So what is your Return on Equity monthly or annual targets? | Forex Factory

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So what is your Return on Equity monthly or annual targets?

  • #1
  • First Post: Oct 13, 2015 11:06pm Oct 13, 2015 11:06pm
Just interested to know what traders are expecting as return on their equity, whether beginners, intermediate or pros.

My background:
I have been trading for 2 years, started with a compqny called Xtrade and in 1 month i was able to double my equity and more, i made 13k from only 6k and in only one day i lost it all... The broker called me that day and told me to open some trades and the SOB bet against me and so i lost it all....
I did not know or understand any of this at that time, then i started reading and trying to educate myself on how the forex world is operating.

Came back after some demos and here i am learning day by day, doing horrible mistakes and recovering.

After many ups and downs, i managed to get 10% return on my equity. Swinging from 25% and 3% at times.

I think that 20% return a year is decent considering that nothing that Real estate can give you 20% on your investment, i will be satisfied with 30% annually.

What do other traders think? Do you set a target? What is considered satisfactory for you?
  • #2
  • Oct 14, 2015 6:26am Oct 14, 2015 6:26am
30% per annum on FX trading is well... peanuts...

If you want risk free trading ...invest in Kenya 1 Year government bonds... i read its now paying 21.498% on a 365 day note...

https://www.centralbank.go.ke/index....-bill/364-days
practising coitus interruptus
  • #3
  • Oct 14, 2015 7:38pm Oct 14, 2015 7:38pm
I started my trading adventure aiming at 10% a day. Found out soon enough how hard that was and now I've been aiming at 10% a month with decent results. I feel that this target is enough for me to feel encouraged to keep up with the plan and not so much that I get forced to trade even when no opportunities arise.

And no offense... I'm not a great scholar of african economy, but I wouldn't call an african bond to be risk free... But that's just me
  • #4
  • Oct 15, 2015 2:32am Oct 15, 2015 2:32am
Quoting WalterWhite
I started my trading adventure aiming at 10% a day. Found out soon enough how hard that was and now I've been aiming at 10% a month with decent results. I feel that this target is enough for me to feel encouraged to keep up with the plan and not so much that I get forced to trade even when no opportunities arise. And no offense... I'm not a great scholar of african economy, but I wouldn't call an african bond to be risk free... But that's just me
10% is of course modest and ungreedy, but once you reach 10% you aim for 20% and you find yourself drived to go in positions too quickly and with less planning , till you start loosing your 10% gradually.
  • #5
  • Oct 15, 2015 10:38am Oct 15, 2015 10:38am
10-30% depending on the market conditions, but this is just the target. Results haven't been so great in the last couple.
  • #6
  • Oct 15, 2015 10:52am Oct 15, 2015 10:52am
Quoting ash1485
I think that 20% return a year is decent considering that nothing that Real estate can give you 20% on your investment

That's a comparison based on passive investment, I think, though? Perhaps not so much on active trading.

For an investor, a 20% annual return is brilliant, especially these days, with interest-rates as they are, internationally.

I would think most active traders treating it as a business would set their annual targets higher?


Quoting ash1485
What is considered satisfactory for you?

