4xpipcounter
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Disamed. If you get 2% this week, and 2% next week, but never withdrew any money, then it would be compounded. As an example you start with $10,000, 2% grows it to $10,200. 2% that week grows it to $10,404, etc, etc.
OTOH, if you are referring to making 2%, then withdrawing it, and then another 2% and withdrawing it, that is another story.
Even at 1:20 leverage, that is only 40 pips per week. That is extremely doable
OTOH, if you are referring to making 2%, then withdrawing it, and then another 2% and withdrawing it, that is another story.
Even at 1:20 leverage, that is only 40 pips per week. That is extremely doable
Prawnsandwich
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These type of threads are always arseways round...
Anything is possible and many things are probable....
But you have the learn how to trade first, then not lose money, then get consistently profitable....it is possible / probable you might not progress beyond any / all of these stages...
When / if you progress then ask the question as to what % return is possible / doable.....
Anything is possible and many things are probable....
But you have the learn how to trade first, then not lose money, then get consistently profitable....it is possible / probable you might not progress beyond any / all of these stages...
When / if you progress then ask the question as to what % return is possible / doable.....
Apologies if I didn't explain it clearly, what I meant was 2% per week of principal capital (initial capital). This means trading a fixed no. of units each time. This is my preferred approach though it is definitely slower than a compounded method you mentioned.
4xpipcounter
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Ahh, that explains it. BTW, I didn't mean to put you in an unfair spot. I only wanted to address your comment based on its face value.
I've read through this thread with great interest; fascinating stuff. Thanks to everyone who's contributed. But it strikes me that not everyone is on the same page here.
I am a relative beginner at forex (1 year's part-time experience, not profitable yet) so I'm not offering advice, but I want to make a few points.
It seems that in forex, how many pips a person can make is neither here nor there. Neither is the fact that so-and-so made 150 pips yesterday, or 5% last week or whatever. The killer in forex is the volatility that appears in your equity curve as you trade.
No-one knows the outcome of an individual trade in advance; there is an element of chance in it, at the risk of stating the obvious. And in the same way that tossing a coin over and over will sooner or later give you ten heads in a row, sooner or later you will have a long losing streak which will wipe out your account if you chance too big a percent on each trade.
The way we deal with this is by chancing only a small percentage of our accounts per trade, so that you lose, e.g half a percent or maybe even 2% if your stop gets hit.
I have the sense (perhaps wrongly) that some people reason along the lines of "I can make X many pips per day because I made it a couple of times recently. If I therefore leverage at Y times my account, I can make 19 gazillion percent per month."
But it isn't the leverage or number of pips available that's the constraining factor, rather it's the volatility. You have to be able to cope with the drawdowns that occur.
For this reason, the opinion on this subject of someone such as me who does not turn a regular profit on forex is really irrelevant*. What so-and-so did or did not make last week is irrelevant. What matters is what percentage profit ON AVERAGE can you turn in week after week? If you look at how much you've made over the past year, say, and divide by 52 (assuming you traded every week), what percentage is that?
I'd be interested to know what experienced traders say about that, and whether the 2% figure still holds up under these conditions, as an average profit (not as an absolute profit leaving out the losses, and not two days last week or whatever).
*I don't mean to flame anyone here ... I'm grateful for all contributions. I'm just trying to make sense of it for myself.
I am a relative beginner at forex (1 year's part-time experience, not profitable yet) so I'm not offering advice, but I want to make a few points.
It seems that in forex, how many pips a person can make is neither here nor there. Neither is the fact that so-and-so made 150 pips yesterday, or 5% last week or whatever. The killer in forex is the volatility that appears in your equity curve as you trade.
No-one knows the outcome of an individual trade in advance; there is an element of chance in it, at the risk of stating the obvious. And in the same way that tossing a coin over and over will sooner or later give you ten heads in a row, sooner or later you will have a long losing streak which will wipe out your account if you chance too big a percent on each trade.
The way we deal with this is by chancing only a small percentage of our accounts per trade, so that you lose, e.g half a percent or maybe even 2% if your stop gets hit.
I have the sense (perhaps wrongly) that some people reason along the lines of "I can make X many pips per day because I made it a couple of times recently. If I therefore leverage at Y times my account, I can make 19 gazillion percent per month."
But it isn't the leverage or number of pips available that's the constraining factor, rather it's the volatility. You have to be able to cope with the drawdowns that occur.
For this reason, the opinion on this subject of someone such as me who does not turn a regular profit on forex is really irrelevant*. What so-and-so did or did not make last week is irrelevant. What matters is what percentage profit ON AVERAGE can you turn in week after week? If you look at how much you've made over the past year, say, and divide by 52 (assuming you traded every week), what percentage is that?
I'd be interested to know what experienced traders say about that, and whether the 2% figure still holds up under these conditions, as an average profit (not as an absolute profit leaving out the losses, and not two days last week or whatever).
*I don't mean to flame anyone here ... I'm grateful for all contributions. I'm just trying to make sense of it for myself.
Martinghoul
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Very nicely put, Boletus!
