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How Much Balance To Gain $2000 Monthly?

  • #41
  • Nov 6, 2016 1:08pm Nov 6, 2016 1:08pm
Quoting RoelsMajor
I think U need at least $10,000 Account Size with 1:200 Leverage. Twenty percent profit a month is huge. Very hard to achieve. Think that 10% to 20% per month, that would be over 120% to 240% per year. The best of the best make 20-30% per year, which is very high. Every traders claims that to be making this, and more but no one can prove it via verified statement, which is so hard to achieve, but it is always possible.
Lol

Just because you can't it doesn't mean it cant be done

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OP
There is no standard to that.

It all comes down to you & your entries & exits.

You can turn 500$ into 2000$ monthly every month
You can make a 2% on 100k account
or 20% on 20,000 account

So,first of all you need to know your strategy & outcome first,then calculate money management.
  • #42
  • Nov 6, 2016 3:35pm Nov 6, 2016 3:35pm
Quoting AntiVi
{quote} I guess you didn't read my post then
No offense intended . . . I  didn't see how your post was going to be specific to calculating the specifics of win vs loss and how to use those figures to the stated objective of $2,000 per month . 
 
Sorry I'll pay more attention next time . 
@xxxx§|[::::::::::::::::>
  • #43
  • Nov 6, 2016 4:23pm Nov 6, 2016 4:23pm
Quoting DonPato
{quote} No offense intended . . . I  didn't see how your post was going to be specific to calculating the specifics of win vs loss and how to use those figures to the stated objective of $2,000 per month .  Sorry I'll pay more attention next time .Â
Hehe no worries.
Risk management is very simple yet very few people on this forum do it properly.
Also if he wants to make 2k per month it's calculated very easily.
All he needs to do is test the strategy he's trading.
Then he can see how much he stands to gain or lose.
Then he needs to look at his max drawdown and calculate lot sizing using that and the potential risk he wants to take.
Then he needs to deduct the cost of trading from the final result and there he will have it.
His profit potential.
On top of that you can put a money management strategy behind it.

Which means he can adjust his risk % to a point where he gains 2k per month and decide for himself if the risk is worth the reward.

Most people just say "Risk 1% per trade bla bla bla" and that absolutely annoys me. It's the way the lazy or the uneducated take. It's easy but you don't end up knowing your max risk. Which means they could just throw most of their account down the drain.
  • #44
  • Nov 6, 2016 6:10pm Nov 6, 2016 6:10pm
depends on your monthly % gain target and risk reward ratio.

formula will be:

2000 / monthly target% = required capital

hope it helps.
  • #45
  • Nov 6, 2016 9:49pm Nov 6, 2016 9:49pm
if ur strategy does not have more than 3 consecutive losses then $1000 equity is enough to earn $2000 per month
  • #46
  • Nov 6, 2016 11:15pm Nov 6, 2016 11:15pm
Quoting coldvinc
{quote} Well, losing is also part of life. It's money that I didn't want to lose but I wasn't dependant on it. {quote} Intersting to read, but could you please also explain why you say this? In my post I stated that you should only risk about 2% to 3% and have a 2:1 RR ratio (at least). This should result in a positive expectancy even if you have a los level of 60-70%. I guess 2:1 might be a bit low, lets say a bit more, 2.5:1. You basically need to be (even a little) worse than a coin flip, have at least 2:1 RR and only risk 2% and you will never...
IMO, The RR ration is useless because it makes a prediction based on past data and it implies using hard stops. However, risking less to the point that any single trade is insignificant is the way to preserve the account. Then you can start trading your account equity and not your account balance.
  • #47
  • Nov 6, 2016 11:34pm Nov 6, 2016 11:34pm
Yes, it is possible to earn $1000 to $2000 per month but you required strong strategy and focused mind which can bring you right trade for having high profit with market.
  • #48
  • Edited 3:12am Nov 7, 2016 2:24am | Edited 3:12am
Quoting Mingary
{quote} IMO, The RR ration is useless because it makes a prediction based on past data and it implies using hard stops.
However, risking less to the point that any single trade is insignificant is the way to preserve the account. Then you can start trading your account equity and not your account balance.
My post states that you can risk about 2% of your total balance. I state a R:R of 2:1 to have a decent return which also provides peace of mind. It doesn't necessarily imply a hard stop as I never specified your minimum lot.
I only provided lot sizes earlier as an example for a trade so that it's easier to grasp what I meant.

Say you have 50K, 2% of 50K = 1K max loss for your trade.
Then depending on your stop which, according to the rules of your plan, is set below the low of the previous dip. This is for example 10 pips, so you are close to the bottom.
1K/10 means 100 USD/pip => 10 lots.
2:1 risk min means 20 pips profit target, maybe 25 again depending on your strategy.
Say you win, that's 2500 profit.

