Is there a limit to how much money you can make trading currencies (Forex) ?
December 1st, 2009 | by admin |
Manny C asked:
Well, let’s say you have a scalping strategy that can make you 25% per day. I know it’s high but lets say you did. If you start with $2,000, the next day you should have $2,500. The next day $3125 ..
Right? Well lets say you implement the same strategy with $5,000,000, you should be making $1,250,000 that ONE day.
Well back to my original question, is there a point where you cant make that much per day because of the size on the orders, where there wont be no one on the other side to fill your bid/ask because of it’s quantity? I hear that Forex is supposed to be the most liquid market of all.
Well, let’s say you have a scalping strategy that can make you 25% per day. I know it’s high but lets say you did. If you start with $2,000, the next day you should have $2,500. The next day $3125 ..
Right? Well lets say you implement the same strategy with $5,000,000, you should be making $1,250,000 that ONE day.
Well back to my original question, is there a point where you cant make that much per day because of the size on the orders, where there wont be no one on the other side to fill your bid/ask because of it’s quantity? I hear that Forex is supposed to be the most liquid market of all.
I know that it is extremely difficult to profit 25% per day, but hypothetically speaking.
Thanks.
Temple
4 Responses to “Is there a limit to how much money you can make trading currencies (Forex) ?”
By Mark B on Dec 3, 2009 | Reply
Reyna
There is no limit on how much you can make. You could make a million percent a day if you could find how. However, the chances of making 25% a day for any reasonable time is a billion to 1.
Mark
By Kevin R on Dec 6, 2009 | Reply
Edwin
Your only limit would be all of it. That’s called cornering a market. The entire capitalization of America can’t take the rest of the world, so it’s safe for you to try. At some point the currency fluctuation would be ruled illegal, or worse they devalue your long positions. Ouch!
By Mark B on Dec 6, 2009 | Reply
Coreen
Kevin R is correct. The sky is the limit. An example. George Soros in 1993 made $9 billion dollars with a trade against the English pound. The largest single currency trade made to date. He was told to stop by the English Treasury, he actually broke the bank of England.
The toughest part of currency trading is knowing when to stop, greed can make you loose everything very easily. The trick would be to try and make you 25% per week to start, then build your account from there.
With you system you would start with $2000 and have over $2 Quintilliard in only 250 trading days. 25% per day increase.($2,000,000,000,000,000,000,000,000,000) Thats alot of zeros.
By rexx0046 on Dec 8, 2009 | Reply
Carie
i hope i am interpreting your question correctly but i think the others answering have not.
if you have a theoretical scalping strategy worth 25% a day, it will not work with the higher quantities because it becomes much harder to execute a large order all at the same price and before the event occurs that will lead to the profit. it just becomes harder and harder to execute your orders precisely enough for the strategy to work which is why scalpers can do very well but they cannot be really big players. where this happens depends on your strategy.
there is however no upper limit on how much you can make you just have to find the strategy and have sufficient funds to execute it properly. i hope this is clear.