Advice on how to make 5%/month on $1 million
- Thread starter blaze1635
- Start date
You guys did not understand OP well.
1. What he ask is really a 80% annual profit. 1.05^12=1.795
Whether or not he withdraw every month it is no different because both need same level of skill.
2. He ask for every month 5%, not average 5% per month. So you can't have a bad month. Every month must be good.Holding stocks or ETF doesn't make it because they all have bad month.
3. He wants low risk. Someone recommend selling naked put, which is high risk.
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Thank you all for your replies.
Given the parameters I have laid out, consensus is that it's probably not going to happen. I appreciate your honesty.
A few thoughts/comments:
- Jim Simons chooses to manage "billions" of $$$; achieving super-high returns on this level of assets consistently is probably impossible; I don't want to manage billions; just 1 million
- for out of the way, illiquid markets - e.g. Korea; I like the idea, but would entail "a lot" of trading since big trades would have an impact on those stocks
- futures on indices; yeah, I was thinking a big liquid market might be able to support this level of trading without raising too much attention; was also thinking about forex
- to the person doing the "math"; thanks; yes, I agree; see below for more
What about the following:
- let's say I am going to win on half the trades; and lose on half the trades
- let's say when I win, I win 50% more than what I lose when I lose
- to make 5% ($50k), I would need to "win" $150k/month, and lose $100k/month
- if I am looking at 50 trades/month, this means my winners on average would need to be $3k of profit
- so what kind of trades should I put down?
- could do $100k, with a stop at $98k, and a sell at $103k; looking for 3% up here
- could do $200k, with a stop at $198k, and a sell at 203k; looking for 1.5% up here
I guess when I look at the math, and read about all the people making 10 or 20%/month on their $25k, it seems that making 5% is not so far-fetched. Or is the reality that no one is making 10% month day-trading, any amount...
Thanks again.
Given the parameters I have laid out, consensus is that it's probably not going to happen. I appreciate your honesty.
A few thoughts/comments:
- Jim Simons chooses to manage "billions" of $$$; achieving super-high returns on this level of assets consistently is probably impossible; I don't want to manage billions; just 1 million
- for out of the way, illiquid markets - e.g. Korea; I like the idea, but would entail "a lot" of trading since big trades would have an impact on those stocks
- futures on indices; yeah, I was thinking a big liquid market might be able to support this level of trading without raising too much attention; was also thinking about forex
- to the person doing the "math"; thanks; yes, I agree; see below for more
What about the following:
- let's say I am going to win on half the trades; and lose on half the trades
- let's say when I win, I win 50% more than what I lose when I lose
- to make 5% ($50k), I would need to "win" $150k/month, and lose $100k/month
- if I am looking at 50 trades/month, this means my winners on average would need to be $3k of profit
- so what kind of trades should I put down?
- could do $100k, with a stop at $98k, and a sell at $103k; looking for 3% up here
- could do $200k, with a stop at $198k, and a sell at 203k; looking for 1.5% up here
I guess when I look at the math, and read about all the people making 10 or 20%/month on their $25k, it seems that making 5% is not so far-fetched. Or is the reality that no one is making 10% month day-trading, any amount...
Thanks again.
Get the idea of "day-trading" out of your head. That will clear up your thinking.
I can make much higher than 10% per month, but you can't limit the number of trades. Also I can't disclose what is my method. But I can tell I trade Index futures and forex, which are high liquid.
The reality is that no-one is consistently making 10% per month, month after month, with no drawdowns, for any great length of time. If you have 1000 monkeys throw darts at the stock pages you'll end up with a handful who have a run of 3 or 6 or 12 months of good returns. And those are the one's who will show up here bragging about it. And then they quietly go dark....that's when they hit the inevitable drawdown and realize they confused luck with skill. Plus I've noticed that gamblers and punters tend to just plain lie about their returns, they seem to get their own self-worth wrapped into this personal they've built up to the point they can't admit, maybe even to themselves, that they're not as good as they've been saying they are.
Let's be clear, the best professional money managers in the world don't make 5% per month returns on a consistent basis. That's a massive amount of alpha. If you consistently make 1% per month with no drawdowns you're in the top percentiles of the best out there.
Just because you have the capital doesn’t mean you can extract same profits every month. Some make most of the profits in a few good days a year and grind the rest(normal year, not 2020). Also, they are taking on leverage and more risk than what you asked for.
Good points. Based on the responses, I should probably add the following:
- $50k/month would be on average; doesn't need to be $50k every month
- the $1mm number can fluctuate; so if I had a big run of losers, then yes the value would go down, but ideally still making the $600k/year
I realize that wouldn't change most of the comments/observations that have been posted.
- $50k/month would be on average; doesn't need to be $50k every month
- the $1mm number can fluctuate; so if I had a big run of losers, then yes the value would go down, but ideally still making the $600k/year
I realize that wouldn't change most of the comments/observations that have been posted.