$100k not enough capital?

[Montana79]

Apparently you have to be as good as warren buffet to make 20% net profit on your capital per year as a trader? So with a £100k account, you’ll only be up £20k at the end of a year trading! For this reason, are successful traders (the 1%) working for hedge fund managers and investment banks? As you’ll surely need £1mil capital to make anything decent? Who agrees with this ????

 

[Nowler]

Apparently you have to be as good as warren buffet to make 20% net profit on your capital per year as a trader? So with a £100k account, you’ll only be up £20k at the end of a year trading! For this reason, are successful traders (the 1%) working for hedge fund managers and investment banks? As you’ll surely need £1mil capital to make anything decent? Who agrees with this ????

Nice... I was as good as Warren Buffet last year! Result
I don't think you need to be his calibre to make that kind of return per year.

To be able to do it with the capital he has... now that's a different story

 

[counter_violent]

Apparently you have to be as good as warren buffet to make 20% net profit on your capital per year as a trader? So with a £100k account, you’ll only be up £20k at the end of a year trading! For this reason, are successful traders (the 1%) working for hedge fund managers and investment banks? As you’ll surely need £1mil capital to make anything decent? Who agrees with this ????

Buffet isn't a trader, he's a long term investor. Never shall the two be confused.

 

[Montana79]

The reason I asked this question, is that I am currently learning how to trade, and if I can be consistently profitable in a demo account, then I would open a live account with £5k, but I was told prop traders in London get paid a salary to trade, and they average around 10% On their capital per year. So I’m at the very beginning of this journey, but I don’t personally know any traders. You hear a lot of people claiming to make a lot of money, but then I hear this about prop traders only making 10%??

 

[Nowler]

The reason I asked this question, is that I am currently learning how to trade, and if I can be consistently profitable in a demo account, then I would open a live account with £5k, but I was told prop traders in London get paid a salary to trade, and they average around 10% On their capital per year. So I’m at the very beginning of this journey, but I don’t personally know any traders. You hear a lot of people claiming to make a lot of money, but then I hear this about prop traders only making 10%??

I think you are better off not thinking about what other people can make.
You just keep your head down and become the best trader YOU can be.

What are your goals?

 

[Montana79]

My printing business recently went bust. I have another source of income and some rent from property I own, and some savings and lots of time! I’ve always been fascinated with trading, I went in blind a few years ago and lost s few grand, but realised I didn’t have a clue. So now I’m trying to learn as much as possible, I’ve just finished something called Pipsology on baby pips, and I’ve done a few other courses and books. So after that beating round the bush, my goal is to become consistently profitable at trading forex. But I’m confused after hearing if you're making 20% on your capital per year, you’re doing really well? So my initial thought was can I turn 5k to 10k, if I could do that then I would put more capital in, and go from there.

 

[counter_violent]

My printing business recently went bust. I have another source of income and some rent from property I own, and some savings and lots of time! I’ve always been fascinated with trading, I went in blind a few years ago and lost s few grand, but realised I didn’t have a clue. So now I’m trying to learn as much as possible, I’ve just finished something called Pipsology on baby pips, and I’ve done a few other courses and books. So after that beating round the bush, my goal is to become consistently profitable at trading forex. But I’m confused after hearing if you're making 20% on your capital per year, you’re doing really well? So my initial thought was can I turn 5k to 10k, if I could do that then I would put more capital in, and go from there.

Nobody is making money trading Forex.
To have any chance of making money from trading you have to have volatility.

Why FX Volatility Has Been Falling, And What To Do About It

There’s no doubt about it – volatility in the foreign exchange markets has been falling recently. The Deutsche Bank historical volatility index of the major G7 currencies, while not quite back to the lows of 2014, is certainly getting there.

www.nasdaq.com

 

[timsk]

. . . So after that beating round the bush, my goal is to become consistently profitable at trading forex. But I’m confused after hearing if you're making 20% on your capital per year, you’re doing really well? So my initial thought was can I turn 5k to 10k, if I could do that then I would put more capital in, and go from there.