4xpipcounter
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Boletus, I'd like to offer some constructive input. Maybe it will help. That's my goal, anyway.
Once the coin flip mentality has been adopted, you are, at that point, saying the market has control. You have no say, and it is out of your hands. I've been trading for 6 years. The 1st year was spend paying my dues and developing my methodology. The next 2 were spent in relative profit, but even then, I had my moments, and that was measureable by my lack of confidence and experience was still not on my side. The last 3years has been when my trading started scaling new heights. It has been in the last 3 years that I realized I have complete control of what I am doing and every aspect of my trading. Let me say as respectful as I know how, I laugh at 2% per week. I made 5% yesterday on a not-so-great day on 3 trades. I made 3% today, but my other trades I have up now are probbaly going to run the gammit the rest of the week.
Trading requires discernment. When you have a pullback within a trend, the object is to know is it a correction? Is it a new trend? Is it a move of smaller significance within a trend or correction? Not all are acclimated to mathematics, but my mathematical knowledge has helped me in being a student (I still am, btw.) of the markets.
I will admit that having a strong risk tolerance has helped me a lot. I recently thought I had a call on the EUR/CHF, but it backed up on me an additional circa 250 pips, It came back to be an outstanding winner. I'm not saying that for someone to adopt my style. Mine is only right for me. Once developed, yours will be right for only you. I said that because experience has helped me to be able to discern the proximity of a reversal, and if I'm wrong, then the move once it gets turned around is even stronger, because that part of the trend becomes streched even more.
There are many more factors involved with successfully trading. It may take more time for you to fully develop a methodology, But if you continue within the context of the coin flip mentaility, then you will always be asking the question, "Is it realistic to make 2% per week?" It's much better to be able to say and know from experience, "Yes, I make much more than that every week!"
I know I have a strong ego, but the one thing that keeps it balanced is the fact the markets will always keep you humbled. It's good to know I am in control at all times. It is also good to know the markets are much bigger than me. The number one thing I have to work on is no longer my methodology or my margining practices .They are etched in stone and is a proven winner. I have to constantly work on keep the right frame of mind towards my trading. I have to keep ice in my veins. I cannot let a trade that goes against me get the best of me. I can never let myself get back at the markets in order to make up for a bad trade.
BTW, excellent point on what you said baout making pips one day, and think it will continue. Believe it or not, I make no goals for how many pips I make. They just flow form staying within and trading within the parameters of my methodology. My percentage of gains also flows. Experience has taught me that also.
There's a lot more that could be said, but I''ll shut up for now.
Once the coin flip mentality has been adopted, you are, at that point, saying the market has control. You have no say, and it is out of your hands. I've been trading for 6 years. The 1st year was spend paying my dues and developing my methodology. The next 2 were spent in relative profit, but even then, I had my moments, and that was measureable by my lack of confidence and experience was still not on my side. The last 3years has been when my trading started scaling new heights. It has been in the last 3 years that I realized I have complete control of what I am doing and every aspect of my trading. Let me say as respectful as I know how, I laugh at 2% per week. I made 5% yesterday on a not-so-great day on 3 trades. I made 3% today, but my other trades I have up now are probbaly going to run the gammit the rest of the week.
Trading requires discernment. When you have a pullback within a trend, the object is to know is it a correction? Is it a new trend? Is it a move of smaller significance within a trend or correction? Not all are acclimated to mathematics, but my mathematical knowledge has helped me in being a student (I still am, btw.) of the markets.
I will admit that having a strong risk tolerance has helped me a lot. I recently thought I had a call on the EUR/CHF, but it backed up on me an additional circa 250 pips, It came back to be an outstanding winner. I'm not saying that for someone to adopt my style. Mine is only right for me. Once developed, yours will be right for only you. I said that because experience has helped me to be able to discern the proximity of a reversal, and if I'm wrong, then the move once it gets turned around is even stronger, because that part of the trend becomes streched even more.
There are many more factors involved with successfully trading. It may take more time for you to fully develop a methodology, But if you continue within the context of the coin flip mentaility, then you will always be asking the question, "Is it realistic to make 2% per week?" It's much better to be able to say and know from experience, "Yes, I make much more than that every week!"
I know I have a strong ego, but the one thing that keeps it balanced is the fact the markets will always keep you humbled. It's good to know I am in control at all times. It is also good to know the markets are much bigger than me. The number one thing I have to work on is no longer my methodology or my margining practices .They are etched in stone and is a proven winner. I have to constantly work on keep the right frame of mind towards my trading. I have to keep ice in my veins. I cannot let a trade that goes against me get the best of me. I can never let myself get back at the markets in order to make up for a bad trade.
BTW, excellent point on what you said baout making pips one day, and think it will continue. Believe it or not, I make no goals for how many pips I make. They just flow form staying within and trading within the parameters of my methodology. My percentage of gains also flows. Experience has taught me that also.
There's a lot more that could be said, but I''ll shut up for now.
Well I was going to say, let's see which one of us is still around in 10 years -- me following the conservative advice of the old hands, or 4xpipcounter who laughs at 2% a week. But I see he's already given up and disappeared, at least from this forum ....
momothebored
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LOL
2% per week compounded is +280% per annum.
