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Compounding or constant withdrawals ?? Which is better in forex ?

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  • Compounding or constant withdrawals ?? Which is better in forex ?

    I have been using signals for about 3-4 years now nearly ...
    I always had the debate of compounding vs monthly or quarterly withdrawals ...
    From my own experience compounding always ans always leads u to a zero in forex ...
    No matter how good is the trader ... sooner or later there is a big probablity things will go bad one day.. either by the trader blowing .. u going onto panic on big dd .. or holding on big dd till u blow ...
    I personaly love quarterly withdrawals ... at least till u gather ir inital invested capital ... then annual withdrawals will be ideal ... but hell to compouding ...
    Having a variety of 6-7 good traders in portifolio is better than having all eggs in the best trader in the world basket ... thats if u plan to make money in forex...
    If ur working with 7 traders and 1 month one of them blows 50 % of one of the 7 accounts .. u will end breakeven this month of other traders r ok ..
    Just my humble experience..
    I would appreciate sharing other opinions of everyone
    Thanks

  • #2
    It depends on how much you invest. If you have smaller amount than I would compound it untill it reaches bigger volume. Once you have big amount invested I would take monthly profit out. But it all depends also on how much is the max DD of each trader, so you can combine all of them and calculate your exposure...

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    • #3
      Originally posted by oportunis View Post
      It depends on how much you invest. If you have smaller amount than I would compound it untill it reaches bigger volume. Once you have big amount invested I would take monthly profit out. But it all depends also on how much is the max DD of each trader, so you can combine all of them and calculate your exposure...
      I might disagree with u here ...☺
      I think u should invest 50 % on 2 shots .... the second 1 should be after u make 40 % profit ...
      This way u r guarded by ur profits ... but yet never compund a small number to 5 folds .. i have never seen it happen with me on any signal .. several things like usd/chf crisis ... eur rate cuts and others get on the way and smash months ans sometimes years of sucess..
      And they will always happen ..m part of he game ..
      Take profits until u get ur capital .. this is my idea 😁😁

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      • #4
        oportunis, i totally agree,

        it depends on what you want and what you can afford to invest,

        if i had 25k now, i would remove profit monthly, as with that amount invested then the monthly gain seems worthwhile to pocket, whilst only ever leaving the starting capital in the account at risk, i lie, after writing this whole reaply and thinking more about it, i would remove around 70 of the monthly profit and leave the 30 to compound, win, win that way. also when account hits 100% then the standard max DD would be set to 50% to protect my investment, much like i have set up now, you just never know

        the current reason i compound my accounts since day one is i started with around 900 and are trying to get my account to a larger size as 10% of 900 wouldnt even cover the copy costs, (all in my cost are in the region of 180 ish, so i need 20% each and every month gained from the starting capital, that is not sustainable as shown last year.

        so i now have abount 6k invested (alot for me personally, but i trust the site and feel alot more wise so it seemed ok to increase my exposure on year two, whilst reducing risk at the same time,
        (im taking a big risk in reality, and doing something i DO NOT recommend other do,

        i cannot remember if i have mentioned this in my thread, but the extra 5k is not my money, its me using a credit card, then moving via balance transfers to 0% cards until 2017, so in effect ive borrowed without cost for two years, all the account has to do is say above the original investment, very risky i know, but consider im in 16k debt aside for house bills anyway, so at the time i thought what the hell, 16 to 21k isnt that bad im signed in to repayment for a few years anyway, and to be honest, all of us where hurting from CHF including Nicks business cash flow so the offter for a lower bracket on the VIP was just too good to miss, we both gain, and i still hold onto my non vip suscriptions as i honestly believe that the cost of doing this will pale in significance to the end goal)

        dont get me wrong, im glad i started with 900 as last year taught me alot of lessons about greed and trust, it would of been alot more stressful if it was more,


        as with all things in life, money makes money, if i had more i could risk less and gain more per month, sadly im not in that position so i have to try to compound my starting capital, this is exectly what im doing this year and the next, if the site still remains in 2017 at that point i will take monthly withdrawals,

        also bear in mind that profit is taxed for me i think 40% in the uk like my salary, so in order for me to withdraw it only makes sense if it is a considerable amount,

        for me personally, 600 a month extra after tax, so 1000 extra income a month total would change my quality of life drastically, it would pay off my loans and credit card debt not needed to use my work salary, and by doing that it would enable me to buy things for the house, renovate it quicker, as i plan on only keeping it 4 more years and useing it as a spring step to buying what i actually want

        //My view

        //Ben
        Last edited by dupapa; 05-12-2015, 10:43 PM.
        http://www.myfxbook.com/members/dupapa

        Comment


        • #5
          Excellent topic of discussion. Have to agree with Ben's plan above. Compound the account to a vip sized account then montly withdrawals. The chf mess really was a turning point for me and my view on forex as an investment. After this i feel more inclined to use it as extra income. Yes i will make less longer term but at least i will be able to close my eyes and sleep at night. Imagine spending 3 years watching your account grow and then get wiped. No thanks.....

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