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What is possible for a trader to make, consistently?
Over the years, I've asked traders a question, and never really gotten a good (in my opinion) answer. The question is: What would a person with a $10,000 trading account and basic options approval use as a consistent method to make $1000 per month net profit in the market, including options, futures or forex? Or, is that even possible?
Can you help answer these questions from other members on NexusFi?
This question came up in the "I need help with ... (ask any question) thread". We typically set up a new thread featuring the member's question for the other members of the forum to have a look at it and suggest answers, which tends to create good discussions.
In this case, I first gave an answer I thought made sense, and then created this thread for others to think on and respond to the question. It's a major one, if you think about it. Here is basically what I said:
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Well, I think there's a good reason you haven't gotten an answer, or actually several good reasons.
1. Most traders do not succeed at trading and eventually drop out. Trading is not an easy path to a lot of money, or to much at all except for a few.
2. You are asking for a mind-boggling amount of money from a small amount of capital. You're talking about 10% a month, net after losses, every month. That would not multiply out to 120% a year, it would be more, if the trader plowed the month's profits back into their account and so compounded the returns. In a few years, with compounding, we're talking about an unreal return.
3. Suppose someone knew of a "consistent method" to do this? Would they share it with you? No. Not ever. They would just use their money machine to crank out money and retire to their yacht, or perhaps to their private island or their castle in the Alps.
This may not be the "good" answer you wanted, but it is a realistic answer.
But, since it's just my answer, I'm going to put your question out to the forum and see what others think is possible.
I'll generalize the question to ask what people think is possible for a trader to make consistently, and how they would get it, and we'll see what answers we get.
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Anyone? Note that it isn't necessary to give the "prudent" answer that it's too much to expect. What is it that you expect? What do you aim for?
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Good afternoon,
I was browsing the forum and came across this interesting question. I just blew another account (one of many) and sometimes I doubt if it's possible to become consistent in trading. Yesterday I watched a video of a mathematician who works for some investors, and the question he posed sunk me even further: that traders who work for large investment firms don't use technical analysis. Now I only have the option to take some time off and redo the entire trading plan, study it in simulation, and see what results it yields; before daring to trade with a real account again. Is there really anyone here who is consistent, who has been trading for more than 5 or maybe 10 years and is able to grow their account even if it's just a tiny bit year after year? Sometimes I just feel like passively buying gold or bitcoin and doing something else. I appreciate if someone can shed some light at the end of the tunnel. Regards.
Here is a journal of an individual doing 10,000 a month. It’s possible but it requires time just watching the charts and divining your own patterns and perspectives from the charts. Get out of funded trader programs, and get in the real market. Micros are one dollar a contract. This will put you in the real market, where you can develop your emotions.
As the title states...this trade journal chronicles my efforts at using a futures account with AMP trading on the MT5 platform for monthly income. My goal is to consistently make $10k/month. I opened the account 10/1/23 with $10k.
The account balance …
Chaos at one level of magnification is harmony at a higher level of magnification.
I've seen this said in many places, that "traders who work for large investment firms don't use technical analysis".
Arguably, maybe, if the investment firms are large enough, the traders might do no TA because other, non-directly-trading people are employed to do it(???). But apart from that, even with my very limited experience and knowledge, I know that the statement above is simply untrue.
All those longstanding expert institutional traders interviewed by Jack Schwager in his three Market Wizards books, many of whom discuss, explain and comment in some detail on the indicators used on their former and current trading floors are not just making it all up for fun.
And the standard French settings for the MACD indicator, for institutional forex trading, are not now known in the industry as "French settings" just to lead people astray. It's from their having been developed and used for decades formerly at Crédit Lyonnais and currently at Crédit Agricole, by institutional traders.
The authority websites like Investopedia are not just bluffing when they state that indicators are very widely used by institutional traders.
I think the textbooks by former and current institutional traders (like Dynamic Technical Analysis, publ. Wiley Trading) in which institutional trader authors discuss some of their trading-floor charting indicators are not all ill-informed.
I think that all the in-house traders at Japanese banks claiming to use their own different settings of Ichimoku indicators are not all bluffing, either.
Thank you very much for the link. I'm following it with great enthusiasm. There's a similar indicator that combines Heikin Ashi, MACD, and Stochastic, here on nexusfi.com (for Ninja Trader 8, which is the platform I'm currently using), called RSI HeikinAshi Oscillator (HARSI). I've been experimenting with it, and I find it very interesting. Take a look. Best regards.
Well, perhaps that was the answer I needed to hear. Sometimes one has terrible days. If you could recommend a couple of trading books that you consider very good, I would greatly appreciate it. Thank you for your response and best regards.
Mostly because I think this is the wrong question to be asking.
The first and most pressing question is/should be: How do I stay viable tomorrow? That IS to say that RISK is always first...how do I stay in business.
There is a huge pile of actual scholarly research that says the OVERWHELMING volume of participants on the day time frame, go to zero pretty fast.
Almost all of my colleagues from the most competitive trading floors in the world, went bust or struggled mightily trying to transition to the screen. Granted, it is an entirely different skill set and completely different "edge"...But those are the most competitive and skilled traders in the world.
I think what happens in retail is someone gets a small account open and hopes they can parlay 10,000 into 1,000,000 from their cubicle at "work". Can that be done? Absolutely. The risk allocation to "add a zero" to a 10,000 account will also take a person right to zero.
There is data shown in this thread that implies a VERY high win rate while showing almost no draw down. Just do that.
Many traders who work at large funds absolutely use technical analysis. Automated strategies are very often heavily technically based. Here is an example of a strategy a fund might use, and it's purely technical: https://www.menthorq.com/guide/volatility-control-fund-model .
As for blowing up accounts, I've had my fair share of that too. Do you have a daily/weekly/overall loss limit? If you do, it's hard to "blow" the account as you will have worked in parameters on how to recover from predefined levels of drawdown. A great source for info on this is the linked video. I took notes from it and integrated the specifications (I don't like the word "rules" but it's what it is) into my plan.
