Dear FX Traders.
I am not much experienced trader and also really not understand at all about Forex. I just did it simply.
From historical trading, please kindly advise if any missing important thing which I might damage my money.
Your question is a tricky one. It is possible to make 5-10% profit on your account balance in a single month, but it is very hard to make an average of 5-10% EACH month for a long period of time.
To explain I will use my own experience. When I started I had big dreams of 'compound interest', 'doubling my account in a year' and gains of 10-20% a month. Because that's what I did with a demo account over a period of 14 months.
Well, I opened my first account and to my horror I could not trade at all. I made so many mistakes, lost one trade after the other by closing it out of fear, because it looks like the market is turning against me. I was so confused, because I could not duplicate my demo trading. In the end I lost my first $1000 account within four days. I was devastated.
After the shock of my first live trading experience, I started looking for a mentor. Someone with experience and knowledge that can explain to me what I was doing wrong. To start with, he told me that there are vast differences between demo trading and live trading. The first and most obvious being the 'human emotion' aspect of it. In demo trading you don't feel the fear, greed, confusion, anger, etc. Simply because it is not real money. Mistakes on a demo account does not affect you.
On a live account these emotions can seriously ruin your trading experience and your account. So the first thing I had to learn was how to manage these emotions. He taught me a set of rules that I should follow to cope with emotions. Things like, 'Accept you will take losses, and manage your Risk (potential loss) by carefully calculating your stop-loss levels and lot sizes so it does not exceed your acceptable Risk percentage (1% per trade in my case). And many more such rules.
This brings me to the second biggest lesson of trading live. Before you EVEN think of formulating a trading strategy and trading rules, you should carefully develop a Money Management (managing winning trades) and Risk Management (managing losses) strategy/rules. This is the ONLY way to ensure that you manage your account properly and can get up tomorrow to trade again. Things like Risk/Reward (Stop-loss/Take Profit), Maximum Risk (calculation of stop-loss distance and lot size) per trade/ and per account. So say for example your will not risk losing more than 1% per trade and 5% in total for all trades. I think you should get the idea of what I am talking about. These are extremely important rules that MUST be in place and be obeyed if you don't want to blow your account in a week or month like I did.
Once you have the above in place you can look at an actual trading strategy and rules for opening, closing and managing trades. I'm not going into detail about trading strategies, as there are too much info to post it all here, but your trading strategy should basically complement your own personality (are you a big risk taker or not), your available trading time - trading a swing strategy on daily charts only require about an hour per day to analyze charts and place trades, whereas a scalping strategy may require several hours in front of the charts.
To summarize, when I started trading (my second account onward) I sometimes made 8-12% one month and lost 15-20% the next month. This is the part that most people don't get. If you for example entered a trade, and for some reason decided NOT to open the trade with a calculated stop loss, and the market turned against you, you could spend a gut-wrenching few days or even weeks trying to wait for the market to turn back in your favor, and in the end close the trade for a bigger loss than you would have if you had a stop loss in place. Now if you lost 10% this month, then you will need to make probably 12-14% the next month just to break even again. You see the cycle that develops...
The most I ever made on my account in a single month was 16%, back in my reckless early years. Now I average between 2-5% per month, and still make a loss some months. My average per year has been about 10-15%.
I should say that I do not spend my whole day in front of my charts. I mostly trade the Daily charts, and sometimes the 4 hour charts.
In closing, my best advice, based on personal experience, is not create expectations in this game. Do your homework, get your carefully developed Trading Plan, Risk/Money Management and Trading Strategy in place, and then treat it like you would proper business or high profile job. You should do fine, and who knows, perhaps you are a young genius who could average 5-10% a month.