5% per month possible?
Does this answer your question? It's caped off at 25 lots. :)
Bars in test 66931
Ticks modelled 133750
Modelling quality n/a
Mismatched charts errors 0
Initial deposit 5000.00
Total net profit 10866237.40
Gross profit 49610172.40
Gross loss -38743935.00
Profit factor 1.28
Expected payoff 1438.67
Absolute drawdown 585.00
Maximal drawdown 555025.00 (9.05%)
Relative drawdown 38.92% (3028.80)
Total trades 7553
Short positions (won %) 3876 (54.57%)
Long positions (won %) 3677 (54.91%)
Profit trades (% of total) 4134 (54.73%)
Loss trades (% of total) 3419 (45.27%)
Largest
profit trade 92600.00
loss trade -42000.00
Average
profit trade 12000.53
loss trade -11331.95
Maximum
consecutive wins (profit in money) 13 (134175.00)
consecutive losses (loss in money) 14 (-155600.00)
Maximal
consecutive profit (count of wins) 220875.00 (4)
consecutive loss (count of losses) -172400.00 (10)
Average
consecutive wins 2
consecutive losses 2
Does this answer your question? It's caped off at 25 lots. :)
Nice, ubzen, but it doesn't answer the question.
Are you trading real money with consistent profitability?
If so, can you tell us what you do?
Of-Course I'm NOT trading real money yet :). I taught your question was asking for possibility of making 5% every month that's why I provided the picture. I've never shake the hands of someone who does this but I've heard of them and I'm sure you have too. So can 5% per month be made constantly, IMO Yes. Can you and I do it? Well thats what I'm here to find out.
If I'd consider making 5% or more per month, I'll definitely employ your questions in this order. 1) I'll take 5% risks only if the system I've developed or promised is showing a 5% edge. 2) Yep, many little trades would be my approach.... Either give me More winners than losers.... or give me Bigger winners than Losers... Either way I don't discriminate. I would Trade a system with ($10-tp to $100-sl) just as comfortably as ($100-tp to $10-sl). There's no universal math that says the later is better. 3) It's get rich or die trying, I don't subscribe to gambler's fallacies that because I'm too Hot, I'm due for a Loss.... Or because I'm too Cold, I'm due for a Win. When the ducks line up, I pull the trigger. Thats my mind set going into this. If I stop playing, It'll not be because of Fear or Greed rather because I'm rich and moving on.
Of-Course I'm NOT trading real money yet
If not, I highly recommend it https://www.mql5.com/en/articles/1571
If you follow all the links in that article, you will eventually come to https://en.wikipedia.org/wiki/Kelly_criterion
I think that has to be my starting point in developing a strategy that produces a steady profit of 5% per month.
Wow OMG, someone who knows Kelly. Are you really asking a Self-Proclaim Professional Blackjack player about Kelly Criterion? I live, eat, dream, die and breath Kelly, tho.... I couldn't give you the formula to save my life. {Humm...what does that say about me}. I can always look it up I guess. As far as Money Management goes, AFAIC it's the Only one that matters.
Below is my understanding of Kelly. Can the math guys in this forum please correct any mis-information I'm writing. I'll appreciate it: From what I've noticed, most traders/investors consider Kelly/Optimum-f aggressive or risky. Why, because at full-Kelly or you can call it Kelly standard 1, your Risk of Ruin is about 13%. Anything, above 13% ROR and you're Over-Betting and you WILL lose in the long run. It's a mathematical Fact if you believe in that sort of thing.
Kelly defined loosely would mean if you have a 5% edge, then you should bet 5% of your Bankroll. If you're only betting 2% then you're Under betting your Bankroll and would be better off throwing the other 3% in a money market, savings account or another investment. The bad news with Kelly is that at Full Kelly, allot of people cannot stomach the Swings. Hence, most experts would recommend that you use some multiple of Kelly say 1/2 half-Kelly. Can't quite remember where the ROR is for 1/2 Kelly but I believe its about 5%. Even more bad news as allot of people still cannot handle 5% ROR Swings. Hence they find the need to break it down to about 1/4 Kelly with ROR of about 1-2%.