The next trade you enter might require a stop of 30 pips.
52500x0.02 = 1050 USD max loss.
1050/30 pips = 35 USD/pip => 3.5 lots.
30x2 = 60 pips target estimate => 60x35 = 2100 USD possible profit
.
.
.
Etc.

But things like your stop and tp will depend on your strategy. However, in general I recommend at least 2:1 RR and a tight enough stop because most of the time you will notice if you are correct fairly quickly.

P.S.: RR can ofcourse be ignored if you cought a trend and are able to ride it
  • #49
  • Nov 11, 2016 12:58am Nov 11, 2016 12:58am
To really make $2000 monthly, there is not really any conventional balance you should have. What you more importantly need is experience; how good are you with your trading system as well as how effective your risk management practice?
  • #50
  • Nov 28, 2016 4:40pm Nov 28, 2016 4:40pm
i have seven years hard experience, the number u r asking been changing for me very year. now i do know i need at least $50000 to make $2000 monthly.
may trend be with you
  • #51
  • Jul 13, 2017 7:01am Jul 13, 2017 7:01am
It depends on your trading skill, even you can make more than 100% profit monthly! By the way, I seem 10% is always a decent monthly target! Yes, right now I am also using the same target! Expecting more, is always a problem! So, select your target based on your trading strength.
  • #52
  • Jul 13, 2017 7:06pm Jul 13, 2017 7:06pm
Quoting RoelsMajor
I think U need at least $10,000 Account Size with 1:200 Leverage. Twenty percent profit a month is huge. Very hard to achieve. Think that 10% to 20% per month, that would be over 120% to 240% per year. The best of the best make 20-30% per year, which is very high. Every traders claims that to be making this, and more but no one can prove it via verified statement, which is so hard to achieve, but it is always possible.
lets see..

1.- 10/20% a month is huge and very hard to achieve?? if you have a 2000$ account thats between 10/20 bucks a day.. thats to hard to achieve??

2.- 20/30% a year from the starting capital its a very mediocre performance.. lets do the same math:

2000$ account

30% a year ("very high" lol) = 600 $

20 trading days a month * 10 months (i give you a 2 month vacations) that would be 200 days to achieve 600$.. wich is.. wait.. get ready.. 3 bucks per day..

interesting...
  • #53
  • Edited Jul 14, 2017 10:40pm Jul 13, 2017 11:36pm | Edited Jul 14, 2017 10:40pm
Some FF members say that a consistent 50%+ per month is possible. But sadly, they never seem to keep a myfxbook, hence their claims are merely anecdotal, and unsubstantiated. And for how long would that return be realistically sustainable?

At the other extreme, there are FF members who insist that trading is all luck; that profiting systematically is totally impossible. They likewise offer little in the way of hard evidence.

From the institutional folk I've spoken with, a good institutional trader makes anything between 15% and 50% per year, and their returns fluctuate more than the uninformed outsider might expect. Anything above 50% is outstanding. Admittedly they're constrained by company policy, industry regulations, and possibly slippage (if unwinding especially large positions in less liquid instruments). But they also have significantly more expertise, higher quality information, and access to vastly more capital, than the average amateur who posts here -- all of which works in their favor. So all in all, it's probably not an especially meaningful comparison.

To some extent, return is a function of risk. In other words, if you risk 1% per trade, and make 5% per month, you could risk 2% per trade to make 10%+ per month, or 3% for 15%+, and so on. Obviously increased return = increased risk = increased maximum drawdown; hence return ultimately comes down to how much drawdown you can safely bear, and without losing emotional composure. Return is also a function of trade frequency (how many quality setups you can find depends on how many hours you spend at the computer), and compounding frequency. It's also a function of consistency: the more consistent your trading results, the larger the positions you can safely take. Risk can also be lowered through savvy use of diversification. I posted about all this here.

There's a lot of theoretical math in the preceding posts. Every newcomer creates some kind of number-crunching XLS ("If I make X% per trade, Y trades per week, with a win rate of Z%, then my annual return will be...."). But this type of math is a waste of time, as what is theoretically possible has little bearing on what's realistically achievable.

So the question "how much return can I possibly make?" can't be answered, at least not without knowing a host of other variables, some of which are largely intangible. The answer to "how much return am I likely to make?" is a negative number, since -- unless you have superior aptitude, information, capital, and other necessary personal qualities to the average amateur -- statistics show that the vast majority of wannabe traders lose. And without wishing to seem too critical, I suspect that among those are folk who suffer from optimism bias, and/or the Dunning Kruger effect.
  • #54
  • Edited 12:44am Jul 14, 2017 12:23am | Edited 12:44am
Quoting hanover
From the institutional folk I've spoken with, a good institutional trader makes anything between 15% and 50% per year, and their returns fluctuate more than the uninitiated outsider might expect. Anything above 50% is outstanding.
Great post H :-)

Putting things into perspective, the best performing funds in history with data going back by at least 20 years have averaged between 20 and 24% compound annual growth. Here is the list. Six of these were trend followers.

