FAQ Realistically, How much Money can I Expect to Make?

[stevebebe]

SHORT ANSWER

Allegedly, 90% of all traders fail
This cliché is posted on the boards almost daily. It may or may not be true. Evidence to support this figure is mostly anecdotal, however, it’s certain that many who try their hand at trading quit with less money in their pockets than when they started. So, the balance of probabilities suggests that you would be wise to ‘expect’ to lose money rather than to make any. But hey, that’s a negative attitude and, besides, you’re not one of the 90% are you? No sir, let’s assume that you’re destined to join the elite 10% of profitable traders!

Now the good news
The positive spin on the ‘90% of all traders fail’ statistic is twofold:
1. Many of those that fail are ‘get rich quick’ punters who play at trading in the vein hope that they can turn £100 into a million in next to no time. If this describes you – here’s some great advice for you. . . If it’s money you can afford to lose and you want to have a laugh gambling, go to the races or take a trip to Las Vegas. It’ll be a whole lot more fun.
2. The good news is that the failure rate needs to be high in order to provide the mega profits for the 10% who succeed. In this respect, trading is a bit like the lottery. The jackpot is divided between those who have the winning numbers. The more winners there are, the smaller the cash prize that each winner receives. So, if you’re willing to put in the huge amounts of time and effort required to succeed – the upside is big. Huge. The sky’s the limit!

But . . . (there’s always a ‘but’!)
But here’s the rub. The secret to trading success is not to focus on reward, but on risk. You must minimise risk and keep your losses small. Coupled with this is the need to focus on trading really well, rather than the money you’ll make if you do. In this respect, good traders are like the best premiership footballers. First and foremost, footy stars have to focus on their training, fitness and how to excel on the field of play. The fame, money and beautiful WAGs come second.

The holy grail to success in trading is understanding and applying sound risk and money management principles. Failure to do so could be disastrous. No joke. In extreme cases, this could result in bankruptcy and loss of your house or other assets. If you've not read it already, before continuing with this FAQ; check out this sticky: Essentials Of 'Risk & Money Management'

Actually to earn in forex, you need to learn. It took me few years to start earning and make it consistently. But I still main part of my funds is managed by other trader Inna Rosputnia Lady F. I am not ready to manage all my funds. But what I know for sure trading is great business. It take a lot of time and money to become successful, but it worth it.

 

[Lands_end]

In all trading, do not focus upon what you want to gain, just have a plan to limit your loss. Anybody who tels you otherwise is a cokc.

 

[FxTim]

Well First of all it depends how much is your Capt ital invested is and then you are supposed have good money management along with Following Trend. but never risk your Capital more then %2 on one trade.

 

[predator75]

The most probable output is that you will lose all your money.

 

[defbtwoon]

Realistically speaking, it all depends on the skills and method used by the trader and its level of expertise when it comes to trading business. And keeping mind of the risk that the trading gives rather than concentrating on the money flow will help make the trading a success.

 

[progix]

Well First of all it depends how much is your Capt ital invested is and then you are supposed have good money management along with Following Trend. but never risk your Capital more then %2 on one trade.

In my opinion we should only risk that much capital that we can afford to loose in forex trading.

 

[greg.darren]

agreed! It certainly depends upon your learning and risk management ability. Take calculated risk and focus on a good trading strategy.

 

[Tendong3]

There is a big chance of losing your money. You should took less money as a starter.

 

[Brumby]

What professional FX traders make annually according to the Barclays Hedge index. They are verified accounts (audited) of professional traders managing client's money.

What is obvious - they are not remotely near the 50% to 100 % return BS claims.

 

[Lee Shepherd]

What professional FX traders make annually according to the Barclays Hedge index. They are verified accounts (audited) of professional traders managing client's money.

What is obvious - they are not remotely near the 50% to 100 % return BS claims.

It's disappointing but true. Every time I mention it (same for you Brumby), you will be ignored or fought against and your words, and more to the point, the proof and evidence, will fall silently on deaf ears. People just don't want to hear it. So what do we do, we say... f**k em. I spend my time investing on me and with my family and friends, not trying to convince others.

Post up a thread that states 'make 20% a week working 1 hour a day'
or
'How to make £300-£500 per day trading the markets'
And see them all swarm like flies.

People that are 'making' (term used lightly) tens of percentage points a week/month will not last in this business. The main and only reason why so many come in to this business in the first place is because they are lazy and want to earn big bucks doing f**k all.

This is why technical trading is far easier to sell to the masses than fundamentals. Why read, read and read some more when you can just draw some lines on a chart and 'make money'.

For what it's worth, my personal ratios are just over 70% hit rate with an annual return just inside the double digits, however, that's trading a big account and is considered extremely low risk - therefore low return.

PS: Those traders returns published are very much on the low side.

Lee

 

[Brumby]

PS: Those traders returns published are very much on the low side.

Lee

I believe the returns are the average of 50 plus accounts that are tracked in the index. The top 20 accounts do perform better but that also means the bottom 20 actually loose money.