Let's see.. Warren Buffet is currently at 19+% per annum
James Harris Simons is at .. +34% per annum
But you, of course, are most certainly going to get +280% per annum.
Like most of the ninjas here telling you it's possible and to disregard other people, you will be dining with them in the Ninja Van having a Ninja Party at the end of the year celebrating your +280% ROI
2% per week compounded is +280% per annum.
Let's see.. Warren Buffet is currently at 19+% per annum
James Harris Simons is at .. +34% per annum
But you, of course, are most certainly going to get +280% per annum.
Like most of the ninjas here telling you it's possible and to disregard other people, you will be dining with them in the Ninja Van having a Ninja Party at the end of the year celebrating your +280% ROI
Hello all, newbie here
I have been trading stocks on and off for fun for about 3 years now and have been studying futures for the past 3 months. I am preparing a trading plan and am trying to decide how much equity I will need and plan out my risk management.
My question is this : With a good system that has an edge and proper money management rules is it possible to achieve a 2% per week rate of return ?
I know this is a very hard question to answer because of the variables but, I'm wondering if some of the experienced traders out there think this is a possible or impossible goal?
Thanks in advance!
the hare
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People tend to disregard the role leverage plays in returns. Most retail punters are leveraged up to the eyeballs, hence the ridiculous returns.
If you work out the average weekly return in a year, with compounding and leverage, yes this is possible. Think of it as 2% a week of the initial investment, not 2% of what's currently compounded in the bank. e.g with an initial investment of £10,000, 2% a week would earn you £200, however with the first week compounded and the leverage increased as a result, the second week would earn you £204 and so on.
However you would need a money management structure in place that would allow you to raise the leverage exponentially without allowing the losses to wipe out the last week's profit etc (as the losses obviously become amplified with leverage too, increasing the risk of losing the money already banked). Always concentrate on minimising the losses to look after profits.
However you would need a money management structure in place that would allow you to raise the leverage exponentially without allowing the losses to wipe out the last week's profit etc (as the losses obviously become amplified with leverage too, increasing the risk of losing the money already banked). Always concentrate on minimising the losses to look after profits.
momothebored
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Oh, I don't doubt that.
But how many leveraged retail punters get the +280%?
How many end up losing their pants?
Interesting statistic.
I had lunch with the MD of a relatively major brokerage in my country last year.
The stats at his firm put the short-term investors / traders at a 4% winning ratio.
And this is in a country with the highest number of unemployed CFA L3's and CAIA s floating in the market proportionate to the population.
Are there a lot of sharks in our market? Yes, hedge funds and IBs all over the world have been dumping funds here.
But honestly, I don't think the % would be that different for any other market in the developed world.
So definitely the probability exists.. she'd need to be the top 4% of retail traders, multiplied by the whatever p(x) distribution that would get her her +280% ROI.
Statistically.. not looking so good.
The Leopard
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CFA L3's and CAIAs? What are these?
the hare
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Agreed.
natureboy
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Its totally possible as an average number, looking back over months or years. Performance is variable, that goes for traders and systems. So don't expect to make 2% every week literally, but more like +5, -2, +4, +1 for a 4 week period.. OP probably knows this..?
POSSIBLE is to do even better. Likely??? What is your system like? How long have you been trading?
Developing a consistently profitable method is a huge part of the battle. You need to know what kind of drawdowns are a natural part of that system, etc. And what to look out for if it starts falling apart. However, just looking at the question, 2% a week possible - from a leverage available point of view, absolutely;; from a 'what are You trading with' point of view - who knows? Only you can answer the question correctly.
Somebody said earlier don't listen to anyone else, and that's right. If the OP is even still here! this thread started back in 2010..
POSSIBLE is to do even better. Likely??? What is your system like? How long have you been trading?
Developing a consistently profitable method is a huge part of the battle. You need to know what kind of drawdowns are a natural part of that system, etc. And what to look out for if it starts falling apart. However, just looking at the question, 2% a week possible - from a leverage available point of view, absolutely;; from a 'what are You trading with' point of view - who knows? Only you can answer the question correctly.
Somebody said earlier don't listen to anyone else, and that's right. If the OP is even still here! this thread started back in 2010..
or perhaps they like to trawl the forums for a laugh
how many accounts / clients?
ffsear
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A lot of people work % return incorrectly.
I have a 50k account and I risk 1k per trade. Last year I made 30k profit. - A lot of people will simply say .. 30k/50k = 60% return in a year. Wrong!!
It needs to be broken down further then that.
In that year I made 260 trades, each one, as i said risked 1k. Therefore i risked a total of 260k to make 30k. My return is 11.53% for the year, not 60% -
I have a 50k account and I risk 1k per trade. Last year I made 30k profit. - A lot of people will simply say .. 30k/50k = 60% return in a year. Wrong!!
It needs to be broken down further then that.
In that year I made 260 trades, each one, as i said risked 1k. Therefore i risked a total of 260k to make 30k. My return is 11.53% for the year, not 60% -
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