2014 4:32pm
10% per month is definitely good enough, I've been live trading now for about 6 months & have been aiming for 5% a month, and even that has turned out to be hard. You need to know your exact trading ability & skill before you can be consistently profitable.
  • #165
  • Feb 16, 2014 10:24pm Feb 16, 2014 10:24pm
Quoting MapleLeaf
{quote}According to official stats performed in thousands of LIVE Accounts in FOREX BROKERS (study made by PhD John Forman): Only 0.4% of LIVE FOREX ACCOUNTS were profitable every quarter for more than a year. Thus, 99.6% are not profitable long term.
According to these stats, if you can do 1% a year your beating 994 per thousand other retail forex traders. Still better odds than trying to profit as an Amway distributor but no where near as good as winning a single spin of the roulette wheel, which is more than 200 times better.

So to answer your question, 10% per month is good enough
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  • #166
  • Feb 16, 2014 11:08pm Feb 16, 2014 11:08pm
The original poster start this question in 2008. He had found the answer and created an EA in commercial section: Consistent 10% EA.
Let's see may be throughout the years of seeking the answer, he may found it.

FREE EA too!
  • #167
  • Feb 17, 2014 3:35am Feb 17, 2014 3:35am
Quoting M.A.C.Doug
{quote} According to these stats, if you can do 1% a year your beating 994 per thousand other retail forex traders. Still better odds than trying to profit as an Amway distributor but no where near as good as winning a single spin of the roulette wheel, which is more than 200 times better. So to answer your question, 10% per month is good enough
I'm surprised someone who is supposed to have some experience and some actual gray matter, comes up with an answer like that. Unless you can live with 1 cent per year, 1 dollar per year, heck even with 1000 dollars per year. You can't. Make sure to check my bet, where I challenge people to prove if someone can do a living in forex for a year. Out of 10,000 active members from this forum, nobody could take the challenge.

And BTW you may be angry about the new regulations forcing RETAIL BROKERS to release their official stats. People can actually see the truth.

99.6% of people lose money in FOREX.


Quoting JomSuccess
The original poster start this question in 2008. He had found the answer and created an EA in commercial section: Consistent 10% EA. Let's see may be throughout the years of seeking the answer, he may found it. FREE EA too!
And why do you think he posted it in the "COMMERCIAL" section ? If he is doing so much money, why would he need to sell his EA?

Oh my, I'm just shocked on how people don't use their brain. I'm not asking for people to be supreme minds, but at least use basic common sense.

Unless you are the OP's alter ego or friend helping him in promotion.
The Black Swan: The Impact of the Highly Improbable
  • #168
  • Feb 17, 2014 7:53am Feb 17, 2014 7:53am
Quoting hanover
, you can devise a risk model (money management) to make almost any return that you wish, provided that you're willing to accept the associated drawdowns.
Totally Agree
  • #169
  • Edited 11:13am Feb 17, 2014 10:25am | Edited 11:13am
[quote=MapleLeaf;7285901]{quote} I'm surprised someone who is supposed to have some experience and some actual gray matter, comes up with an answer like that. Unless you can live with 1 cent per year, 1 dollar per year, heck even with 1000 dollars per year. You can't. Make sure to check my bet, where I challenge people to prove if someone can do a living in forex for a year. Out of 10,000 active members from this forum, nobody could take the challenge. And BTW you may be angry about the new regulations forcing RETAIL BROKERS to release their official stats. People can actually see the truth. 99.6% of people lose money in FOREX. {quote}

Im not sure why you criticise my comment. We seem to be in agreement. The op asks about 10% per month and I used stats which I believe to be accurate, to offer a reality check, what is so wrong with that?