[/IMG]

 

[NVP]

Actually to earn in forex, you need to learn. It took me few years to start earning and make it consistently. But I still main part of my funds is managed by other trader Inna Rosputnia Lady F. I am not ready to manage all my funds. But what I know for sure trading is great business. It take a lot of time and money to become successful, but it worth it.

to really make it you need to run your own show ......

never put your nuts in the basket of another ....they may get crushed or lost !

N:smart:

 

[NVP]

It's disappointing but true. Every time I mention it (same for you Brumby), you will be ignored or fought against and your words, and more to the point, the proof and evidence, will fall silently on deaf ears. People just don't want to hear it. So what do we do, we say... f**k em. I spend my time investing on me and with my family and friends, not trying to convince others.

Post up a thread that states 'make 20% a week working 1 hour a day'
or
'How to make £300-£500 per day trading the markets'
And see them all swarm like flies.

People that are 'making' (term used lightly) tens of percentage points a week/month will not last in this business. The main and only reason why so many come in to this business in the first place is because they are lazy and want to earn big bucks doing f**k all.

This is why technical trading is far easier to sell to the masses than fundamentals. Why read, read and read some more when you can just draw some lines on a chart and 'make money'.

For what it's worth, my personal ratios are just over 70% hit rate with an annual return just inside the double digits, however, that's trading a big account and is considered extremely low risk - therefore low return.

PS: Those traders returns published are very much on the low side.

Lee

i ran some training a few years back and once the students started to realise the work needed and what i was doing i think it was a real shock .....in truth most were looking for the black box easy solution ........

sorry gang - it aint there .....its about experience and bloody hard work :smart:

N

 

[rossored]

I gave up trading my own account some time ago and put my money into a basket of funds instead. Double digit returns and don't need to lift a finger.

 

[piphoe]

I gave up trading my own account some time ago and put my money into a basket of funds instead. Double digit returns and don't need to lift a finger.

double digit returns? i like that basket whats in it?:|

 

[rossored]

Send me a PM if you're interested.

 

[NVP]

I gave up trading my own account some time ago and put my money into a basket of funds instead. Double digit returns and don't need to lift a finger.

theres 89 places left ...hurry

 

[Jason101]

I seem to be able to do between 100-200% a year, any more than that and the risk of a blow up becomes counter productive, in the past I have achieved 500% in 6 months, but blew up.
In the last 2 months I have achieved over 100%, but this I am sure is down to the unusually strong bull market and to extrapolate this to a yearly return of over 600% would be unrealistic.
I feel that 200% is very achievable, if you are prepared to undertake a 50% chance of 30-40% draw down.
If you cant stomach that risk. And have a risk tolerance of a 10-20% chance of a 5 to 15% max drawdown, then I would estimate profit of around 7 -12% pa would be achievable.

 

[Lee Shepherd]

I seem to be able to do between 100-200% a year, any more than that and the risk of a blow up becomes counter productive, in the past I have achieved 500% in 6 months, but blew up.
In the last 2 months I have achieved over 100%, but this I am sure is down to the unusually strong bull market and to extrapolate this to a yearly return of over 600% would be unrealistic.
I feel that 200% is very achievable, if you are prepared to undertake a 50% chance of 30-40% draw down.
If you cant stomach that risk. And have a risk tolerance of a 10-20% chance of a 5 to 15% max drawdown, then I would estimate profit of around 7 -12% pa would be achievable.

Show me a professional trader that makes 200% pa and I'll show you some one who will regularly busts out.

 

[Jason101]

Show me a professional trader that makes 200% pa and I'll show you some one who will regularly busts out.

Definitely for sure, If I were a professional trader trading a fund or even just someone else's money, a friend or family I would be targeting 8-12% and probably reaching 4-8% pa.

But as it is I am free to take as much risk as I like, I find that 100-200% pa is a good balance for me of dramatic equity growth verses risk of a 30 to 60% draw-down.

With this I am relying on a great deal of market luck against a sudden unforeseen movement (gap) in any of my positions. When this happens I would expect 10% equity drop in that position. If this happens several times in positions or one event that effects all positions then I am looking at a 40-60% draw-down (no opm or client money could handle that).
So at 100 -200% pa returns I am playing the game that this doesn't happen more than twice a year for me, without building up a reserve. I am also regularly withdrawing 50% of any large win (a large win is about 20% plus, so after about 5 large wins I have withdrawn about 50% of original capital) and turning it into cash, which also slowly means a 60% blow up is less important.

Everyone plays the game with different outcomes in mind, so they have different rules. If I had more money than I new what do with I would not even be playing,
and I would be very risk adverse my money would all be tied up in rental income.

But as it is I am at the right time of life and right financial comfort levels where the greater risk is making sense for me and proving profitable. Only last week I easily paid for my sons school ski trip out of one weeks market profits. I don't expect it to last forever, either my luck or the current licence to print money bull market will run out.
But while it works and while I continue to withdraw from my account, why stop.
I should add that one of my earlier mistakes was not withdrawing any profits, this is fatal, as when a blow up comes, there is nothing to show.