What kind of trading is most profitable for ordinary people?

[TraderABC]

Originally Posted by xtsunami

TraderABC,

It sounds like you have already made up your mind what you think will be your style of trading.

On the contrary I am confused...

But there are some things you may want to think about first:

1. because a strategy backtested well does not mean it will trade well.

I agree 100%. I used to spend 8 or so hours per day programming/running automated systems backtests and forward test. But if you had a choice of systems would you choose the one which bombed or which one worked well?
If the strategy is sound, if it does not rely on lots of indicators (my best uses just one), if it works well on all major markets, then ....

2. because 1000 pips was available does not mean you will get them.

Same logic could be applied to any time frame (scalp, position, etc)... Except when you enter more often, you are more likely to catch move. What I have found that sometimes it doesn't matter when you enter, but how you manage your position ie: stoploss/trailing stop.

3. because a trade is made on a larger chart does not mean you need larger stop losses than you might use on a smaller chart

Actually it does. You CANNOT predict a market, you have to let it breath. Picking tops and bottoms is loosers game. Since price never moves strait up or down and you can rarely pinpoint the EXACT time it reverses, setting a conservative stop loss (such as few candles worth of pips) will let you catch the move.

4. you don't need to trade just one time frame or use just one strategy.
Just some thoughts off the top of my head,
XT

I agree, except that I think that consistency is VERY important and jumping from one to another strategy may be futile...

[mishak]

What kind of trading is most profitable for ordinary people?

Well, majority (80%) of traders do lose the money. Therefore, you should be a NOT-ordinary person to make money (on forex)

Originally Posted by TraderABC

... I am confused...

Please specify what kind of money do you intend to put at risk on forex and what annual income do you consider "profitable" ? Will try to help you particular situation

[TraderABC]

Originally Posted by mishak

Please specify what kind of money do you intend to put at risk on forex and what annual income do you consider "profitable" ? Will try to help you particular situation

I was thinking something along the lines of 50k deposit sometime in the future to make ~5k a month. 10% a month...

[ampris2000]

well....
if you use 20,000 on 50:1 leverage and trade the aud/usd 10 pips per day times 5 days = about $6750.00 (usd) per week.
How is that? You could probably use less but the above is something I figured out on the fly for you.

yeah, yeah, i know people say don't trade your whole balance. I do a bit of both (the whole balance and sometimes part).

My question is, why not use the whole balance if you know it is going to go in your favor?
In trading in the zone, the author wrote:

"Why would you make a trade if you aren't sure it would go in your favor?"

I like that.

P.S. the money is all relative. If your balance was 20.00 and you lost 10 pips that would be about a $6.50 loss. So you think, no big deal. It is still the same percent if you had 20,000 and a $6750 loss.
Forget looking at the numbers, just work on being a good trader and the money will follow.
This morning had I looked at my numbers on the aud/usd i would have probably freaked out. But I have my account info hidden. So all I saw was the big negative pips I was in, but stuck to my system which said it'll be going down. Which eventually it did.

[ampris2000]

To play it safe, with the same account info (20,000 @ 50:1)
Get 2 pips per day * 20 days = $5360 (usd). This is on the AUD/USD pair. a pip here is about 134.00. The aud/usd pair "doubles" your pip value in a way. I'm on pacific standard time. I notice around 11pm to 8 am it's the most active.

[mishak]

Originally Posted by TraderABC

I was thinking something along the lines of 50k deposit sometime in the future to make ~5k a month. 10% a month...

50k for the start is the good sign - you are better than "ordinary people".
Now how to trade. The more you trade (per month) - closer you'll be to the statistical pattern of "losing majority of starters".
First benchmark - not to lose more than 10% of your account per month.
Forget about leveraging more than 1:5 (if you can't 1:10 is final top max ultimate leverage ). The more leverage you use - the better chances to lose !

10% per month with 1:5 leverage means 2%. Daily movements in major ccys are 0.5%-1%. So forget scalping, daytrading, look for a swing opportunity.
Identify the trend on daily charts, choose the moment to pick up at the bottom (or sell from the top). Target at least 80 pips with real intention to keep the open position thru overnight.

3-5 good trades per month or 10 trades (4 losing, 6 winning )
Take your time

[foamgod]

50k... I hate to see you lose it. Honestly.

Why don't you try starting off with a mini? Maybe just dump 2k there for "fun".

[RedDuke]

Demo-->Mini-->Standard - this is the only way to go. When I started, I always treated Demo as if it was real account. I never allowed myself to have huge losses because it was a fake money. That helped me a lot when I went live. If you can not make money with mini account, there is absolutely no point going to 100K lots. When I trade, I only look at pips, I do not care if it is $1 per pip or $10 or $100 … The size comes with time, assuming you are still around.