Hi Montana,
Unfortunately for you, not everything is as it seems in the trading world. That goes for T2W too, so take everything you read with a pinch of salt, my posts included.

Firstly, IMO, BabyPips isn't the great starting point for beginners that it's made out to be - usually by beginners. I explain why in this post. I recommend you go back a step and consider very carefully if forex is the right market for you.

You've heard that if you're making 20% per year then you're doing really well. That's complete nonsense. For a novice trader to break even in their first year would be a fantastic achievement. Aim for that goal first and build on that. 5% the next year and 10% the year after that etc. If you get to 20% and can achieve that scale of return consistently year on year - you'll be in the elite 1% category. So, turning your £5k into £10k ain't gonna happen any time soon and, if you're like most of the vet's on here, you'll lose most - or all of it initially - and have to start again before making any real progress. Be under no illusions, trading is a very tough game.

I realise this is the last thing you want to read and I expect you'll ignore it - which is fine! ;-)
Tim.

 

[alleyquit]

I think it's a handsome capital...

 

[Nowler]

I came here, like most, with the dream of making a good life from trading. I arrived with a bubble that the senior members were quick to burst - which I am glad they did.

This industry is full of dreams and promises, many of which are not accurate. And even some of the things that are possible, may not be attainable by you or I, merely because of what makes us who we are.

Can I promise you riches? Of course not, nobody can.
Can I promise you a challenge? You bet!

The best advice I could give you is to bring it all back to basics. Keep it simple. Learning to trade can be overwhelming, but stick at it, and keep things simple. Ask questions, listen to what you are being told, but as timsk said, take it all with a pinch of salt.

I was recommended this by a member on here when I first started, and I now recommend it to you.
It's a free trading course - https://www.marketlifetrading.com/course/index

Also, I found it helps to listen to and study successful people. Some are not even traders/investors.
Being a student of the market will really help you... understand what money is, how it came about, understand how markets work... how commodity markets differ from currency and stock markets.

I am not going to tell you that demo trading is wrong. What I will say is that I am glad I quickly moved to a micro live account as having some skin in the game helped me focus. My broker is Oanda, they will let you deposit $5 if you wish. I am not exactly recommending them as a broker... I'm sure there are better... but it did the job for me.

This is an amazing journey! Frustrating, but rewarding depending on what sort of person you are.

** Full disclosure: I am not a profitable trader. I am just recently getting back to break-even after losing 60% when I started in May '17

 

[new_trader]

The reason I asked this question, is that I am currently learning how to trade, and if I can be consistently profitable in a demo account, then I would open a live account with £5k, but I was told prop traders in London get paid a salary to trade, and they average around 10% On their capital per year. So I’m at the very beginning of this journey, but I don’t personally know any traders. You hear a lot of people claiming to make a lot of money, but then I hear this about prop traders only making 10%??

10% compounded is an excellent return, especially over the long term. You need to be careful about how some of the figures you quote are calculated.

A value investor could buy a stock cheaply that falls in price the very next day and stays down there for 4.5 years, then in the last 6 months doubles in price originally paid. That equates to a yearly compound return of ~15% over 5 years.

A trader who makes 10% every year would look like a genius in comparison for that first 4.5 years.

 

[ffsear]

So my initial thought was can I turn 5k to 10k, if I could do that then I would put more capital in, and go from there.

Sort answer, Yes of course you can. 5k risking 2% per trade. If you average 1:1 return per trade you will have 10k once you have 50 more winning trades then losers.

Putting it into practice is another story.

 

[postman]

Apparently you have to be as good as warren buffet to make 20% net profit on your capital per year as a trader? So with a £100k account, you’ll only be up £20k at the end of a year trading! For this reason, are successful traders (the 1%) working for hedge fund managers and investment banks? As you’ll surely need £1mil capital to make anything decent? Who agrees with this ????

