Make a living trading FOREX?

[elwalvador]

Quote from IronFist:

Winners buying from/selling to many people.

I don't get it. Isn't there always an equal amount of buyers and sellers. For every buyer there is a seller. How is it possible that the ratio of winners and losers closer to 50-50?

I ask this same question on youtube

90 percent of traders lose money in the markets
http://www.youtube.com/watch?v=5BhzFNSdzz4

 

[TraderZones]

Quote from elwalvador:

One thing I don't understand is, how can the popularly touted statistic that over 90% of traders lose money in the market be correct?

If there is always a buyer for every seller and visa versa shouldn't that mean that at any given time half the people are holding a winning positions and the other half are losing?

In other words, why isn't the statistic 50% winners and 50% losers?

Well, if you stop approaching it like a starry-eyed 3 year old.

Think about it. Do 50% of longterm gamblers win and 50% lose? or does almost all the money go to the house and/or professional gamblers?

With your level of knowledge, you shold stay far far far away from trading. You are a walking landmine.[/size]

 

[yubitsu]

Quote from TraderZones:

Well, if you stop approaching it like a starry-eyed 3 year old.

Think about it. Do 50% of longterm gamblers win and 50% lose? or does almost all the money go to the house and/or professional gamblers?

With your level of knowledge, you shold stay far far far away from trading. You are a walking landmine.[/size]

LOL I choked on my drink when I read his post.

Why are you telling him to stay away from trading? The market needs guys like him.

 

[elwalvador]

Quote from TraderZones:

Well, if you stop approaching it like a starry-eyed 3 year old.

Think about it. Do 50% of longterm gamblers win and 50% lose? or does almost all the money go to the house and/or professional gamblers?

With your level of knowledge, you shold stay far far far away from trading. You are a walking landmine.[/size]

I'm asking so I can learn, and your not giving a good explanation of how or why that statistic is true. You've simply vaguely compared day trading to Vegas. What game in Vegas are you comparing it too, poker, rouelette?

If you don't have any useful information, STFU.

 

[TraderZones]

Quote from elwalvador:


If you don't have any useful information, STFU.

I am giving you very useful information. The problem is, you have no idea what you are doing. You are not even ready for "Trading for Dummies." As evidenced again by your having no clue about the relation between trading and gambling.

Maybe if I wrote it in Latin, you could have bowed low a few times and genuflected. You still would not understand what I was saying, but the bruises on your forehead just might stir something loose.

Think about this. Some come to the Fount of Knowledge to drink. Others (like yourself) come to gargle...

 

[TraderZones]

Quote from yubitsu:

LOL I choked on my drink when I read his post.

Why are you telling him to stay away from trading? The market needs guys like him.

Sad, isn't it??? So ready to turn over his coins to "the other 50%"

 

[elwalvador]

Quote from TraderZones:

I am giving you very useful information. The problem is, you have no idea what you are doing. You are not even ready for "Trading for Dummies." As evidenced again by your having no clue about the relation between trading and gambling.

Maybe if I wrote it in Latin, you could have bowed low a few times and genuflected. You still would not understand what I was saying, but the bruises on your forehead just might stir something loose.

Think about this. Some come to the Fount of Knowledge to drink. Others (like yourself) come to gargle...

You're clearly looking for a fight. Unfortunately, for you, I didn't come to this forum to start internet fights. Find somebody else to fight with cause it's not me.

 

[JB3]

I would say if the trader does have not a $100K account, it is highly unlikely he is trading for a living (in the US). I would say you need at least $50K per year return for living expenses in the States. So a trader would need to return $70k year in and year out (after tax, he may pull out $50K to live on) just to stay at his level.

So for that to happen, he would need to return 70% just to live.

Obviously, the higher the stake, the easier it is to trade for a living and grow the account.

First, you must be an exceptional trader to return anything remotely close to that consistently. So right there, you need to be in the top 5% of traders. Then you need to have that kind of stake money, so that would put you probably in the 1-2% range of all traders. So yeah, those are the odds.

 

[cabletrader]

Quote from JB3:

I would say if the trader does have not a $100K account, it is highly unlikely he is trading for a living (in the US). I would say you need at least $50K per year return for living expenses in the States. So a trader would need to return $70k year in and year out (after tax, he may pull out $50K to live on) just to stay at his level.

So for that to happen, he would need to return 70% just to live.

Obviously, the higher the stake, the easier it is to trade for a living and grow the account.

First, you must be an exceptional trader to return anything remotely close to that consistently. So right there, you need to be in the top 5% of traders. Then you need to have that kind of stake money, so that would put you probably in the 1-2% range of all traders. So yeah, those are the odds.

In theory but not necessarily in practice.

What does the average profitable forex trader make per month, around 4 or 5% on average at this level? Let's be conservative and say 3%. Compounded that's around 42% per year so he would need closer to 170k capital, if he compounds for a year before he draws out any of his profits. Then there's inflation to take into account.

But....if he's making those kinds of returns consistently then it's quite likely he will be trading money for other people as well, it wouldn't be unrealistic to say he's built up a small fund of a couple of million without too much effort but being conservative let's say 1 million (peanuts in the scheme of things). To be competitive let's say he's charging clients 1% management fee pa (10,000) plus 15% of high water mark gains (63,000), that's fairly cheap by industry standards. Bottom line, he doesn't actually need any capital of his own at all!

So now it's looking a bit more realistic and achievable. A small fund of 1 million, returning less than .15% per day on average....73k, job done, it's a walk in the park

And all those figures can be improved on significantly, especially if he adjusts compounding over and above the 'norm' and/or takes on a partner trader and more clients.

It's money for old rope!

 

[cvds16]

Quote from elwalvador:

One thing I don't understand is, how can the popularly touted statistic that over 90% of traders lose money in the market be correct?

If there is always a buyer for every seller and visa versa shouldn't that mean that at any given time half the people are holding a winning positions and the other half are losing?

In other words, why isn't the statistic 50% winners and 50% losers?

if you are asking such a dumb question you shouldn't even start trading DUH !