Quick Question for Experienced Traders

[electroniclocal]

If you have a real edge that has resulted in consistent profitability then your goal is achievable. Its a matter of discipline. I wrote a piece in my blog on this that you may find useful. I am teaching my daughter to trade and the blog is our record. Nothing for sale, no ads, just trying to help.
http://electroniclocal.blogspot.com/2009/11/trading-is-my-business-it-can-be-yours.html
[/I]

Just an idea, not sure if it's an old one, or a naive one but I'd like to hear some thoughts on it. I'm new to trading, and am still learning the ropes but I was thinking about this possibility, perhaps as a goal to work towards in terms of consistency and skill.

Are there any traders here who can consistently grow their accounts by 4% in a day? This doesn't seem like too huge a figure... am I wrong? If you can do this all 5 days of the week, and get a 20% profit at the end of it, regularly, great.

If you start with £1000, and can make 4%, £40 a day, at the end of the week the account has grown 20% to £1200. If, using the same risk/profit ratios you used to get that £40 a day were kept in place and applied to the larger, £1200 account, and you continued to compound profits whilst keeping in place the profit/risk ratios you use, am I right in thinking that it would take less than a year to reach £1million? I'm sure if you're experienced traders you'd all be able to calculate the figures yourselves, but for my excitement I like to watch the numbers grow (week by week) and so will post them here.

Jan
£1000
£1200
£1440
£1728
Feb
£2073.60
£2488.32
£2985.98
£3583.18
Mar
£4299.81
£5159.78
£6191.73
£7430.08
April
£8916.10
£10699.32
£12839.18
£15407.02
May
£18488.42
£22186.11
£26623.33
£31947.99
June
£38337.59
£46005.11
£55206.14
£66247.37
July
£79496.84
£95396.21
£114475.45
£137370.55
August
£164844.66
£197813.59
£237376.31
£284851.57
September
£341821.89
£410186.27
£492223.52
£590668.22
October
£708801.87
£850562.24
£1020674.69

By the end of the year, the total amount would be £6319748.71.

Now!

I am a realistic person, and am bracing myself for a bubble popping. I know trading doesn't occur EVERY single week, and some losses are to be expected but it's mostly the idea of compounding profits, whilst maintaining profit/risk ratios. As I am not yet a consistent, experienced trader, and am mostly learning things using demo accounts and online resources, as well as the forums here, and know there's far more to learn once REAL money is being used, I would like to pose this idea to any experienced trader who has any thoughts on the idea, if they already do this, or why it simply would not work, and why not. At the moment it seems like an excellent motivation to become consistent, and skillful.

Thanks!

 

[theSheik]

you may as well apply E=mc2 to your formula

you're dealing with the laws of diminished returns, and a hefty chunk of available risk capital behind you to get you there...

 

[Black Swan]

First learn to crawl in this game.

Until you are making money consistently for a few years, don't start even thinking about compounding.

Can't agree with this, way, way too long. As a day/swing trader I'd suggest consistent profitability has to be achieved inside whatever short period best suits the individual trader. If the trader is making profit (akin to a working wage) week in week out, according to an edge undeprinned by a defined set of disciplines, then the time is irrelevant...

However, and IMHO, if the trader has not 'cracked' trading (to at least become consistently profitable) inside 12 months something is not right, be it their psyche, or technique.

Not going to comment on the O.P.'s point as it's irrlevant...and silly.

 

[oildaytrader]

Can't agree with this, way, way too long. As a day/swing trader I'd suggest consistent profitability has to be achieved inside whatever short period best suits the individual trader. If the trader is making profit (akin to a working wage) week in week out, according to an edge undeprinned by a defined set of disciplines, then the time is irrelevant...

However, and IMHO, if the trader has not 'cracked' trading (to at least become consistently profitable) inside 12 months something is not right, be it their psyche, or technique.

Not going to comment on the O.P.'s point as it's irrlevant...and silly.

Thats just his opinion like most of his other opinions.Time and time again , we have seen opinions which are what an individual believes or imagines .