I like your bet. I believe it will stand unchallenged. I gave up arguing with all the 10% per month/week/day people on here some time ago cause I got called a negative prick for asking for proof of their claims. I was just trying to help, unrealistic expectations is the main account killer but people seem to prefer ridiculous fantasy to facts. Now I just let them learn the lessons the hard way, like I did
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  • #170
  • Feb 17, 2014 6:09pm Feb 17, 2014 6:09pm
You wont be able to generate consistent 10% return
  • #171
  • Feb 18, 2014 2:08am Feb 18, 2014 2:08am
Quoting akukaya
I have a friend who thinking that in forex market, since the risk is high, the return should be high too. any opinion guys whether return of consistent 10% per month is good enough in Forex with start account of USD100. Just would like to listen from experience traders here.
hmmmm someone make 100- 9000% look in trades tab...that mean 10% is too small
"Trap The RED News"
  • #172
  • Feb 18, 2014 2:32am Feb 18, 2014 2:32am
I don't get it. We see that strategies work yet there are so few profitable traders. Something is missing from the bigger picture...
  • #173
  • Feb 19, 2014 5:01am Feb 19, 2014 5:01am
Quoting Vitez
I don't get it. We see that strategies work yet there are so few profitable traders. Something is missing from the bigger picture...
psychology

"trading is 90% psychological, the other 10% is in your head"

How many traders are doing any work at all in this area?
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  • #174
  • Edited 7:58pm Feb 19, 2014 6:11am | Edited 7:58pm
Quoting Vitez
We see that strategies work......
I wonder how many of the strategies in the Trading Systems forum have actually been tested over several hundred trades, and many years of changing markets.
Or put another way, how many of these strategies are robust enough to maintain their current level of profitability, 5 years from now?

Quoting M.A.C.Doug
{quote} psychology "trading is 90% psychological, the other 10% is in your head" How many traders are doing any work at all in this area?
But if method was 0% relevant, then every EA would be profitable.
And random entries and exits, traded with perfect discipline, would likewise be profitable; but that is not only clearly false (random entries and exits = no possible edge), but also oxymoronic (because any kind of undisciplined trading is effectively random!).

If we have no method, then we have no framework to remain disciplined to; psychology becomes irrelevant. Hence if trading is 0% method, then it's 0% psychology also. LOL

Another angle: perhaps it depends on approach. For the mechanical trader, success depends primarily on method; for the discretionary trader, psychology becomes a bigger factor. For example, here's Merlin's view on the subject; it seems from his comments that his approach is highly mechanical.

So which is more important?
--- If the method is unprofitable, then no amount of discipline, tenacity or positive thinking will make it profitable.
--- But on the other hand, a profitable method is effectively worthless if the trader's faulty mindset prevents him from trading it consistently.
Hence method is 100% important; psychology is 100% important. Each is symbiotically dependent on the performance of the other.

Or yet another possible angle:
Three prerequisites to profitable trading:
#1. Basic method (strategy) — enter on a suitable combo of indicators and/or 'price action'; exit likewise when a given set of conditions exist
#2. Discretionary nuances — the ability to discern visual patterns, apply contextual filters, weigh up apparently conflicting TA and/or FA based factors, adapt rules to suit changing market conditions, avoid or exploit news, etc
#3. Psychology — having the patience, self-belief, nerve and discipline necessary to implement a strategy consistently
Now:
--- A good human trader can easily implement #1, can develop #2 after years of practise and chart study, but is always vulnerable to #3
--- Whereas an EA nails #1 and #3 by default, but lacks the intelligence to apply #2
So, to whatever extent proficient human traders outperform even the best EAs, it seems to suggest that #2 is more important than #3.

I posted some more in-depth thoughts about trading psychology here.

I'm not saying that I'm right...... just offering some ideas that I think are worth pondering.

