Thread: 5% Growth a month?

Hey guys.
Can someone explain to me in detail how exactly DD works and just how do you know if it's say 5% or more or whatever and how can it impact a trade or long term trading account?

regards

Originally Posted by ;

Jeezus, only once you think (for once) a thread only might comprise sanity and avoid the attack of this delusionals... quote

I stopped acceptingnigeriaforextradingseriously long ago

Originally Posted by ;

Hey guys. Can someone explain to me in detail how exactly DD functions and how do you know whether it is say 5% or more or whatever and how can it impact a trade or long term trading account? Regards

Hello pauloss66,
In detail would take a while and risk boring everyone senseless but I'll try a summary. Drawdown is a measure of how far your account falls from the previous account high to the low before you get back to the old high again. Consequently, if your account topped out at #1,000 then dipped to #900 before recovering to #1,000 again, you've had a 10% drawdown. The exact same principle applies to the drawdown experienced within an individual trade, though here it's often called maximum adverse move or trip.

The importance of it for your account is in affecting your ability to readily recuperate. If you have a 10% drawdown - #1,000 down to #900 as from the example - you only require an 11% gain to get back from #900 to #1,000 again. Perfectly achievable. But if you're down 50 percent to 500 you need to double the account out there, 100 percent gain, simply to get back to #1,000 again. This is not likely, especially if you also factor in how you'll be feeling when half of the money has gone.

For a person trade, drawdown/adverse trip impacts how near or far away you need to put your stops. If your trades typically require a lot of wriggle room to come right eventually then you need the stops quite a way away, and this in turn affects how large you can exchange. You need to exchange in smaller size here than for precisely the same account with precisely the same risk profile carrying trades with nearer stops. For example, if your individual transaction risk tolerance is 1 percent of a 10,000 account, i.e. #100 cash risk, and your trades require 100 points of room then you have to exchange at #1/pt. But if your stop is just 20pts away then you can play at #5/pt, 5x larger, for the same money risk to your account.

Therefore, drawdown considerations are important, both fiscally and plogically talking and you should consider this component attentively when designing a trading method/system. Hope that helps.

Risk/Reward is private. Loe whats right for you! Only you may discover your correct objectives.
(If you'd said 5 percent every day. . I would think maybe your being a bit greedy.)

Originally Posted by ;

quote

Originally Posted by ;

quote Hello pauloss66, In detail could take some time and risk boring everyone senseless but I will try a summary. Drawdown is a measure of how far your account falls from the previous account high into the low before you get back to the older high again. Consequently, if your account topped out in #1,000 then dipped to #900 before recovering to #1,000 again, you've had a 10 percent drawdown. The exact same principle applies to the drawdown experienced in a single trade, though here it's often called greatest adverse movement or trip. The Significance of it for your account...

Yes I know that today, perfect answer, thanks to the info everybody

Originally Posted by ;

quote Hi Jack, I've been daytrading for a few years now and achieve about 5 percent pcm on long-term average but I'm not sure that one statistic has validity on its own. How I get it is by a consistent small advantage on a lot of transactions: roughly 60 trades per month, average 55% success rate, risking 1% of their account per commerce having a attained average reward:risk of about 1:1. I very rarely receive a drawdown in double digits. You get it done in a somewhat different way, 2 percent risk and 70% success rate. I imagine you trade a lot less often than I do and I've...

Hi Marcmarc,

Many thanks for your comprehensive reply, I really appreciate it.

In regards to RI risk 100 pips to create around 60-70pips using price action on the 4hr/day chart when to get out or keep. I like to tried and take small but consistent profits. I've only been doing so for 3 months, logging each trade and each month I have been about the 5-6% growth. I know its still early days believed. I intend to demo trade for 6 months then open a live one.

Out of interest what time frames fo you like to use?

I will keep you posted.

Regards,

Jack

I can't talk about the trading itself (as I'm rubish at it), but as numbers go, if you keep this average of 5 percent a month, you'll receive up really quickly (even if quickly is different for everyone).

Start with your little $5000 account, compound it at the conclusion of every year (60% increase per trading season, as stated compound at the conclusion of every calendar year, not even each month, and don't ever add any money in that exemple), also see where you're in 10 years ($550.000, meaning that you would make $330.000 annually prior to tax if you choose to enjoy life and cease growing the account at the moment) or 15 years ($5.760.000, which is $3.456.000 annually prior to tax... now we are talking lol ).

Start with $10.000 plus it's quicker, start with $20.000 and much quicker . . You have the notion of compounding.

Seriously, I only provide these down to earth, a little dumb exemples (everybody's life and goals are different) to reveal what it means to create 5 percent a month / 60 percent annually consistently.
It is HUGE!!

It might only be mind blowing (at least to me...), and also there must be a looooooot of very rich people on forum that can make way more than 5 percent per month regularly... and YES they are so bored with life and their montains of money they have to lose their time chating with losers like me with this particular forum, showing off just how great they are at making money investing.
It totally makes sense and looks legit.

Anyhow, back on track, the only small problem is you have to keep the consistency... and from my very modest experience having a good look around, it's just not that simple, like really really really not simple at all for a loooot of real individuals sadly for us all:0)

And incidentally, should you not have the real money to start the account, don't worry whether you can keep the 5 percent per month, within a year (probably a lot less) individuals with money will knock at your door, so you exchange their money and keep around 25 percent (to be discussed in the contract) of their expansion.

All the best, and good luck in your trip.
Cheers,
J-F
PS: if you hunt quite profound in forum you'll find some real journey of individuals. Just a very few, but it's worth looking profound as I personaly find it quite instructive.

The question is what is that 5 percent is that for dwelling or simply for trading? You need to consider each situation on how you can accomplish this because most of the time we neglect to do it because we are GREED enough and we aren't contented with this return. If you say you have $10K capital will probably is more than enough but if u need $100 capital then I do not think that it's enough.

However, making 60% per year at a 5 percent constant yield per month is quite impressive and just few can make it into the end..just control your risk to prevent becoming wipe out.

Good luck brother!

Stay profitable...

Originally Posted by ;

quote Hello Marcmarc, Many thanks for your in-depth reply, I truly appreciate it. In regards to R:R I risk 100 pips to create around 60-70pips using price action about the 4hr/day chart when to get out or keep. Take and I like to attempted little but consistent profits. I've only been doing so for 3 weeks, logging every transaction and every month I have been around the 5-6% growth. I know its still early days believed. I intend to demo exchange for 6 weeks then open a live . Out of interest what time frames fo you want to use? I will keep you posted....

Hello Jack,
No worries, writing everything down is fantastic revision for me, anyway.
All my trading is strictly intraday and utilizing only 5min candle charts. I trade off price action with a fresh chart, nothing on it except that the candles.
Your egy looks to be about the right path, though your R:R under 1:1 will place pressure on your required success rate. Keep practising, learning and gaining experience until you're really good. Best of luck!