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Some Reasonable Montly Return You Can Count One
forex_trader_32751
Mar 27, 2011からメンバー
18 投稿
May 07, 2011 at 04:26
jad42 posted:
Compounding is very powerful.....And should not be taken lightly.....
If you can achieve 20% plus a year and keep doing this year in year out your trading with the professionals !!
Indeed, it is extremely powerful. But I think yoohoo999's calculation to show how powerful it is, is too simplified. That's more reasonable for calculating compounding interest. For trading, it would be less easy don't you think? Do you increase lot size after every profit? Maybe after every profitable month?
May 07, 2011 at 05:49
(編集済みのMay 07, 2011 at 05:54)
it was just a simple calculation to highlight the effects of compounding profits on a monthly basis where a consistent monthly return is envisaged. 😁
Clearly it's going to be easier to do in practice if your lot size/risk was based on available capital rather than calculated on an individual trade basis.
I was really just trying to show that in the real world, high consistent monthly returns and straight forward compounding isn't as easy as some seem to think (i'm certainly not including you in that group light!), otherwise all forex traders would be multi millionaires after a couple of years! 😎
I just get the impression from lots of the stuff I read on here that people see a figure (e.g. 50% per month returns) and do a quick calculation in their head and realise they can easily become a millionaire in no time at all, but never really stop to think why most people trading retail forex ARE NOT millionaires. It's easy to forget that (generally) with high monthly returns you have a higher risk profile, so your long term prospects are less stable, and whilst things might go great for a few months that high risk that's helping you win big can suddenly come back and bite you in the backside when you're overexposed and the market goes pearshaped (say for example when an earthquake hits Japan).
Clearly it's going to be easier to do in practice if your lot size/risk was based on available capital rather than calculated on an individual trade basis.
I was really just trying to show that in the real world, high consistent monthly returns and straight forward compounding isn't as easy as some seem to think (i'm certainly not including you in that group light!), otherwise all forex traders would be multi millionaires after a couple of years! 😎
I just get the impression from lots of the stuff I read on here that people see a figure (e.g. 50% per month returns) and do a quick calculation in their head and realise they can easily become a millionaire in no time at all, but never really stop to think why most people trading retail forex ARE NOT millionaires. It's easy to forget that (generally) with high monthly returns you have a higher risk profile, so your long term prospects are less stable, and whilst things might go great for a few months that high risk that's helping you win big can suddenly come back and bite you in the backside when you're overexposed and the market goes pearshaped (say for example when an earthquake hits Japan).
May 07, 2011 at 13:00
Personally I risk 1.5% ( or round down ) on each trade and never expose more than 6% of equity...I feell comfortable
with this and it fits my trading plan......
1.5% risk of growing equity ( or shrinking equity !! ) is not for everyone but i look at trading as more of a marathon than
a sprint...........Think long term and preserve what youv'e got !
I think trading in a comfort zone of small risk you can make Rational Decisions instead of Irrational decisions driven by
emotions..
With Discretionary trading you need some hard rules when it comes to money managment.........
with this and it fits my trading plan......
1.5% risk of growing equity ( or shrinking equity !! ) is not for everyone but i look at trading as more of a marathon than
a sprint...........Think long term and preserve what youv'e got !
I think trading in a comfort zone of small risk you can make Rational Decisions instead of Irrational decisions driven by
emotions..
With Discretionary trading you need some hard rules when it comes to money managment.........
Memories caught in time but never forgotton
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