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lovethetrade
You're entitled to speak for yourself.
What is the monthly expected return trading stocks?
- Thread starter Evermore2017
- Start date
You're entitled to speak for yourself.
I believe you are comparing day trading using the same methodology and logic used in setting up investment/swing portfolio positions, which would be a mistake. They are two different animals and the methods/strategies aren't the same.
The goal of the day trader isn't to diversify their assets among different investment groups, then sit on it for a day before closing all positions and repeating that process the next day. It's to trade a particular stock to capture a portion of the volatility using 4:1 leverage to maximize gains for the short time in that stock, and repeat this process as many times as one sees set ups throughout the trading day.
A $30K account gives you 4:1 buying power, so you wield up to $120,000 in stock purchase capability.
Using Apple as an example- with a price of $165, that lets a trader about 725 shares of a highly liquid stock that has an average daily range of 2.3+ points. A quarter point gain yields $181.25 - commissions. A good trader can earn multiple scalps per day.
Of course day traders look for the most volatile liquid stocks where the daily range and potential for profit are maximized.
The cost of doing this isn't much depending on the brokerage being used, with some charging a flat rate for unlimited share trading.
Of course achieving such results are skills based and the question of how much one can expect to make can't be determined using portfolio management models. It's clearly up to one's individual skill level.
As over 90% of day traders fail, the average is clearly a negative expectancy which other posters have noted. But for the fraction that actually know what they are doing, one can earn many times above the "guess" of 3% - 10%, with limits based on size and liquidity of the market, assuming small accounts of $25K - $250K.
Here's a formerly active site that tracked earnings of day traders and ranked the best and the worst of them daily:
http://dinosaurtrader.blogspot.com/
The top traders are earning 4-5 figures daily.
====What is the monthly expected return trading stocks?====
Expected from whom?
The average Joe without working method will lose everything soon.
For the trader with the method it will greatly depend on the method, on the trader....
The average here has as much sense as the patients average temperature in the hospital.
Expected from whom?
The average Joe without working method will lose everything soon.
For the trader with the method it will greatly depend on the method, on the trader....
The average here has as much sense as the patients average temperature in the hospital.
birzos,
We talked so much about the wonderful 1% so I did some search on statistics of the 1%:
How much one makes to be considered the top 1% in 2016? I was surprised, only $389,436 per year pre-tax!
http://www.businessinsider.com/upper-income-us-state-2017-9
We talked so much about the wonderful 1% so I did some search on statistics of the 1%:
How much one makes to be considered the top 1% in 2016? I was surprised, only $389,436 per year pre-tax!
http://www.businessinsider.com/upper-income-us-state-2017-9
No matter account size is 30K or 300K or even 3000K, yearly annual return cannot be 20% compounded. (SO monthly return cannot be 2% on long-time average)
Recall that the stock market was running roughly 400 years since the Dutch. Suppose any ONE SINGLE TRADER was keeping annual 20% for the 400 years, then he and his sons (with same trading logic) SHOULD HAVE ALL THE ASSET in the world.
Just calculate 1.2^400 with initial average seed by the trader. 1.2^400 is a lot bigger than the current population in the world.
Therefore not any trader showed annual 20% compounded for the last 400 years. If so, Gates and Buffets should be broke NOW.
How can you do it (attain 20% compounded) after NO ONE did it before for the 400 years?
PS) However annual 10% (or so) might be possible (outperformed) over the market.
PS2) if you ask me "Where is all the money go?", then my answer is "most went to IRS and brokers" since 100$ each day is same as annual annual 24K and 500K for 20 years to tax and commission. Most trader spend 40 years in market to pay 1000K for his entire life.
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lovethetrade
No one ever mentioned compounding over the long-run which makes your post null and void. This is about a fixed amount of capital and the type of average monthly returns that can be achieved on that fixed amount.
Some momentum traders have spectacular returns, many times that 2% monthly, but their strategy works fine for accounts sizes below 200K even lower, but don't work for bigger accounts.