What is the realistic profit goal from forex?

[ddunbar]

Quote from sccz97:

unless enough ppl start using it I fail to see how the liquidity will even beat the poor liqudiity on fx futures in its current state. I can but hope

Poor liquidity on FX futures? You must be a BIG trader! Can't wait to read the write up on you in Trader Mag's 100 biggest next Spring. j/k. (Or maybe you're not trading Euro FX. Then yeah, I understand.)

But you might be right. It might actually cannibalize a portion of CME's FX Futures business since you'll be able to trade spot through it. The advantages FX Futures offer today won't be there when FX marketspace comes on the scene. The only one left after that is the spread on FX futures being mostly 1 pip. Sure you can get close to that now with Oanda and their 1.5p. Even IB has their 1 pip occasionally - 2 pip average. But I think FX Marketspace, if it takes off and it probably will given CME's success at such things, will spell the end of the bucketshop market makers. FCMs at large will be able to offer spot. Large banks who are used to dealing with large players will probably want a piece of the small order action (<$1m). FX marketspace should make that feasible.

 

[OddTrader]

Quote from sccz97:

unless enough ppl start using it I fail to see how the liquidity will even beat the poor liqudiity on fx futures in its current state. I can but hope

Unless more new customers to join in, otherwise the existing futures traders may even switch to spot if this spot is truly good and better than futures.

 

[sccz97]

Quote from ddunbar:

Poor liquidity on FX futures? You must be a BIG trader!

only eurfx really has the consistent liquidity certain traders will need to choose selecting futures over spot. When the market is quiet you can probably get 300-400 contracts within a 5 pip spread on either side which is of course enough for most ppl but nothing compared to spot fx. Now take a look at the volume available when you've got major news coming out, you're not gonna get anywhere near enough nad this is just eurfx. Sterling v usd futures is shocking, you'll see spreads in double digits.

 

[DrawDown]

Quote from Bitstream:

coniz get u self an education before blowin' up your 10th 500 dollars acct in the fx mkt.

I'm only up to 8 accts... for $400.

So there.

dRaWdOwN

 

[Sir_Pirate]

"Sustaining Momentum

As a trader makes more and more money, the added profits tend to count for less than the value of preserving the money obtained earlier.

The preservation of capital becomes more important than the increments to be made from putting more at risk.

Some of this is explained by Bernoulli's principle of utility, which says that utility or value resulting from an increase in wealth is inversely proportional to the quantity of goods previously possessed. Therefore, as traders succeed, they are less inclined to want to risk themselves to make more.

The only way around this is to keep concentrating on repeating
good behavior, and to stick with their trading strategy.


That's the essence of mastery rather than mere goal setting.


Mastery encompasses the ability to sustain momentum. It is not uncommon for traders to blow up just as they are reaching their financial targets.

How come imminent success raises anxiety levels?

Because success represents entering the realm of the unknown.

Success actually can stimulate fears about failing and about the impossibility of success. These increased anxiety levels may result in selfdestructive behavior and a succession of losing trades that bring the trader back to the starting point."

Trading to Win
THE PSYCHOLOGY OF MASTERING THE MARKETS
Ari Kiev 1998

This was written while working for Steve Cohen. Steve Cohen has returned over $1B profits in the recent past year.

"Cohen's funds have risen at an average annual rate of about 40% before fees since his firm started trading"

For Bernoulli utility theorem and risk aversion:

http://www.econport.org/econport/request?page=man_ru_basics4
http://www.econport.org/econport/request?page=man_ru_basics3
http://72.14.221.104/search?q=cache...df+bernoulli+utility&hl=es&gl=es&ct=clnk&cd=4

regards