Quoting hanover
Newbies look at this all wrongly: 1. They think that something like 1% per month should be easily achievable, but 10% should be almost impossible. ....... you can devise a risk model (money management) to make almost any return that you wish, provided that you're willing to accept the associated drawdowns.
Just to clarify: what I'm saying is that if 1% monthly return is possible, then 10% monthly return is equally possible, provided that the account (and the trader) can withstand the increased drawdown.
  • #175
  • Feb 19, 2014 8:44am Feb 19, 2014 8:44am
It depends on the equity... when i stared reading this thread i saw someone saying 10% on $100 account will not even pay your internet bill well that's true BUT if a trader makes 1% CONSISTENT profit every month on whatever the equity then he should be appreciated.
  • #176
  • Feb 19, 2014 10:23am Feb 19, 2014 10:23am
As usual Hanover's posts are of great value. Those less experienced would do well to take the time reading.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #177
  • Feb 20, 2014 1:14am Feb 20, 2014 1:14am
Quoting hanover
{quote} . Hence method is 100% important; psychology is 100% important.
My reply was to someone asking about why there are so many profitable strategies but so few profitable traders. I dont disagree about the importance of method but that was not the context of my reply. The 100% psychology quote is just a meme but it serves well to make my point. I believe traders fail mostly due to psychological reasons. If they are using a method that has no chance of profitability that can also, be the result of the individuals mindset, making psychology 100% to blame for the lack of success
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  • #178
  • Edited 2:09pm Feb 20, 2014 4:46am | Edited 2:09pm
Quoting M.A.C.Doug
{quote} My reply was to someone asking about why there are so many profitable strategies but so few profitable traders. I dont disagree about the importance of method but that was not the context of my reply. The 100% psychology quote is just a meme but it serves well to make my point. I believe traders fail mostly due to psychological reasons. If they are using a method that has no chance of profitability that can also, be the result of the individuals mindset, making psychology 100% to blame for the lack of success
Understood. I likewise believe that psychology is crucial, but I suspect that a great many newbies fail before they even get to that point. They have a couple of profitable months, and they believe that their strategy will continue to work forever.

I understand that some people see devising a strategy as being part of the overall trader mindset, but I like to make a clear distinction between method and implementation, because (for me, anyway) it's important to know where any source of failure lies, i.e. whether the method itself is unprofitable (in which case I need to overhaul the rules/concepts involved, or reassess my understanding of how markets operate); or whether the method is sound, but I'm failing to follow the rules/concepts due to psychological foibles (fear, greed, impatience, ill-discipline, etc). Then I know which of the two areas I need to work on, the 'academic' processes or the emotional.
  • #179
  • Feb 20, 2014 7:25am Feb 20, 2014 7:25am
Quoting hanover
... So, to whatever extent proficient human traders outperform even the best EAs, it seems to suggest that #2 is more important than #3
I agree with all said but would like to ponder a bit...

There is one parameter to add which can alter human judgement over time and less a mechanical trading system which is time itself.

So, how long a human could be able to consistently outperform the best EAs before sabotaging itself sooner or later ? And I'm not talking about months but years...

I finally think like Merlin, people go discretionary because a system is very difficult to find or implement and you won't find such a thing here on FF showing you 5-6 years of back-tests with several hundreds of trades and terminating with a decent profit.

So mechanical is in my opinion the only way to go.
Simplicity is the Ultimate Sophistication.
  • #180
  • Edited 4:12pm Feb 20, 2014 2:08pm | Edited 4:12pm
Quoting broketrader
So, how long a human could be able to consistently outperform the best EAs before sabotaging itself sooner or later ? And I'm not talking about months but years...
I think that if a trader has a real edge, then he'd be less likely to sabotage himself the longer he trades, because his confidence in himself and his method would grow. I know a couple of traders who have been profitable for more than 5 years, and for them each new day is just like another day at the office: apply the same analysis techniques, make the same entries and exits, and bank their profits (and occasional losses). One of them told me that his biggest worry is that on the occasions when he does have a sequence of losses, is trying to determine whether it's merely a statistical aberration, or whether his method needs adjustment.

However, what you say could easily be true for some people. After all, everybody is different.
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