My solution was to the vague question of how to make $3000 a month. If your comment is that $3000 a month is not good because in 10 years prices go higher and you will need more money, then thank you for the detailed lesson on inflation. Also what dumb ass people you know invested $2,400,000 to make $3000 a month?
Advice to make $3K/month trading
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My solution was to the vague question of how to make $3000 a month. If your comment is that $3000 a month is not good because in 10 years prices go higher and you will need more money, then thank you for the detailed lesson on inflation. Also what dumb ass people you know invested $2,400,000 to make $3000 a month?
Is that even possible to achieve consistently year in year out over a long time frame?
It is like a CAGR of 80%. I have not read about or came across any great traders achieving that type of return over multiple years?
Anyway, good comments for us newbies to follow. By the way have you found someone of that caliber here on ET?
Regards,
As a non professional, small mom and pop retail trader, here are my comments:
1. As a beginner, you want to play not to lose, so an initial target is to match the returns of indices that you trade (assume you trade indices of the stocks of your country). For me, my goal has always been to beat the US S&P500 bench mark. For otherwise why trade? The SP500 returned ~10% a year, so to get $3K per month I need ~$2.5 millions, not unlike another poster's number.
2. If you are skilled like Xela, you only need $60K to achieve that level of income.
3. I started out trading indices but found them too crowded with professional, so I ended up trading individual stocks.
4. I could not make money day trading so I switched over to swing trade, and switched over to swing trade options since 2013. I am still a novice and a newbie if you care to know.
Good luck.
I think it is, yes ... for a very small minority of "retail"/"independent" traders.
The problem with stating ("casually"!) in a forum that it's possible and achievable is, of course, that in conjunction with an "industry" full of scammy income-claims and widespread highly unreasonable expectations among aspiring traders, one's kind of potentially adding one's voice to those creating the unreasonable expectations. I hope I didn't come across that way, anyway. I try not to.
I always stress that this is achievable by a tiny minority of participants after some years of education and thousands of hours of practice.
My own opinion is that daytrading and trading spot forex with high leverage are among the things beginners should generally avoid, as the realities of the market and industry predicate that (for reasons they typically have inadequate experience to appreciate) these are both very likely to turn out to be ways of stacking even further against themselves a deck which is already replete with pitfalls and traps for the unwary.
But it is possible, yes - admittedly I started off (by chance) with what turned out to be some advantages which very few beginning traders have, but I eventually managed it, and I'm certainly not the only one.
However much one uses phrases like "eventually", and "after struggling for years", and "after prolonged education and thousands of hours of screen-time practice" and "with a semi-professional understanding of statistics and probability" and all the rest of those expressions one dredges up for such occasions, in an attempt to sound guarded and cautious, the reality is that there will always be some people who choose to gloss over them, partly because they're actually attracted by and interested in only the outcome and not the process.
I strongly suspect that stories like your own (of not having managed it by daytrading, having switched to something else that suits you better, and regarding yourself as "still a novice" after several years) are really very common ... among the minority who persist.
Also, the more I participate in such conversations, the more I believe that people who eventually become successful traders were (at least) quite likely to have become successful whatever else they might have chosen to do instead. I can't prove this at all, naturally: it's just a personal belief but one that's gradually strengthening over the years.
those who posted it maybe? on ET nothing suprises me. here everything is possible.
if you made $2,400,000 you in general don't need to make 3K anymore. you can spent 800 months in a row 3K from the capital.
I just realized my calculation was off by a factor of ~10. If you matched the SP500, returns of ~10% per year, you only needed $360,000 of starting capital to make $3K a month.
My bad.
so your problem becomes 10 times smaller too... might be the difference between a dream and something achievable.
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Hi Adam,
no, in my scalping I have never worked with stops that are tighter than my targets. At least not since I became profitable. Quite the opposite, for a long time I have scalped without any stop per trade. Instead, I had set a daily max loss, and once this has been hit, I would stop trading for that day.
I see scalping a little bit like the work of an insurance company: you collect many small, regular insurance premiums from the policy holders. And once in a while, the insured event will happen (max loss day) and you will have to pay a big amount to the policy holder. The key to long term profit is the same for an insurance company as it is for me as a scalper: the many small, consistent wins must in sum have to be more than the few, occasional heavy losses.
Trading is a game of numers, statistics and experience. Nothing is written in stone. You can change parameters as you wish and adapt a style so that you feel good and comfortable with it. I know that many here do not feel good to place trades without stops, thats why I wrote: control your losses, keep a tight stop. But it is not a must. Both with a tight stop per trade and also without per trade stops and just a max loss limit per day you can make consistent gains in a volatile market like FDAX or NQ.
With the daily max loss your trade results will look somewhat like this (in ticks), for example over 2 days (this is if you are good, and have experience with your market. There is no free lunch or magic setup):
+2, +1, +3, +1, +2, +4, +1, +2, +2, +1, -20, +3, +1, +2, +1, +5 = 11 ticks total
If you apply a tighter stop per trade (lets say 5 ticks) instead of the daily 20 tick max loss, your results might look something like this:
+1, +3, +2, +1, +2, -5, +3, +1, +1, +2, +2, +1, -5, +3, -5, +2, +1, +2 =12 ticks total
So both types of risk management can work, it depends what fits your taste and your general style of trading and your setups better.
Hope this helps a bit
Greetings,
CALLumbus
no, in my scalping I have never worked with stops that are tighter than my targets. At least not since I became profitable. Quite the opposite, for a long time I have scalped without any stop per trade. Instead, I had set a daily max loss, and once this has been hit, I would stop trading for that day.
I see scalping a little bit like the work of an insurance company: you collect many small, regular insurance premiums from the policy holders. And once in a while, the insured event will happen (max loss day) and you will have to pay a big amount to the policy holder. The key to long term profit is the same for an insurance company as it is for me as a scalper: the many small, consistent wins must in sum have to be more than the few, occasional heavy losses.
Trading is a game of numers, statistics and experience. Nothing is written in stone. You can change parameters as you wish and adapt a style so that you feel good and comfortable with it. I know that many here do not feel good to place trades without stops, thats why I wrote: control your losses, keep a tight stop. But it is not a must. Both with a tight stop per trade and also without per trade stops and just a max loss limit per day you can make consistent gains in a volatile market like FDAX or NQ.
With the daily max loss your trade results will look somewhat like this (in ticks), for example over 2 days (this is if you are good, and have experience with your market. There is no free lunch or magic setup):
+2, +1, +3, +1, +2, +4, +1, +2, +2, +1, -20, +3, +1, +2, +1, +5 = 11 ticks total
If you apply a tighter stop per trade (lets say 5 ticks) instead of the daily 20 tick max loss, your results might look something like this:
+1, +3, +2, +1, +2, -5, +3, +1, +1, +2, +2, +1, -5, +3, -5, +2, +1, +2 =12 ticks total
So both types of risk management can work, it depends what fits your taste and your general style of trading and your setups better.
Hope this helps a bit
Greetings,
CALLumbus