At the rate the world is printing money in 3 years time your bank current (checking) account will be giving you 20% return, then everyone is Warren Buffet.
In case your not old enough to remember (I am) interest rates were 15.5% in the 1990's.

 

[MasterOfCoin]

$100K is a frighteningly large mount of capital to start out trading with.
(to answer your question) and yes, it's far more than enough !

But as to the rest of the points made in this thread:

Trading and Investing are apples and pears- not the same things at all.
Comparing them as if they were like for like serves no useful purpose and is at best, misleading.

Trading is hard, very, very hard, if consistent profit is the objective.
Anyone who tells you otherwise is probably lining you up to be scammed out of your cash in some way.

There is no get-rich-quick system, you'll maybe get rich- if you work hard enough at it for long enough.
Or simply put, how much do you know about whatever it is you are about to trade ?
If the answer is 'only the price' then you're going to be one of those traders who consistently loses money.

And by all means, use a demo account to learn your chosen platform.
Then use small cash stakes to practice trading.
&| only then use a few thousand to do your real learning with, because only then will you be paying attention as your hard-earned cash is on the line !

I hope you take up the challenge and keep posting as your journey unfolds, you've certainly the sense to ask the right questions before embarking and that's a very good way to start out.


Here's a cheers to your first profit 🥳

 

[new_trader]

At the rate the world is printing money in 3 years time your bank current (checking) account will be giving you 20% return, then everyone is Warren Buffet.
In case your not old enough to remember (I am) interest rates were 15.5% in the 1990's.

Hopefully one day the Central Banks' printing business will also go bust.

 

[Nowler]

Hopefully one day the Central Banks' printing business will also go bust.

That'll be the day!

 

[MasterOfCoin]

Hopefully one day the Central Banks' printing business will also go bust.

Possibly.
But they'll simply re-open it shortly thereafter.

'America' land of the enslaved, managed to get rid of the bank 3 times and that financial liberty was won at massive cost in human suffering and endurance, only to be literally thrown away for personal gain by those entrusted to safeguard it for future generations to enjoy and benefit from.

Cliche or not, the love of money is the root of all evil.

 

[timsk]

. . . In case your not old enough to remember (I am) interest rates were 15.5% in the 1990's.

That was the rate I paid on my first property in 1990. My entire salary went on it and my then girlfriend (now wife) and I lived off her income. We gambled that rates couldn't go any higher and would soon fall and that, additionally, our respective salaries would quickly rise. Fortunately, the gamble paid off and we were soon saving £500 to £1,000 per month. And, thanks to the wonder that is compound interest, after just 5 years we became mortgage free.

. . . Then we moved to a bigger property.
Tim.

 

[trapped]

Apparently you have to be as good as warren buffet to make 20% net profit on your capital per year as a trader? So with a £100k account, you’ll only be up £20k at the end of a year trading! For this reason, are successful traders (the 1%) working for hedge fund managers and investment banks? As you’ll surely need £1mil capital to make anything decent? Who agrees with this ????

Making 20% on 100bn capital is very different to making 200% on 1m. You just can't trade intraday with that much capital.

 

[postman]

Apparently you have to be as good as warren buffet to make 20% net profit on your capital per year as a trader? So with a £100k account, you’ll only be up £20k at the end of a year trading! For this reason, are successful traders (the 1%) working for hedge fund managers and investment banks? As you’ll surely need £1mil capital to make anything decent? Who agrees with this ????

I think the question is moot, for example if you sat a monkey at a desk with 2 buttons on it labeled buy and sell and gave it a dopamine hit every time he pressed either button the $100,000 would be gone very quickly. However if you gave a man with a plan $100,000 and he made one trade per month that netted a 3% return in 10 years he would have $3,471,098.
The real question is how much knowledge do I need to start trading full time!