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3 Comments

  1. Paul-Reply
    June 14, 2016 at 8:36 am

    Good morning Charlie,

    I just wanted to ask you a question related to expectations. I’ve been watching your videos for a while, and also the 10k to 100k event. But what troubles me is what kind of returns could be really achieved, I mean. I’ve been checking the Hedge Funds returns in the past year, o several years before, and they ussually are down, a bit, or making a profit but 10-20%, not more, and the best of them.

    So the question is,how is it possible that Hedge Funds get those “tiny” returns compared to yours? I mean, if they see you, they will be looking forward to have you, because you’ll be making them absolutely rich compared with what they do!

    Another question is, that Hedge Funds ussually run portfolios, I dont know which time horizon, and dont ussually daytrade. Do you think that daytrading gives better results? And that’s why they struggle? What about swingtrading? Is it more like running a portfolio? I am confused, because studying the normal distribution of returns of any currency over the past 10 years, the ussually go up 0.5%, or down 0.5%, thats almost nothing! How is it possible to make money daytrading there?

    Thank you very much for your answers, they really help

    Kind Regards

    Paul

    • Charlie Burton-Reply
      June 14, 2016 at 5:00 pm

      Hi Paul,

      Yes that’s a common question from newer traders and not surprisingly so. The reason individual traders can make so much more than fund managers is down to size. We can take our trades and buy and sell with no issues at all. Big funds can hop in and out of the markets like we can or they move the markets. For that reason, they don’t have the flexibility that we have and therefore can’t make the kind of percentage returns we can.

      Day traders make money because they can use leverage. So in percentage terms a currency pair may not move a lot in a any particular day but with leverage, traders can capitalise on these small moves easily and still controlling their risk to say 1% per trade.

      Hope that helps

      Charlie

      • Paul-Reply
        June 15, 2016 at 1:42 pm

        Hi Charlie,

        thank you very much for your answer, that really helps. I also have been reading something about, because of this statistsical odds so to speak, that professional traders, ussually are 80% of the time Portfolio Managers, and only 20% of the time daytrade. Is it true? I mean, apparently, taking the statistics into an account, is natural to be so, but then I watch your videos, and I dont really know what to think.

        Then I just came with a though that, if our “aim” as traders so to speak, is to capture volatilty, in order to make money. Why to trade the majors? The minors for example, have double volatility in a daily basis, so, wouldnt it be better, instead of really leveraging what in fact is not real? Or at least, are very small movements, being sometimes days that majors in general almost dont move!

        I dont know, sorry if this are very stupid questions, but I’m a little bit lost right know, and I don’t know how to find the way. I really like the idea of trading, and trading for a living, of course! But I dont really know what is really achievable and what not, what’s conflict of interest and illusion, and what is real, and of course, if trading for a living, I mean day trading, swingtrading or whatever, is really achievable for ordinary people, or it’s necessary to have so much information, or so much money that not everybody really can.

        Sorry about the long message Charlie, I really appreciate your answers, they really help.

        Thanks again

        Kind Regards

        Paul

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