I've got to ask the obvious question, how much roughly do you guys expect to return each year from your trading activities, what would you call a 'good' year?
10 Pips Per Day - Everyday
- Thread starter Trader200K
- Start date
10 = goal in pips
x = # of lots...
I apologize for being as cryptic with my calcs as you were.
Again, hows that GAO day job working out for yah. LOL. Just kidding with you. Just trying to help.....
10 pips a day is not hard to accomplish. But if your money management doesn't back up your trading formula, you will be broke with the first drawdown that hits you.
Pyramiding/compounding your positions has to take into account the effect that margin requirements will have on your purse. A severe drawdown will hit you and spike a bunch of margin calls which has to be factored into your calcs.. Your calcs fail to plan for short term pullbacks.
x = # of lots...
I apologize for being as cryptic with my calcs as you were.
Again, hows that GAO day job working out for yah. LOL. Just kidding with you. Just trying to help.....
10 pips a day is not hard to accomplish. But if your money management doesn't back up your trading formula, you will be broke with the first drawdown that hits you.
Pyramiding/compounding your positions has to take into account the effect that margin requirements will have on your purse. A severe drawdown will hit you and spike a bunch of margin calls which has to be factored into your calcs.. Your calcs fail to plan for short term pullbacks.
I'm a little older than the typical ET'er. I start drawing Social Security next Fall, and I expect that will cover about 1/3 of my living expenses. My goal for all my trading is 20% per year, but I certain wouldn't quit when I make that. I can always find something to do with the extra money.
I would love to find something to supplement what I am doing now, and $25k per year would do very nicely. I find active trading to be both exciting and boring, sometimes both at once, but I am not looking for either experience. That's one of the reasons I use automation. Another reason is that I am not a very good trader. The computer does it much better. I like "low and slow". You younger fellows can be heroes and dazzle us oldtimers with your big gains.Quote from rwk:
I'm a little older than the typical ET'er. I start drawing Social Security next Fall, and I expect that will cover about 1/3 of my living expenses. My goal for all my trading is 20% per year, but I certain wouldn't quit when I make that. I can always find something to do with the extra money.
Thanks for replying, after I posted that message I thought it might not have been such a good idea to ask!
20% is perfectly respectable especially for an automated system, low and slow is good. Hey I'm no hero dazzler, far from it. 6am in my pj's and slippers sitting in front of a trading platform isn't exactly dazzling!
The reason I asked is there seems to be a lot of disbelief, resentment even, that some are making very substantial returns, maybe it's a human nature trait I don't know.
As for age, I'm catching up fast!
2007 was a learning curve for me. I plan to do much better in 2008, unless the markets crash and burn.
I am not a doomsayer, but I will respond to the person who said that currencies cannot fall to 0, that they can fall to near 0. It is just not likely, but it is possible.
For that and other reasons, I have over 20k in gold, and still think it was my best investment in 2007. Even though it did not break 1000 this year, as some predicted, I have no doubt it will in 2008. The USD has bounced back much better than expected, even though it was predicted to crash and burn. Of course, that may only be temporary.
As for possible strategies, I recently ran across another approach for supposedly making small but consistent daily profits with the carry trade.
I can't really call it a scam, because it is theoretically possible, but it appears to be difficult to implement in the real world. As most strategies are...
Open 2 trading accounts, one with the highest swap rates you can find, and the other with no swap, or swap free to handle the hedge side of the strategy.
Open a long NZD/JPY position to collect the swap, and a short hedge position with no swap.
Sit back and collect daily interest for as long as you can maintain the positions.
Periodically transferring profits from the winning side to the losing side to avoid margin calls. 6.5% is much better than most stock dividends. Not bad, for doing nothing, but maintaining a position. Not to mention the profit.
Of course, if you go long in an up or sideways market, you won't need or want the short hedge side at all.
Just exit it when the direction turns down, and reopen a new long position when it turns back up or sideways.
The short hedge side is only needed to stay in a falling market, and would not be needed if you just stay out when it is falling.
The biggest hurdle I found was getting a no swap account. They are far and few between...
Probably because of this very thing.
Then there is the Yuan, Turkish Lira or Rand, but they are another thread.
Another "strategy" I have read about is using the "WorldCurrency Options" on the Philadelphia exchange, since they have less risk than spot cash. They are similar to futures options, but I don't know what the differences, if any, are.
Like most/all options, I don't think they pay interest, and that is part of the reason I trade spot cash.
In general, I only buy stocks that pay dividends, and FX trades with positive swap, so the interest on currencies is like the dividends on stocks. I prefer options on stocks that don't pay dividends. Similarly, I suppose that for FX pairs and trades that have little or negative interest, such as shorts on the JPY, options might be a better choice, to avoid the negative swap.
Two other strategies/indicators/systems I ran across are a "Bank Buying/Selling Pressure" indicator that shows the buying & selling volume/pressure.
The other is the "Volume Spread Analysis" which similarly shows the same in more detail.
Both are touted as being leading indicators, and very reliable for direction change, and entry/exit points.
If they really are as good as they appear to be, it should be easy to extract 10 or more pips/day everyday.
Comments, suggestions?
BTW, to the people asking about IB, I have a universal account with them, and yes, they are an ECN. A universal account is nice, and in general, I am pleased with them, but their platform leaves much to be desired. Java apps are so slow, and huge memory hogs.
Also, they do not support FX hedging, or cross pairs such as NZD/JPY, which are other major negatives.
If you only trade spot forex, they are not a good choice. If you trade other things too, then they have most, but not all, of what you need.
I found a good API bridge from TWS to MT4, Trade Station and most other platforms. If anyone is interested, it is called TWSlink Trade Commander.