Form your own opinion and do your research,95 % club keep hanging around passing their qualified intelligence.

http://www.trade2win.com/boards/trading-polls/21066-how-long-does-take-become-trader.html

 

[amit1986]

Refer to post #42.

That's not 4% per day compounded, genius, which is what we're talking about. Read the bloody thread and a maths book before you sling your oar in.

 

[GammaJammer]

Ok here's a question for you Hilary....

You say you are happy consistently achieving these returns trading fx. I ask the following (multi-stage) question;

1) Is that a leveraged or an unleveraged 4% a day? (roughly - I know some days will be better than others of course).

2) Is that based on having several positions in several currency pairs open simultaneously?

3) Which currency pairs do you trade?

Once I have the answers to these simple questions (without revealing anything proprietary of course - tell us how you do it if you like but I don't feel the need to know for now if you don't want to....) I can go from there.

GJ

 

[GammaJammer]

Some sensible questions and it all goes very quiet....

 

[robster970]

Is that because.............

 

[GammaJammer]

That could be read one of a few different ways. I'm ging with the amusing play on words way. In which case, Like it.....

 

[Hilarymannah]

GammaJamma,...if you want the answers to those questions,..make a bit of an effort and read my posts and profile! ; )

"To be interesting be interested"

 

[glyder]

Hilary,
I have made the effort to read some of your posts as you suggest.
Your first post was a query as to how much your new and wonderful paper trade tested system was worth on the open market. Not the sort of post to inspire confidence.


http://www.trade2win.com/boards/general-trading-chat/32991-potential-setups-426.html#post662794
Hi guys,.and girls,.
I've bin paper trading a strategy for five months now,.....and it's averaging me 200 pips per day,. the question I'd like to ask is,......how much is this system worth on the open market ?

 

[neil]

GammaJamma,...if you want the answers to those questions,..make a bit of an effort and read my posts and profile! ; )

"To be interesting be interested"

Another spammer on the rampage

 

[Hilarymannah]

Glyder,.....so, my friend,..what's your point?
Or is your purpose here to hold tight to your present beliefs and preconceptions on how the markets operate.
There are only a handful of guys who have asked me for help,...the rest seem intent on protecting their ideologies,...There's an old cliche that rings true "you can't teach an old dog new tricks"
Stick with what you know,.and try not to rock the boat,.it's safer that way.

 

[Martinghoul]

Hilary, please do pause for a moment and answer GammaJ's simple questions... That is, if you want people to begin to attempt to think about taking you seriously.

 

[Hilarymannah]

1. 4% ROI based on 2% risk per trade
2 & 3. GBP/USD,.as stated

I'm not going to help any longer,..only for Krugen and Gladiator,..they're the only two who asked.
(I'm baffled)!

 

[GammaJammer]

Have you ever traded gbp crosses as well (gbp/jpy for example) or are you strictly a cable trader?

And I thought my Qs were perfectly sensible. All I was trying to do was establish whether this 4% per day return you think is perfectly achievable was based on leveraged or unleveraged trading. I still don't have an answer to that Q btw....

 

[elitejets]

Krugen and Gladiator:
Take my advice and do not hand over 250quid ...

 

[Hilarymannah]

elitejets,.....very sound advice, I agree totally,....The thing is,.those two guys were interested,... approx' 2.5% of 77,... hmmm,.interesting! (me thinks they'll go far)

 

[elitejets]

I hope you are not using this forum to solicit investments ...

 

[GladiatorX]

I'd actually just like to tell everyone something briefly;

I was totally put off all sold systems by people on the forum, which is a good thing; but i actually, a very long time ago, bought one to see what it was like and it worked and it still works today; the system...

I really don't plan on sharing any information about which system it is so don't PM me anyone please, because that would reduce any possible edge it may have but its just an alternative story to the hundreds of failed ones... But it actually made me money and allowed me to learn to trade properly, without the stress and pressure of making money from my own trading and thats worked out really well... So there is an alternative picture for you.

At the same time, i totally don't recommend buying systems.