Annual Returns: Setting Realistic Targets

Filed under: Learn Forex Trading |

Screen shot 2013-07-24 at 10.26.57I have just been looking through some forex trading forums, and gauging what kind of targets traders set themselves over the course of a year. By doing this, a couple of things have emerged. First, beginner traders tend to set high targets for their annual returns. This is usually somewhere between 50-100% returns. Some beginner traders even set a monthly target of 20% or more! However, the older, more experienced traders all seem to have more realistic targets. They talk of 20-30% annual returns as being a gauge of success, with 15% or over even being acceptable. Personally, my aim this year is a 20% rise on my capital, but I would be satisfied with 15%, and delighted with 25-30%.


It is interesting to note at this point, that Warren Buffet, one of the richest men in the world (actually currently the fourth richest with over fifty billion dollars in net worth), made his billions by average only a 21.5% return on his investments. Indeed, some of the best traders in the world only average 30-50% returns, and we are talking the best of the best here. So what on Earth makes beginners with absolutely no experience of trading and little knowledge, make them think that they can do better than these dedicated and great people – without seemingly trying? I suppose the answer is either enthusiasm, or ignorance – or a combination of both. However, if you are currently in this category, don’t feel bad, as I too had the same thoughts when I first began trading (and got off to a flier with 30% gains in a very short space of time).


I suppose the key is – if you set your targets too high, then you will likely be disappointed, but if you set them too low, then you may not work hard enough. All in all, I think that 20-30% is a good aim to go for, and while you may come up short, it will seem possible enough for you to get stuck in and keep trying.

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