I'm trying to trade forex on my own, with 3 strategies based primarily on technical analysis, supplemented by fundamental analysis. I've developed these strategies through homework, lots of reading and just a bunch of research. I bought a system in the past and got burned. Now I'm doing it myself. Does anyone know the honest average range of pips professional retail traders make every month? My impression was that they make an average 250-500 pips a month. Not to say they do that every month, it's just the result when averaged out. Right now, after 2 months of trading, I've made a little over 200 pips and I'm hoping to maintain that and improve to the 250-500 pip average a month range. Is that realistic? Ideal? What should be my target monthly average to be a truly successful forex trader.

Answer
It is not wise to have a monthly pip target. If you fall behind your average it is easy to freak out during the last week of the month and make irrational decisions based on greed or fear. The easy way to target your trading is to set a daily pip target or what I like to call a Minimum Acceptable Target (MAP).

15 pips seems to be a conservative daily goal that if hit, will give you over 300 pips per month.

The definition of a "successful Forex trader" is in the eyes of the beholder. What is successful for one might not meet the expectations of another. Personally, I like having a target of increasing my investment portfolio by at least 8% per month.

Good luck with your strategies.

Paul

What are the pros/cons of trading one given class of financial assets as opposed to another?

Day trading or longer-term trading..
For stocks, commodity futures, FOREX, etc.
For instance, what are the benefits and disadvantages or trading stocks as opposed to oil futures?
Thanks a lot, I'm just curious as to why some people choose to only trade FOREX or only trade commodities when the underlying strategies and principles seem similar enough

Answer
There are many advantages to forex trading as compared to the stock market. However, beware that some of these advantages can be a double edged sword if you are not careful or donât have the knowledge to take proper advantage of them while at the same time guarding against losses.

1. Market Open 24 hours a day.
You can conduct business twenty-four hours a day with forex. Stock market traders on the other hand have a limited time when they can trade. This âperpetual open marketâ is very handy for people who are just starting out trading forex. Stocks force you to trade only when the stock markets are open, but with forex you can schedule your trading whenever it is convenient for you.

2. Margin = Leverage.
The ability to trade on margin gives forex traders significant leverage in their trading and offers the potential to make extraordinary profits with relatively small investments. For example, with a broker that allows margin of 100:1 you can purchase $100,000 in currency with only a $1,000 deposit. Of course, leverage goes both ways and can lead to large losses if you are not careful.

3. Liquidity and Trade Execution Time.
You are trading in cash when trading forex. Stock markets on the other hand require an active seller of a particular stock. Thereâs no investment more liquid than cash, so forex trades are executed near instantaneously. Thereâs no sitting around waiting for your trade to execute.

4. Market Not Easily Influenced by Individuals.
The foreign exchange market is so incredibly huge that no one individual, fund, bank, or government entity can influence it for long. This is the opposite of the stock market where one negative appraisal of a companyâs stock could send it into a tailspin.

5. Only a Few Major Currencies to Follow vs Thousands of Stocks.
There are only seven major currencies to follow when trading forex. Stock markets on the other hand have thousands of stocks available to trade not to mention new IPOs to evaluate on a regular basis. Following them all is all but impossible. With forex you can devote a lot more time to each of the seven major currencies. Some traders specialize in just 3 or 4 currencies and narrow their focus even further.

6. No Bear Markets.
you are trading to predict the direction of currencies either up or down with forex. Stocks on the other hand can experience long bear markets where seemingly everything is going down. Trading forex currency pairs is by definition an activity where you are predicting which currency will be going up and which one will be going down with every single trade. All you need to do to succeed is predict correctly, not always as easy as it sounds!