What??? Where do you figure those numbers? Why is the risk 10%?
How much trading profit is enough to live on?
- Thread starter jinxu
- Start date
I understand how your trading, you already have money so you can trade differently to us.
ES not that I trade that we'd have an SL around 3pts so $150 thats not a year thats minutes.
Your trading slow and conservative cause you have money.
I agree although you never know if someone has money just because they come across a certain way or wrote a book.
10% is roughly the annual standard deviation of returns for the S&P 500 index. Standard risk measure.
GAT
I am glad that 80% of those voted are making above 5% per month which gives us a picture of what is possible in day trading. For options day trading it will be more than 10%.
I am glad that 80% of those voted are making above 5% per month which gives us a picture of what is possible in day trading. For options day trading it will be more than 10%.
This poll has zero value as evidence when put up against the mountain of hard empirical evidence that most retail traders lose money and day traders lose more than anyone else.
GAT
It's a common misconception that day traders are exposed to less risk than longer term traders. They take on less risk per trade, but put on more trades. These effects net out.
I trade slow partly out of choice, and partly because the effects of commission and spread make it very hard to make money trading faster. By bringing your holding period down to minutes your creating a huge headwind to overcome and still make money.
I trade conservatively, i.e. with less leverage, because otherwise I'd be exposed to a high risk of losing a large percentage of my capital. This has nothing to do with the absolute amount of money I have - it's a pure mathematical truth.
It's true that for me to make $18,000 a year (on average) and for the OP to make $18,000 a year would require the OP to take on much more leverage than I do. But that doesn't mean the OP should try and make that kind of money.
You should never target return as a certain amount of $, but always target risk at a prudent and appropriate level.
GAT
It is simple logic that when there is lot of opportunity to lose then that is same with gaining, right ?
Let us say it is easy to lose 50% of your investment in day trading in one month then obviously there is quite an easy opportunity to earn 5% if not 50%.
Makes sense, right?
I call this logic as commonsense which is beyond knowledge.
Trying to swim with bicycling skill will be hard.
Trading is predominantly psychological skill. Analytical skill is just a secondary skill in trading.
Those who experience less than 5% ROI per month in day trading most probably are trying to trade (swim) with analytical (bicycling) skill.
What i sense is majority of authors and consultants are predominantly analytical.
Why the obvious things are not so obvious?
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There is no ending point! Whatever, traders need to understand their trading capability! In addition, I don’t expect here any unrealistic profit! I started my live trading with 10% and now it’s around 15%, of course I’m happy on my own trading performance!
How do you start with 10%?