If you look at my system above, (please forgave me again for defining edge loosely):
Short positions (won %) 3876 (54.57%)
Long positions (won %) 3677 (54.91%)
As you can see, It's got winning of about 54.57% to 54.91% which means I'm winning more than my 50-50 share and an edge of almost 5%. Assuming this was the results I've gotten on fixed bets or before position sizing. Risking 4.57% to 4.91% per trade would be justified than opposed to the 2% max risk recommended by everyone. Max draw-down looks great at 9% even after all the Lot sizing. But here's where the human aspects comes in:
consecutive losses (loss in money) 14 (-155600.00)
How many of us could lose $155,600 and not try to free-fix the system or decrease our position sizes during those times. Honestly allot of people who's not used to this kind of money can't do it. I've seen Gamblers of all walks of life. Some people just have total disrespect for money. Others can't risk a penny to save a dollar. Most of us would start spending the money within the first 3-years before it really toke off. Which comes with it's own adjusted risk on your Bankroll, sorry Investment Capital :).
So the simple question you ask of can someone make 5% per-month constantly usually translate to can You make 5% per month constantly.
How many of us could lose $155,600...
When I was a broker, there was a day (once only) when I lost $150,000. It so happens that I was booked in for a stress test the same day. I passed the test with flying colours. Yes, I can handle a loss of $150,000 as easily as I can handle a profit of $150,000 – it’s not money, it’s a number on a piece of paper.
That’s where you and I differ. You saw your winnings at Blackjack as MONEY and you spent it on good wine, nice dinners and beautiful women (can you sense the envy?).
Anyhow, getting back to Kelly. In its simplest form, the equation is f=2p-1 where f is the fraction of your bankroll to risk and p is the probability of winning in an even-money event.
Would you call a position in forex with equal stoploss and take profit an even-money event? If so, then your probability of winning has to be 0.51 to double your initial risk of 2% of your bankroll as recommended by most gurus.
Can this be done?
Is it possible to reliably make an average profit of 5% of your bankroll each and every month?
The problem with this question is that it's closely related to the question "Is everyone other than me an idiot?"
The world over, people are happily accepting far lower investment returns than this, and with much greater risk attached than is implied by your "each and every month". This includes the very large numbers of people who are professionally employed to manage money. If it's possible to make a consistent 5% a month, why do things like equity mutual funds - containing vast amounts of institutional as well as retail investment - exist? Stupidity?
Or, putting it another way, using the old fool-in-the-market adage, it's difficult to explain why a belief that you can make a consistent 5% per month isn't equivalent to believing that everyone else on the face of the planet is the fool in the market.
The problem with this question is that it's closely related to the question "Is everyone other than me an idiot?"
The question on my mind is "is everyone cleverer than I am?". I suppose it amounts to the same thing?
Actually, what prompted the question is that there is a trader who will try to turn $1,000 into $30,000 in six months in public view.
The demonstration will commence on Monday, August 2, 2010. I will be on holidays at the time but will watch it when I return.
This is MILES above my expectation to turn $1,000 into $1,300 in six months.
On a previous attempt to turn $560 into $30,000 in six months the attempt failed after many weeks of glorious endeavour.
The trader is to be congratulated for his valour but I think his ambitions are extreme, likely to lead to another failed demonstration.
What do you think? Can such an ambitious target be achieve in forex?
If you are interested, I can give you the link to the blog where the demonstration is being conducted.
Actually, what prompted the question is that there is a trader who will try to turn $1,000 into $30,000 in six months in public view.
The demonstration will commence on Monday, August 2, 2010. I will be on holidays at the time but will watch it when I return.
This is MILES above my expectation to turn $1,000 into $1,300 in six months.
On a previous attempt to turn $560 into $30,000 in six months the attempt failed after many weeks of glorious endeavour.
The trader is to be congratulated for his valour but I think his ambitions are extreme, likely to lead to another failed demonstration.
What do you think? Can such an ambitious target be achieve in forex?
If you are interested, I can give you the link to the blog where the demonstration is being conducted.
Hey this is interesting. Please provide the links. I really want to see this. As for making 5% a month, you can make higher than that.
1) Trend following.
2) Tight stops (not too tight please . If I recall you use 15min charts so your stops shouldn't be that large)
3) Let your profits run, and be creative with breakeven tactics.
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Is it possible to reliably make an average profit of 5% of your bankroll each and every month? If so, what strategy would be best? For example…