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...and from a risk weighted return perspective which is a more appropriate basis to assess performance such as the MAR ratio = (CAGR/Max Drawdown) the top performers in the trend following camp since 1 Jan 2000 to 30 June 2017 are as follows:

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What the list above shows is that the best performers have a CAGR of approximately 50% of their max drawdown. If you want a return of 30% then expect a drawdown over the long term of +/- 60%......and this is for the best of the best in the FM space.

If you want to quibble and talk in terms of gross returns as opposed to net returns after fees then add another 2-4% onto the net CAGR to derive the funds GR.

Talking in terms of returns over a year or so has really no meaning as it could be the result of luck, luck plus leverage, skill or skill plus leverage or any combination thereof. What is clear however from what Hanover mentioned is that there is considerable variability around these returns on a month to month and even year to year basis as market conditions change.

Any return can be scaled up or scaled down using position sizing. What stays far more constant and is a far better performance metric to use to assess 'performance sustainability' is the risk-reward relationship (risk-weighted return).
  • #55
  • Jul 14, 2017 2:31am Jul 14, 2017 2:31am
Quoting Copernicus
Putting things into perspective.......
C,

We keep following each other around with the "nice post" responses. I wonder how long it will be before somebody accuses us of being the same person with multiple usernames. LOL

You've filled in some of the gaps I left. I'm familiar with MAR, I believe it's very useful, in terms of giving return a meaningful context.

I see Bill Eckhardt at the top of the list. I assume that's the same gent who had the 'Turtles' bet with Richard Dennis. Most of the others are household names, even in my myopic world.

I'm not sure how apt it is to cite large fund returns when it comes to answering the question "how much can the amateur forex trader make?". But IMHO it gives pause for some humble thought, if one considers just how much more expertise and information an institutional trader has over the amateur. Yet one has to look back only a few posts to see folk scoffing over a 20%-30% p.a. return. Of course there's a big difference between anecdotal or theoretical performance -- or possibly 'hoped for' performance -- and verified results over several years. I expect that a lot of the comments here are based on either guesswork or hearsay. To be fair, though -- and without wishing to be unkind to anybody -- this is the 'Rookie' section.

Thanks for your reply sir. And oh yes, "nice post".

D
  • #56
  • Jul 14, 2017 2:34am Jul 14, 2017 2:34am
Quoting hanover
{quote} C, We keep following each other around with the "nice post" responses. I wonder how long it will be before somebody accuses us of being the same person with multiple usernames. LOL You've filled in some of the gaps I left. I'm familiar with MAR, I believe it's very useful, in terms of giving return a meaningful context. I see Bill Eckhardt at the top of the list. I assume that's the same gent who had the 'Turtles' bet with Richard Dennis. Most of the others are household names, even in my myopic world. I'm not sure how apt it is to cite...

Hehehe. We have a Trans-Tasman thing going on mate. Totally agree H. :-)

PS Yep that was Bill Eckhardt of Turtles fame. Interestingly Jerry Parker was also an ex-Turtle. Slow and steady wins the race it appears.
  • #57
  • Jul 18, 2017 9:11am Jul 18, 2017 9:11am
Quoting surekobai
How much one needs in his/her account so as to logically gain $2000 monthly. Thanks and God bless you all.
From personal experience, 10k is just right to comfortably make 20% a month. However, do not expect to get there right from the start. First you need to gain experience (counted in years), find a method that suits your personality and perfect it over time to achieve confident consistency.

There is no right or wrong method in trading. There's only you, your method and your money management.

Good luck!
  • #58
  • Jul 18, 2017 4:00pm Jul 18, 2017 4:00pm
In order to my trading experience , I think how much you can earn fro, this trading place it not depends on trading balance. It completely depends on your trading strategies as well money management.
  • #59
  • Jul 26, 2017 8:45pm Jul 26, 2017 8:45pm
1. Has your trading system been tested to be consistently profitable over time?

2. And you forgot the most important question, the question that a lot of mediocre traders hates/avoids answering,
How much can you afford to lose a month/year? Your maximum drawdown

3. Next, how much return on average in terms of percentage can your system typically make a month?

4. Now that you know your percentage risk and return per month, you should be able to calculate the minimal amount you need in your account.
'For the market to work, it needs people who think that they can beat it.'
  • #60
  • Jul 27, 2017 7:04am Jul 27, 2017 7:04am
The whole concept of earning $2,000 per month from trading is rather a misleading one.

The reality is that an average income of $2,000 per month might vary monthly between +$1,000 and +$3,000, or even between -$4,000 and +$8,000, depending on one's approach to risk management.

If able to trade successfully on demo, or on a tiny account, for a year, with an average profit of 5% on capital, then it "should" require $100,000 capital to earn an average of $2,000 per month.

Wording it that way makes me wonder what proportion of the forum's members has ever managed to trade for a year with an average profit of 5% per month.

Some people on the trading floors of investment banks can do it, and that's usually with no leverage.
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