50-100% monthly returns

Even though it was extremely assinine of those who claimed that he was compounding (when I specifically stated that he was not)

For the sake of argument, let's say that he was in fact compounding his monthly returns

Since he trades with FXCM, would not they at some point decide to screw him and take him out?

I am assuming that is one of his reasons for not compounding. In other words, he doesn't trust his broker to let him make all the profit that his trading skills will allow.

Or is it possible that they put him on a No Dealing Desk agreement since he has a clearly successful track record?

Again, I do not know the guy at well in reality so I am hoping that some of the more seasoned currency traders can share their thoughts.

My main question is: at what point what they switch him to an ECN type of trading account status? I can not imagine that they would keep being counterparty to all his trades since he is a pretty decent trader.
 
Quote from fxtradeprodigy:

So I met a trader who is a friend of a friend and he told me that he has consistently produced min 50% each month for the past few years.

I didn't believe him until he logged onto his live fx trading account (I know it was real because the account statement showed withdrawal amounts)...plus he drives a really nice Ferrari.

Where does this trader stand in terms of the trading food chain? Top 1%?

He also mentioned that he does this with no more than 20x leverage which he says is the reason he rarely gets emotional but more importantly, has never suffered BIG losses which he kept telling me is the real sign of a great trader.

Anyone else with these kind of stats?

I would love to hear your thoughts on reasons attributable to your success.
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The guy eventually will get blown out....they always do
 
Quote from fxtradeprodigy:

Even though it was extremely assinine of those who claimed that he was compounding (when I specifically stated that he was not)

For the sake of argument, let's say that he was in fact compounding his monthly returns

Since he trades with FXCM, would not they at some point decide to screw him and take him out?

I am assuming that is one of his reasons for not compounding. In other words, he doesn't trust his broker to let him make all the profit that his trading skills will allow.

Or is it possible that they put him on a No Dealing Desk agreement since he has a clearly successful track record?

Again, I do not know the guy at well in reality so I am hoping that some of the more seasoned currency traders can share their thoughts.

My main question is: at what point what they switch him to an ECN type of trading account status? I can not imagine that they would keep being counterparty to all his trades since he is a pretty decent trader.
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How do you even know this guy is a decent trader. How does he manage risk. That's the most important question. Who cares if he was up for 2 years that doesn't mean anything
 
Quote from Pension_Admin:

On the other hand, could it be that those 5% who know how to trade wanted the rest of the world to overtrade, so they claimed 100% monthly return is possible?
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No. I think the 5% conceive of trading capital in a manner fundamentally different from the 95% who stroll out the compounding to trillions argument.

If not prudence, then there are also the psychological reasons why someone would not compound his capital ad infinitum - even the successful traders reach a point at which they cut their profits short.

Not to mention someone pulling down monthly 5 figures tends to want to live well, in a material sense. Most people with high incomes not like Warren Buffet, content to live and die in the same small town Cape Cod in which he was born.

Which points to another difference - those who trot out the compounding argument conceive of trading as "investing," and not as a source of income. Most here at ET do not trade their own account for a living. Most are plumbers, accountants, doctors, and mechanics. A few likely trade other people's money, which means they do not trade their capital to produce an income, but draw a salary out of commissions and fees. Someone who trades for the sake of replenishing capital needed to fund their life are not thinking in terms of ROI.
 
Quote from lasner:

How do you even know this guy is a decent trader. How does he manage risk. That's the most important question. Who cares if he was up for 2 years that doesn't mean anything
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If he is doing what the the OP says he has done for two years, it is safe to assume that he has a handle on risk.
 
Quote from fxtradeprodigy:


I can not imagine that they would keep being counterparty to all his trades since he is a pretty decent trader.
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That's why they might even be quietly piggybacking on his trades, even if this sounds far fetched.

I think Ddaytrader has got many things right in his past few posts ... on the understanding that what I think does not matter much haha.

How about this little maths thing ... example here only ... using leverage on EURUSD and assuming 18 pips a day average .... 25 times leverage yields 100% on capital in 2 months .... 18 times leverage yields 100% on capital in 3 months ... all done without any compounding.

Fxtradeprodigy's friend's friend is probably doing somewhere in between these figures most days. What's EURUSD's range in every 24hour segment? Can he do 18 pips a day on EURUSD at a personally comfortable leverage level? If he can, and if he is trading something more volatile than EURUSD, or switching among different pairs to catch relatively more volatile moves, can he manage more than 18 pips a day? Certainly.

But my guess is he is trading just one pair, specializing in it and doing his job very efficiently.

By pulling out profits regularly, he can survive Taleb's BlackSwan when many traders who talk about compounding ad infinitum simply will not survive when a BlackSwan hits.

I've been trying to get just half = 9 pips a day on just the EURUSD at my own comfortable leverage level without any compounding :eek: ... many thanks in advance for not laughing ...
 
Quote from Pension_Admin:

I know a guy who made 100% in a month, but lost everything in a couple of weeks.

He should have drew out some money while he was ahead.
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Or maybe he should not have taken so much risk initially?

"Too much too fast" rhymes with blowing out usually, tha's even more true in trading.
 
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