Initially, I would like to tell you about the high expectations of a beginner regarding the desired profitability of his trade, which is a common forex mistake.
It is clear that everyone wants to earn as much as possible, but you should have an understanding of the average% that other traders earn and, more importantly, from what amount of the deposit they receive this or that profit.
Desired profit growth in% for a professional forex trader and a beginner
So on average 3-5% increase in the account is considered a normal return, 10% is considered a large monthly return. But here it is important to understand that a successful trader is likely to attract capital for management, and, say, with a return of 5% and a capital of $ 2 million, this will be a profit of $ 100,000, which will be quite a significant amount.
In turn, a good return in Western hedge funds is considered to be an average annual increase in book value of 20-30%. Of course, you should understand that hedge funds diversify the sources of profitability and currency trading can be only a small part of the transactions in which speculative transactions take place.
At the same time, a beginner does not operate with a yield in%, but operates with a yield in $, and at the same time tries to earn $ 500 a month from $ 100, and preferably $ 1000 or more, which is a common mistake in trading.
Moreover, if we translate this profitability in%, then we get the desire of a novice trader to earn 900% (900% = an increase from $ 100 to $ 1000).
It seems that this is clear and simple, but believe my experience, I talked with 1000 novice traders, and also from my own experience I remember that this is exactly the case.
An average beginner’s Forex deposit is $ 100 – $ 500. And it is from this amount that they want to earn so much that they have enough to live on, about $ 2,000, but even if we take the extreme level of $ 500, then the trader wants to receive a monthly return of $ 2,000, this will be 300%, and on an annualized basis 12 * 300 = 3600%, and these are not fictitious numbers, this is a real desire, vision and mistakes of a beginner forex trader.
What profitability should a beginner focus on and which path to choose in the absence of a lot of capital to avoid forex mistakes
- About profitability
The yield benchmarks for a novice trader should be 3-5% monthly growth with a controlled drawdown with diversification for traded instruments and strategies. This is your guide.
But initially, I strongly recommend that all newbies focus not on the return that you plan to receive, but on how you will control the risks.
Of course, you can get a much higher return of 5% per month, but at the same time you must have an answer to the question of what the ultimate risk for your account is such a strategy. If the risk for such a strategy is 100% (your entire deposit), and you are chasing a return of 50%, then you are obviously in the negative zone.
- The path for a trader in the absence of a lot of capital
Based on the realities for most traders who do not have a lot of personal capital to get significant monetary profit, you need to first of all focus on honing your trading technique.
Try to build a portfolio of trading robots, learn how to trade profitably using manual trading, which will give you an overall understanding of the market.
After you already understand that you can consistently make money on the market, you can open a trading account for a small amount and after several months of successful trading with clear risk control, your task is to set online monitoring on one of the monitoring services and believe me, investors themselves you will be found.
The most popular options for finding investors:
- Pamm accounts / Ramm (directly from the broker)
- Copy services MQL5 / fxautotrade / ZuluTrade and many others
Remember there are no problems with money in the market (private investors are ready to invest thousands) in the market there is a problem with consistently profitable traders, who at the same time understand how they control risks and avoid forex mistakes.
If you have any questions, write comments. Let’s continue the discussion of this topic already there.
I wish you profitable trading and a lot of capital for management!