We should not be on the computer on Christmas day, but it is boring now, and I am already planning my trading for 2008. 2007 is already history for me.
Have a Merry & a Happy
I am not a doomsayer, but I will respond to the person who said that currencies cannot fall to 0, that they can fall to near 0. It is just not likely, but it is possible.
For that and other reasons, I have over 20k in gold, and still think it was my best investment in 2007. Even though it did not break 1000 this year, as some predicted, I have no doubt it will in 2008. The USD has bounced back much better than expected, even though it was predicted to crash and burn. Of course, that may only be temporary.
As for possible strategies, I recently ran across another approach for supposedly making small but consistent daily profits with the carry trade.
I can't really call it a scam, because it is theoretically possible, but it appears to be difficult to implement in the real world. As most strategies are...
Open 2 trading accounts, one with the highest swap rates you can find, and the other with no swap, or swap free to handle the hedge side of the strategy.
Open a long NZD/JPY position to collect the swap, and a short hedge position with no swap.
Sit back and collect daily interest for as long as you can maintain the positions.
Periodically transferring profits from the winning side to the losing side to avoid margin calls. 6.5% is much better than most stock dividends. Not bad, for doing nothing, but maintaining a position. Not to mention the profit.
Of course, if you go long in an up or sideways market, you won't need or want the short hedge side at all.
Just exit it when the direction turns down, and reopen a new long position when it turns back up or sideways.
The short hedge side is only needed to stay in a falling market, and would not be needed if you just stay out when it is falling.
The biggest hurdle I found was getting a no swap account. They are far and few between...
Probably because of this very thing.
Then there is the Yuan, Turkish Lira or Rand, but they are another thread.
Another "strategy" I have read about is using the "WorldCurrency Options" on the Philadelphia exchange, since they have less risk than spot cash. They are similar to futures options, but I don't know what the differences, if any, are.
Like most/all options, I don't think they pay interest, and that is part of the reason I trade spot cash.
In general, I only buy stocks that pay dividends, and FX trades with positive swap, so the interest on currencies is like the dividends on stocks. I prefer options on stocks that don't pay dividends. Similarly, I suppose that for FX pairs and trades that have little or negative interest, such as shorts on the JPY, options might be a better choice, to avoid the negative swap.
Two other strategies/indicators/systems I ran across are a "Bank Buying/Selling Pressure" indicator that shows the buying & selling volume/pressure.
The other is the "Volume Spread Analysis" which similarly shows the same in more detail.
Both are touted as being leading indicators, and very reliable for direction change, and entry/exit points.
If they really are as good as they appear to be, it should be easy to extract 10 or more pips/day everyday.
Comments, suggestions?
BTW, to the people asking about IB, I have a universal account with them, and yes, they are an ECN. A universal account is nice, and in general, I am pleased with them, but their platform leaves much to be desired. Java apps are so slow, and huge memory hogs.
Also, they do not support FX hedging, or cross pairs such as NZD/JPY, which are other major negatives.
If you only trade spot forex, they are not a good choice. If you trade other things too, then they have most, but not all, of what you need.
I found a good API bridge from TWS to MT4, Trade Station and most other platforms. If anyone is interested, it is called TWSlink Trade Commander.
We should not be on the computer on Christmas day, but it is boring now, and I am already planning my trading for 2008. 2007 is already history for me.
Have a Merry & a Happy
I don't like to talk about my performance because it sounds like I am bragging, which isn't my style. But I think it helps the newer traders to develop perspective.
It's all about lifestyle! I never lasted long in a regular job. I always got bored after a couple months, or I tangled with some ego driven knave of lesser ability. Being able to work in my PJs is a dream come true, and I hope to do this the rest of my life. Capital preservation is essential, as I don't want to have to start over (been there, done that).
forex-forex,
Very bold statements you have been making on this thread. I officially came to the conculsion you may have no idea what you are talking about to put it correctly. I dont mean to attack you in front of the entire world but first off, to doubt anything in respect to trading is not very smart. I have seen people take 10,000 to 10,000,000 in a couple months. Verifiable. Im not saying its an everyday occurence. But its possible. Luck on the blackjack tables, with the right leverage, will get you the same. Second, I have done an average of 122 pips for the last 33 weeks. I actually thought it was alot higher. Upon calculation I found I also had a biggest losing week of 51 pips and a highest winning week of 390 pips. I "scalp" so to speak, and have been doing it with great success. Pulled my first chart up in febuary of 2000, and just started being successful ...well....33 weeks ago. lol. But for you to say things like "450 pip stoploss" and "no way" is uneducated. I know people who average 20 pips a day, everyday, and thats it, for at least 3 months. I dont know how long they can keep it up, but I know I have no problem everaging over 20 pips a day in the end. Just FYI. But good luck to you, and happy trading.
- secXces
Substantial returns are feasible. However, like most story tellers (true stories that is), you omit certain details to make the story more.... Interesting
I have experienced "substantial" returns but I have experienced "substantial" losses as well. LOL.
GOing up 50% in a year was great. I got cocky and gave it back the next year.
My goal.... To get all the market will GIVE me. and try to give back as little as possible. I cant speak on raw numbers or percentages. I have targets per trade. Meaning.. Once I achieve a certain level of profit for the trade, I wont give it back should it run up and do a hard reversal on me.
For Forex, I desire at least 50 pips per trade. Once I hit 50, I stop watching it so closely. Like ... again... My AUDUSD trade 2 weeks ago. ran up and gave me my 50, then I relaxed and it gave another 150. I closed and took the next trade I saw, that one gave me 100 and I was done.
I dont trade Forex everyday. I wait till I see an entry, then I jump....
