How Realistic? $50k account, $500 / day
- Thread starter AFChao
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âThe successful small stock trader (a retail stock trader with a stock trading capital of no more than a few hundred thousand dollars) may make about +50% yearly net performance on the long run, after 4-5 years experience and spending at least 20 hours a week on his indie stock trading/investing âsmall businessâ⦠for even after over 5 years of stock trading experience, working 30 hours a week, I barely meet my +5% monthly performance target in my active months, excluding the bear markets. I say âexcludingâ the bear markets, because while shorting the bear market sounds easy in theory, in practice it is not an easy thing, even for some great stock traders with decades of experience. So, during the bear markets your first goal should be to protect your stock trading capital⦠Many studies claim that about 90 percent of the small stock traders eventually lose money and leave the stock market within their first year. Thus, only 1 out of 10 small stock traders survives to earn a consistent living in stock trading. The most important thing to remember is that the same winner often takes the gold year after year. This proves that stock trading is a skills game, one in which luck plays a small role⦠It is indeed rare for a small stock trader to consistently make over 5% a month, even if they work 70 hours a week. If you consistently make 100% annually, perhaps you will be one of the best stock traders in the world- and one like none I have ever heard of, though I have heard of a few derivatives traders who consistently make around 100% per annum. However, in the derivative market, the leverage can sometimes be 1:10, while in stock trading, the leverage for swing trading may be around 1:2.5.â
So, it is wise to be realistic and do not waste your little time, money, and skill/abilities on books/websites/newsletters/âgurusâ that promise doubling/tripling your stock trading capital each year, for even the few great stock traders such as Jesse Livermore, Bernard Baruch, Gerald Loeb, Nicolas Darvas, William OâNeil, and Steve Cohen had an average annual return of +35-40 percent in the long run. However, generally speeking the larger your stock trading capital, the less your performance, as a small stock trader is more flexible, focused and simple than a big stock trader. Even Warren Buffet once admitted that he could make +50% each year on small caps if he had to manage a small stock investing capital.
So, it is wise to be realistic and do not waste your little time, money, and skill/abilities on books/websites/newsletters/âgurusâ that promise doubling/tripling your stock trading capital each year, for even the few great stock traders such as Jesse Livermore, Bernard Baruch, Gerald Loeb, Nicolas Darvas, William OâNeil, and Steve Cohen had an average annual return of +35-40 percent in the long run. However, generally speeking the larger your stock trading capital, the less your performance, as a small stock trader is more flexible, focused and simple than a big stock trader. Even Warren Buffet once admitted that he could make +50% each year on small caps if he had to manage a small stock investing capital.
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You just have to know how to play;Play what the market throws at you ,like counter spikes, trend breakdowns,uncertainty , stop hunting random walks and illusions ,breakdown in support or resistance ,This is really what happens in day trading , and you have to learn how to beat it under duress.
I am releasing my ego and tuning to the market.
The 90/10 rule , success comes from reacting correctly to the market.10 % of trading is beyond us , 90 % is how you react to the market volatility.
What does it mean ?
10 % , we have no control of what the market does to us , hits our stops ,shows false signals ,random illusions and reversals.
Do not let the market fool you , and take your money with deceitful volatility.You have no control over what has just happened.
You can control how you react to the market.
The market has showed false signals and taken out your stops , and now you are losing money.
You add a position , thinking :it was just a false move and the piano is playing the market's way , not yours.It goes goes even lower or higher knocking your second stop , now we have two losers and bad reaction.
Let us reverse the direction :we must be wrong , so we reverse , our reaction of stupidity .Now the market reverse to our opposite , cause the market was wrong , and goes past our first entry.NOW WE LOST EVEN MORE.
90 % is how we react to the market .
The correct way is to do what the winning side is doing , and playing to the notes of the market and with the market.After first stop is hit , the ideal price action trade is to reverse and change stance.
Quote from sheda:
Ah! The billionaire of Elite|Trader has spoken ~ Every body listen to this man he was good enough to score 50 pips a day and solve the liquidity issues ~ Now he is top of the pack which is what gives him the authority to throw his weight around here as well as make his advice worth listening to
I am just curious, is OilFx real name Larry, Curly or Mo?One day he starts a thread saying daytrading is for losers, the next day he is a master at daytrading :eek:
at any rate, getting back to opies original question, is it possible to average 1% a day, or 20% a month, or to put it in the limited vocabulary of prop traders $500 a day?
Yes, many of us have done it (and even quite a bit more) when market conditions are favorable to our particular style of trading.
Doing it over and over again on increasing account size is as far as I know unheard of.
And like I said, those that do it consistently realize the ultimate risk of ruin is always just one trade away and therefore sweep to protect the profits they were lucky enough to accumulate, so unlimited compounding is absurd.
Most of us have taken our trading profits and invested them conservatively. In the 90's we hoped for 7% and got 10% and doubled our money in 7 years.
Now with rates where they are 6% is more realistic.
But you can bump that with a good aggressive trading program.
And for me in my old age, that is what trading is all about.
My days of making a living from it are over.
You can make a very good living trading if you have the foresight to quit while you are ahead. I didn't have that foresight, it just happened by luck.
Yes, many of us have done it (and even quite a bit more) when market conditions are favorable to our particular style of trading.
Doing it over and over again on increasing account size is as far as I know unheard of.
And like I said, those that do it consistently realize the ultimate risk of ruin is always just one trade away and therefore sweep to protect the profits they were lucky enough to accumulate, so unlimited compounding is absurd.
Most of us have taken our trading profits and invested them conservatively. In the 90's we hoped for 7% and got 10% and doubled our money in 7 years.
Now with rates where they are 6% is more realistic.
But you can bump that with a good aggressive trading program.
And for me in my old age, that is what trading is all about.
My days of making a living from it are over.
You can make a very good living trading if you have the foresight to quit while you are ahead. I didn't have that foresight, it just happened by luck.
You dont have to quit while your ahead you just have to maintaine dicipline and do not get greedy.