kricka posted: is, is one protected enough to withstand any direction the market takes?
So would that entail only using a very small portion of your account? It appears that is what 95% of the people in forex do, and they still suffer a margin call. I would believe the actual apporach is all wrong. Instead of being able to withstand any move, you should be prepared to follow the actual short term move.
I agree that traders even when using a small portion of their account they suffer margin calls. Why is the question? The main reason is they do not lock in profit on the upside and they do not minimize the draw down. Experienced traders can take on a higher risk as they know the ins and outs of the market. New traders entering should go for a more controlled risk management. Take a look at this demo account which I am using to test different RMM strategies. The first half part of the chart there is definitely higher risk taken and the rewards are bigger. The second part is extremely controlled and the rewards are not as profitable but still enough to be satisfied with a steady profit curve upwards.
Any return % is possible in fx if you are knowledgeable enough. But to sustain very high performance consistently over long duration of time , say , a couple of years then I feel is near impossible. My interaction with many relationship managers, managing other people's funds in MNCs brought me to this conclusion.They aim for returns between 20%-50% every year.Lucky to get 100%+ in any year. I initially targeted 300% return annually but after a year found it to be very risky and difficult target. I considered my trading to be a last opportunity to trade and thereafter reduced risk and I am targeting 100% annually. So far I have been quite successful with this 100% target and aim to achieve this every year without fail. Compounding is the tool I will use. Lets see how far I can go with this.
"Together We Grow"---Minimum of 100% every year with compounding
Higher profit, means higher risk. I agree with 111ForexGuru, 100% is posible and real and my target too. Join in, if you are interested. Don't waste your time with demo accounts, because they truly get better results and the user is more likely to use higher position's volume, because he won't loose real money.
TLCLife posted: Higher profit, means higher risk. I agree with 111ForexGuru, 100% is posible and real and my target too. Join in, if you are interested. Don't waste your time with demo accounts, because they truly get better results and the user is more likely to use higher position's volume, because he won't loose real money.
Why does everyone say that you need to have Higher risk to make higher returns. That by far is one of the most simple minded statements. Risk should not be definded by the amount of funds and leverage you use on any given trade, but instead your actual expouser to the negative side of the trade which you place. Example... Most people in forex trade the SUPPLY/DEMAND zone, which is simply a range in which you ASSUME the market will breakout or reverse from. Notice you still have to decide if the market with increase or decrease from that range. Now, instead of playing the breakout of the zone peoople simply take a wager the second the price heads into the range, and now they have a bias towards either the long or short. So now that trader is taking a big risk when it comes to PIP - DRAWDOWN because now they will be ignoring price action.
A person can trade to make 1000% a month if they wanted, but if that traders equity curve isn´t bouncing all over the place, then that trader has a very high chance of being able to hit his/her monthly target in comparsion to a person who simply over leverages because they believe the currency is over- bought or over- sold.
The beauty about myfxbook, is that we can actually see how many pips on avg the person gives to the market before they close their trade. The higher the number, even if the person has a very low dd% or a huge % change, suggest that the person isn´t a very accurate trader. If you don´t have accuracy then you long term outlook will be margin call. Trading forex with the expectation of long term success is being very over confident. If you can´t even predict if you will be alive in 3 days, why should you expect to make any profit in the future?
ADVERTENCIA DE ALTO RIESGO: El comercio de divisas implica un alto nivel de riesgo que puede no ser adecuado para todos los inversores.
El efecto de apalancamiento crea un riesgo adicional y una exposición a las pérdidas. Antes de decidirse a operar con divisas, considere cuidadosamente sus objetivos de inversión, su nivel de experiencia y su tolerancia al riesgo.
Podría perder una parte o la totalidad de su inversión inicial. No invierta dinero que no puede permitirse perder. Infórmese sobre los riesgos asociados al trading de divisas y pida consejo a un asesor financiero o fiscal independiente si tiene alguna duda.
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