What Percent Return Can A Successful Forex Trader Expect to Average, Per Year?

[achilles28]

Greetings everyone,

I am new to forex trading and would like to get an idea what compounded, percent return successful forex traders average per year, using sound money management?

[Midge]

Hello achilles28,


You will find that many successful forex traders do not "expect" anything, hence the need for sound money management.


Good trading,


MidGe

[achilles28]

Midge,

Am I to assume then successful forex traders don't earn a substantial ROI each year since they don't "expect" any return?


I understand the point you are making in reference to the importance of money management. But that was not the intended meaning of the question.

I am simply looking for a general idea, or *ballpark* ROI successful forex traders realize on a yearly basis.


Good trading toyou.

[Midge]

Hi again achilles28,

Am I to assume then successful forex traders don't earn a substantial ROI each year since they don't "expect" any return?

Don't assume anything! I was very careful in using "many" rather than "all" as I specifically wanted to avoid a flame war and , I am sure, many people on this forum will have a different opiniion and will probably post you some replies also. Long live democracy and the freedom of expressing all opinions!

In my opinion, and again I accept that some will differ, and I respect that, there is no causal relationship between expectation and realisation/actualisation.

Another way of answering your question would be to look at the number of traders, on this board and others, that have been trading for a number of years. Just look at their "date joined". Of course, some traders will have much more experience than indicated by their joined date and, conversely, a recent "date joined" does not neccersarily indicate only recent trading experience. But the interesting things is that there are some that seem to have traded for a number of years and are still trading. I suspect that they may find their trading returns satisfactory given time and effort expended, and risk taken, or, they have money to burn and enjoy doing it.

I am simply looking for a general idea, or *ballpark* ROI successful forex traders realize on a yearly basis.

In terms of average ROI, my question would be: when does average become statistically significant? Surely, a few years has little meaning statistically. On the other hand, you, and others, may accept a few months data as valid and extrapolate from there.

The individual style of trading, or the risk taken, will also affect the outcome, and the answer only becomes meaningful within a specific context.

It seems to me, that your question is too broad. The concept of a benchmark for trading does not exists as the styles, especially vis-a-vis risk tolerance, can be many, and they will have many different outcomes.

I understand the point you are making in reference to the importance of money management. But that was not the intended meaning of the question.

My comment regarding money management was only a trow away comment and, I realise clearly now, not an answer to your question. Sorry about that. I also realise and only would like to add, to avoid flames again, that money management has not only defensive/protective, but also profit maximisation aspects.

All this being said, I sincerely wish you a very happy and enjoyable trading experience.

MidGe

[achilles28]

Originally Posted by Midge

Hi again achilles28,

Don't assume anything! I was very careful in using "many" rather than "all" as I specifically wanted to avoid a flame war and ,

The question I asked was a rhetorical one, not a statement. Perhaps I should have omitted 'expect' in the title as this seems to be confusing?

Originally Posted by Midge

In terms of average ROI, my question would be: when does average become statistically significant? Surely, a few years has little meaning statistically. On the other hand, you, and others, may accept a few months data as valid and extrapolate from there.

Midge, although I appreciate your analytical approach towards fielding the question, the original query was asked in a informal, colloquial context; not striving for statistical significance or absolutes. The use of informal, broad language like 'get an idea', 'ballpark' and 'sound money management' implies the invitation of a dialogue shaped more by casual, general exchanges than pin point accuracy.

The replies, of course, can be later be elaborated or expounded upon to derive validity or representativeness of the authors comments, if needed.

It doesn’t have to be a science or framed perfectly to absolve follow up questions to clarify. We have all day, week or month. There is no rush.

See what I mean?

Originally Posted by Midge

It seems to me, that your question is too broad. The concept of a benchmark for trading does not exists as the styles, especially vis-a-vis risk tolerance, can be many, and they will have many different outcomes.

Then by all means, if you wish to participate, it would be great if you could share your annual ROI and risk tolerance employed?

[tim_nn]

Originally Posted by achilles28

I am new to forex trading and would like to get an idea what compounded, percent return successful forex traders average per year, using sound money management?

Well, I don't _think_ that you'll be able to get that by asking the question here, and not only for the reasons Midge suggests.

My own takings are sadly not fully compounded, because although I've been making a living from trading for nearly 5 years now, I'm in the position of the overwhelming majority of home-based, self-employed "small traders" of living off my fund, to some extent, at the same time as trying to increase it. Undercapitalised, in other words. And if that's still true for me, I imagine that it will be true to a greater or lesser extent for very many others.

Most people (including most traders), when planning their activities in life (including their activites in trading), seriously overestimate what they can achieve quickly and seriously underestimate what they can achieve eventually.

I make something between 4% and 8% per month, every month.

[tim_nn]

Originally Posted by Midge

"Our human race is affected with a chronic underestimation of the possibility of the future straying from the course initially envisioned." - Nassim Nicholas Taleb

It's a wonderful quotation, Midge. I don't recall seeing it before. Is it from "Fooled by Randomness" or from somewhere else?

[James]

Originally Posted by tim_nn

I make something between 4% and 8% per month, every month.

Sounds about right for a very good trader, Tim. Leveraged between 1:1 and 2:1 or so.