In order to figure what you should be earning you really should think in terms of what you are routinely risking. I have trained hundreds of traders and this is a very common question as most intelligent people want to know what they can expect to get out of something as demanding as trading. Here are some facts to take into consideration:
1. 90% of all traders fail to make a living off trading.
2. Most consider the risk they take to calculate possible rewards.
3. A daily goal is difficult to work with because the question arises as to how to go about achieving it, do you stop when you reach it for the day, if you have a couple of great days do you stop for the week or what.
4. You need to know what kind of trader you are to determine the kinds of rewards that justify what you are doing.
5. Consider leverage and capital used to determine rewards as opposed to leverage and capital available. In other words if you have a 50k account and 200k buying power are you using it all or only partial, what type of position sizes do you use, what size stops do you use.
6. Most successful traders I know, over the long haul, average returns of about 7-10% of account size per month.
7. Consider your commission cost as it will eat into your profits quite a bit depending on what kind of trader you are.
8. I have traded for a living since 1997 and it has derived 75% of my income over that time period. My monthly return over that time period is near 10% when averaged out between up periods and down. Considering I made very little trading in 2001 as changed from stocks to futures.
Anyway here is my advice after saying all this. Make some calculations that are personal to you in order to come up with what you should be making.
What risk per trade do you take?
What is your average gain on winners?
How many trades a week?
What are position sizes do you use?
What is your win rate on trades taken?
When you ask yourself these questions you will start to see what kind of returns you should be getting based on the kind of trader YOU are. Other traders may be making less or more based on style of trading and risk comfort. Develop your style, quantify it, the money is just the way we ( traders ) keep score.
AllenZ
1. 90% of all traders fail to make a living off trading.
2. Most consider the risk they take to calculate possible rewards.
3. A daily goal is difficult to work with because the question arises as to how to go about achieving it, do you stop when you reach it for the day, if you have a couple of great days do you stop for the week or what.
4. You need to know what kind of trader you are to determine the kinds of rewards that justify what you are doing.
5. Consider leverage and capital used to determine rewards as opposed to leverage and capital available. In other words if you have a 50k account and 200k buying power are you using it all or only partial, what type of position sizes do you use, what size stops do you use.
6. Most successful traders I know, over the long haul, average returns of about 7-10% of account size per month.
7. Consider your commission cost as it will eat into your profits quite a bit depending on what kind of trader you are.
8. I have traded for a living since 1997 and it has derived 75% of my income over that time period. My monthly return over that time period is near 10% when averaged out between up periods and down. Considering I made very little trading in 2001 as changed from stocks to futures.
Anyway here is my advice after saying all this. Make some calculations that are personal to you in order to come up with what you should be making.
What risk per trade do you take?
What is your average gain on winners?
How many trades a week?
What are position sizes do you use?
What is your win rate on trades taken?
When you ask yourself these questions you will start to see what kind of returns you should be getting based on the kind of trader YOU are. Other traders may be making less or more based on style of trading and risk comfort. Develop your style, quantify it, the money is just the way we ( traders ) keep score.
AllenZ