A steady-ish 7% per month with no losing months at all satisfies me. I look at trading as being about risk-management rather than about profit-maximisation. I'm very risk-averse. Variability is a huge issue to me, and I select all my trading-methods in an attempt to minimise it.
  • #7
  • Oct 15, 2015 11:43am Oct 15, 2015 11:43am
Quoting Xela
{quote} That's a comparison based on passive investment, I think, though? Perhaps not so much on active trading. For an investor, a 20% annual return is brilliant, especially these days, with interest-rates as they are, internationally. I would think most active traders treating it as a business would set their annual targets higher? {quote} A steady-ish 7% per month with no losing months at all satisfies me. I look at trading as being about risk-management rather than about profit-maximisation. I'm very risk-averse. Variability is a huge issue...
Yes i definitely don't mean real investors, i meant the average hard working person with limited knowldge like me and most of people here.So i think for me 20% is really good as a return.
  • #8
  • Oct 15, 2015 11:58am Oct 15, 2015 11:58am
Quoting ash1485
{quote}So i think for me 20% is really good as a return.
It's impossible to say without taking your effective leverage into consideration. If you're trading at around 100:1 effective leverage 20% absolute return on an annual basis would be actually quite poor.
  • #9
  • Oct 15, 2015 12:32pm Oct 15, 2015 12:32pm
i am looking for more pips than more dollars
focus while relaxed to see better
  • #10
  • Oct 15, 2015 12:36pm Oct 15, 2015 12:36pm
Quoting orabi
i am looking for more pips than more dollars
What are going to do with pips Oraby, you can't pay your bills with pips right
  • #11
  • Oct 15, 2015 12:46pm Oct 15, 2015 12:46pm
I always go for 5% a month, end up usually getting closer to 10-15% but I like to manage risk rather than try to see how much money I can get. After lots of experience, emotions, learning, trial and error, this is what I do. I just let it compound, no management fees, try to keep my taxes low, look to other investments etc. Not much beats trading for your self though in FX market with 2015 brokers. I mean we have it pretty good thus 100% a year should not be hard.
All posts are my personal opinion
  • #12
  • Edited 1:01pm Oct 15, 2015 12:49pm | Edited 1:01pm
Return is meaningless without reference to drawdown.

For example, if you're getting 5% ROE per month, you can make at least 10% simply by doubling your position sizes, or at least 15% by tripling them, and so on. But that will increase your drawdowns commensurately, also. That's why you need a performance history of several months, even years, to first know what your worst case drawdowns are, to be able to size your positions optimally, and thus optimize your returns.

Managing risk/drawdown should be the first priority of anybody with a serious account size, especially as it requires a subsequent gain of (100 x N)/(100 - N) % to recover from drawdown of N%.

Attached is a typical performance report of a managed fund. These gents are experienced traders, they don't set targets, they simply follow proven strategies and take whatever the market gives them. Note the monthly fluctuations, but the overall return is positive.

No offense to anybody, but amateurs on forums are easy to spot, as they are focused on returns, rather than on the business of trading as a whole.
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  • #13
  • Oct 15, 2015 12:59pm Oct 15, 2015 12:59pm
Quoting hanover
Return is meaningless without reference to drawdown. For example, if you're getting 5% ROE per month, you can make at least 10% simply by doubling your position sizes, or at least 15% by tripling them, and so on. But that will increase your drawdowns commensurately, also. That's why you need a performance history of several months, even years, to first know what your worst case drawdowns are, to be able to size your positions optimally, and thus optimize your returns. Managing risk/drawdown should be the first priority of anybody with a serious...
  • #14
  • Oct 15, 2015 1:13pm Oct 15, 2015 1:13pm
Quoting ash1485
{quote} What are going to do with pips Oraby, you can't pay your bills with pips right
HAHAHAH
if you look at banks and how they work they use very small margin but earn a lot by wining small trades and investing with solid fundamental look that what i meant and i have no worry of my bills they are not so much
have a nice day sir
focus while relaxed to see better
  • #15
  • Edited 2:13pm Oct 15, 2015 1:56pm | Edited 2:13pm
Quoting JensG
{quote} It's impossible to say without taking your effective leverage into consideration. If you're trading at around 100:1 effective leverage 20% absolute return on an annual basis would be actually quite poor.
True.. along with leverage, we should also consider the investment capital..
unlike other investments, where you'll get the interest each month, in forex, you have to trade and earn..

I would say, at least, a 50% return a month* is decent..
Dont trade like me..
  • #16
  • Last Post: Oct 16, 2015 6:58am Oct 16, 2015 6:58am
Just try to get 20 net wins per Month. If you have conistent wins , You can set your ROI effectively
Take it easy.
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