Thread: What is your monthly or annual capital (ROE) profitability objective?

My goal is 5 % monthly, although I usually finish between 10 % and 15 %.I prefer to focus on managing the risk that in maximizing profits.After years of experience and errors, I learned to let the profits accumulate.There are no management rates, I seek to keep taxes low and diversify with other investments.But nothing exceeds to operate on your account in the Forex market with current brockers.

Talking about profitability without mentioning the drawdown makes no sense.For example, if you get 5 % monthly, you could earn 10 % simply duplicating your position sizes, or 15 % tripling them.But you would also increase your drawdowns proportionally.That is why you need a solid performance history to understand your worst drawdowns and adjust the size of your positions accordingly.Managing risk and drawdown should be the priority for any serious person.Without a solid strategy, your profits will disappear in the next drawdown.

I agree that the drawdown is crucial.It doesn't matter how much you win if you lose everything in a bad streak.Operating is a business, not a lottery.Amateurs traders focus on profits, but professionals focus on risk management.It is a big difference.

Thank you all for the answers.It seems that I have to improve my approach to risk management and not only in profits.Does anyone have a practical advice to reduce drawdowns without sacrificing profitability?

Yes, use low leverage, operates less frequently and prioritizes high probability settings.Patience pays much more than constantly operating.Do not obsess with maximizing profits.If you reduce your losses, your net gains will increase automatically.

I have been analyzing my performance and I realize that my problem is not so much profitability, but to maintain the profits I get.I usually have months with 15 % or more return, but then I have a disastrous month that takes everything earned.Any advice to avoid these great setbacks?I am thinking of reducing leverage and establishing a monthly loss limit, but I am not sure how to implement it correctly.

Reducing leverage is a good start.You should also consider closing operations after reaching a reasonable monthly objective.You do not need to squeeze each market pip;Sometimes, less is.In addition, if you have a disastrous month, you are probably risking too much for operation or making emotional decisions.Identify those mistakes and correct them before they repeat themselves.

Honestly, it sounds like a discipline problem.You cannot afford to have a month that destroys all your progress.What is the use of having great returns if you all lose them?Establish strict rules.If you reach your monthly loss limit, close everything and wait for the next month.Otherwise, you will continue to repeat the same cycle.

Thanks for the tips.I realize that I don't have a clear plan to handle losses.It seems that emotions guide me when things are not going well.I will work in a more structured plan and try it with a demo account first.If you have any suggestions to create a good loss management plan, you would be appreciated.

A basic rule is never to risk more than 1 % of your capital in a single operation.Thus, even in a bad streak, your account will be protected.You can also use a dynamic stop-to-protect to protect your profits once an operation is positive.This will help you consolidate the profits without leaving too much money on the table.