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Making $200-$400 a day (average), realistic goal for a new trader to grow into?
- Thread starter bryan942
- Start date
$400 a day is about 88K a year trading.
That is not remotely realistic for most people until after they have put about 5 years of hard hard hard work and study into trading.
$200 is not realistic for most people.
Here is something realistic. DONT LOSE MONEY IN ONE YEAR.
If you can not lose money in your first year, your are doing way better than most people who are just starting to trade, and are stupid enough to start trading money immediately.
That is not remotely realistic for most people until after they have put about 5 years of hard hard hard work and study into trading.
$200 is not realistic for most people.
Here is something realistic. DONT LOSE MONEY IN ONE YEAR.
If you can not lose money in your first year, your are doing way better than most people who are just starting to trade, and are stupid enough to start trading money immediately.
Quote from Szeven:
If everyone took the advise that the markets were too hard and the failure rate was too high there would be no successful independant traders. That being said, to me, the decision to get into trading is much like the decision to take a trade itself. If you weigh the risks and benefits of getting into trading, and the impact it will have on your existing business and the rest of your life, it may be worth the risk, or it may not be. Regardless the passion to trade can be a strong one, and you might regret never trying even if you do decide its not worth the risk... tough decision!
As a former business owner, trying to put in the time to learn trading and run a business will only multiply the difficulty.
This is a huge mistake for this person. He is not looking to become a trader, he is looking for a source of exta $$$. The odds are greatly he will find this true:
If you are looking to make a small fortune in the futures market, start with a large fortune."
YES, you CAN do it!!!!...Go for it!!!...just study, study, study!!!...you can make it!!!
bryan
you've gotta remember three basic things when you trade: know your entry price, exit price, and stop loss price. get to know about options trading as well so you can protect and hedge in case a trade goes against you. also, learn money management, the most important item in your trading plan. money management, money management, money management.
stockteacher.com has educational materials for around $250, both downloadable books on the internet. that's pretty much all you need really when you daytrade or swing trade. then study up on your money management skills from another trading source like pristine.com or whatever.....i don't work for any of these sites, i have used them and they know what they are talking about.
besides using that xtrader simulator mentioned, you can use the cboe.com virtual trading as well.
anyway, good luck bryan.
you've gotta remember three basic things when you trade: know your entry price, exit price, and stop loss price. get to know about options trading as well so you can protect and hedge in case a trade goes against you. also, learn money management, the most important item in your trading plan. money management, money management, money management.
stockteacher.com has educational materials for around $250, both downloadable books on the internet. that's pretty much all you need really when you daytrade or swing trade. then study up on your money management skills from another trading source like pristine.com or whatever.....i don't work for any of these sites, i have used them and they know what they are talking about.
besides using that xtrader simulator mentioned, you can use the cboe.com virtual trading as well.
anyway, good luck bryan.
Quote from makloda:
To answer the question in the title: Yes, of course it's realistic, depending on a) your experience b) your capital. One major point you didn't address in your post is your capitalization.
Some food for thought
a) I always get a shiver down the spine when I hear the question "I need $X000 a month, can I make that with trading". Yes, you can technically make any amount imaginable trading, the question is what risk are you taking on to achieve your goals (what % of your capital are you risking every day)? And what are you doing when you hit the inevitable dry spell of a drawdown (loss of capital for an extended period of time). A drawdown means weeks or even months of no income and an actual reduction of your trading capital. You have to be financially and emotionally prepared for that point, because sooner or later it will happen.
b) By all means, keep running your business. I'd suggest trading stocks "swing style" long/short (holding each position anywhere between a few days to a few weeks) for now, i.e. establishing positions e.g. in the first/last hour of a day, putting in stop loss orders on each open positions and then review all your positions each night. Thus you spend maybe 2-4 hours every day and can still run your company in the day time. Use the weekend for doing your homework and educating yourself as much as possible.
c) Here's something to ponder on: $400 a day = $8k a month = ~$100k a year.
The very best traders make anywhere between 15-35% a year on their capital (without leverage) year in year out, over a complete market cycle. A good drawdown here would be 10-20%. 10% DD and 35% annually would be absolutely fantastic and probably only the top 0.2% of traders worldwide achieve such numbers, again, annualized over 5-10 years. (Please ignore the people telling you about returns of 500% year etc., it's all bogus. Of course, it can happen just like people come to Vegas with $10 and go home with millions, it's just not feasible to be replicated year after year)
If you want to make $100k a year consistently (year after year after year, rather than making $100k one year and making $22k the next) working from home, without big leverage and without taking out of this world risks then I would say you'd need anywhere between $250k-$500k in capital. I can't wait for people to flame me on this but that's how it is, I am sorry to spell out the facts.
d) Don't waste too much time going from stocks to futures to forex to options and back and forth again. One market is not better than the other looking at risk/reward characteristics, however, they all have their own feel to them and it takes time getting used to them individually. If you jump between markets a lot you will waste a lot of time getting used to each before you know what you're doing.
e) My approach would be: If you have experience with stocks, stick with them. There are something like 8000/9000 stocks listed. There are always some going up and going down. If you indeed are interested in swing trading stocks, buy this book (http://www.amazon.com/How-Make-Money-Stocks-Winning/dp/0071373616/ref=ed_oe_p/002-4887096-0505651) and read it. Not just once, but once every 3 months or so. You will always find new things to learn.
f) Have realistic expectations: A transition from your brick and mortar business to full time professional trader will likely take anywhere between 12-24 months, maybe even longer. In between, you will go through phase of frustration and self-doubt. It's part of the game, don't get discouraged.
Keep risk low, be opportunistic, cut losers fast and don't give back all your profits on winners. Good luck.
Thats good honest advise, I hope everyone heeds this advise.
Quote from Cy_M:
At most you have a 5% chance of success(if that), now, is it worth it? You decide!
where do you get these numbers from? The same goes for makloda's guesses - despite very good post/advice.
I am hearing these statistics day in day out - is there any scientifically unbiased research on how many people really make it? What does "make it" mean?
People like to repeat what they've heard around the corner like parrots until everybody believes that....
Go back and read Steve0617's posts in the earlier portions of this thread. Obviously the guy has learned the hard way, as have most successful traders, myself included.
I personally would advise a new trader NOT to focus so much on the dollar goals/outcome, but to focus on having the mental fortitude to take each and every one of your setups that presents itself and follow your rules like a robot. Very easy to do when the last several were winners, extremely difficult to do when the last several were losers.
I personally would advise a new trader NOT to focus so much on the dollar goals/outcome, but to focus on having the mental fortitude to take each and every one of your setups that presents itself and follow your rules like a robot. Very easy to do when the last several were winners, extremely difficult to do when the last several were losers.