What kind of approach can make you INSANELY rich?

[ironchef]

...If someone could generate 20% the shorter the timeframe, and compound that, the better. -- Why just 'settle' for that return in a year's window or range

Your argument, or sentence, makes no sense...why are you only able to Compound a year's return -- but not say, for example, a day's return...

I used yearly just as a modest example. If you can do 20% per day, wow, then you will be a billionaire for sure. You are a great day trader, my hat's off to you.

Regards,

 

[Mtrader]

I used yearly just as a modest example. If you can do 20% per day, wow, then you will be a billionaire for sure. You are a great day trader, my hat's off to you.

Regards,

Can you explain why he should be a billionaire?
To come to that conclusion you should logically know exactly:

• how long is he already making 20% a month
• how big was his starting capital
• does he always compound
• is the market where he is active in big enough to continue compounding

Each answer to each of these question have an impact on whether he will be/can be a billionaire or not. But you don't have the answer to ANY of these questions. So explain us the magical trick.

From all the people who made that billionaire statement NOBODY ever was able to explain the calculation. Without solid proof not a single statement is valid.

 

[bln]

Doesn't need billions. I'm perfectly happy with $2m, which is a realistic and achievable goal. Being able to generate annual 30% of that indefinitely one can spend $50,000 every month for the rest of ones life.

 

[Mtrader]

Doesn't need billions. I'm perfectly happy with $2m, which is a realistic and achievable goal. Being able to generate annual 30% of that indefinitely one can spend $50,000 every month for the rest of ones life.

Exactly.
The billionaire statement always comes up if there are no real arguments.
People can make 100% a day without ever making a million. And I can proof that with a real situation.

 

[O(1)]

If you day trade for a living you are unable to take advantage of the magic of compounding and will likely not be very rich in the long run.

how is a day trader not able to compound?

 

[Illini Trader]

Exactly.
The billionaire statement always comes up if there are no real arguments.
People can make 100% a day without ever making a million. And I can proof that with a real situation.

You intrigued my interest when you talk about a real situation making 100% a day. Would you mind expanding on that? Of course an option investment can double in a day with a strong stock move but not a whole portfolio.

 

[777]

Standing next to the right people when you are young and adding value.

-

Stand next to the smartest person in the room
Add value
Throw out toxic people
Say "No" soon and often

 

[Mtrader]

You intrigued my interest when you talk about a real situation making 100% a day. Would you mind expanding on that? Of course an option investment can double in a day with a strong stock move but not a whole portfolio.

You misinterpreted what I posted. The discussion is about the fact that, if you make big returns, you must by definition be a billionaire. Which is complete nonsense.

So I wrote: people can make 100% a day without ever making a million. And I can proof that with a real situation.
So I don't say people make 100% a day, I say CAN which is a big difference. The point was: suppose somebody who even makes 100% a day, it is not sure he will be a billionaire. And I can demonstrate that with a calculation from real life, with the assumption X making 100% a day as starting point.
The 100% was to show that even with the most crazy returns you will not be by definition, or become by definition, a billionaire. There are a lot more factors that impact the final result.

So the statement: "you should be a billionaire" is stupid and wrong.

 

[Handle123]

If you are day trader you can make decent income, you can actually earn quite a lot but the fact is there is practically 0% chance that you will end up in top 100 forbes list if you are just doing day trading

What kind of investing/trading do you have to do to become SUPER rich, like earn BILLIONS$? What should be your approach in theory?

To do it oneself, I don't think it is possible to make even one billion starting with small sum. Yes yes yes, an experienced trader can run up a small account to larger, and to be honest the hardest part is actually taking a 5k account and getting to 100k, but at some point you have to cut back risk. Starting out, often time one might be using $2500 to have in an account to trade one ES till you quad your funds, but at some point you have to increase the $2500 to reasonable about 5-10k, there are so many possibilities of ruin in this game you might be unaware and because of lack of experience, younger trader is walking into quicksand. You pretty much have to open up a firm of either your money you have slaved to build up and have others trade your fund while monitoring them or start a hedge fund and charge much more than most.

Doing it oneself, long term stocks and commodities, but that is not nearly enough, have to be making options plays constantly around the longer term trading, and to do it manually, I think impossible. Day trading has to be automated, so much harder now with watered down ES at $50 a point when it use to be $500 a point, there are too many products to trade while reduces volume on individual instruments, and this causes spreads to be wider and stops to be run with more slippage.

As far as "How much is enough"? Some happy to have $500k and others keep playing to make billions, once your house is paid off, have enough funds to cover you till age 100, anything else to donate to charities. And why not keep trading and racking it up, took you years to get good at it.

But I think at some point, making beyond certain amount would add many problems to one's life than add. Who do you trust? People run to you in hopes of your knowledge rubbing off, you have to have body guards, putting large electric fences to keep people out and for what? If not for ego trip, I would imagine it very lonely at the top.

 

[Tim Smith]

A professional needs more information than this to come to a valid conclusion. You know nothing about the risk reward ratio, Sharp ratio, drawdown…

Seriously ?

You don't need data or statistics to tell you that $5,000 to $5,000,000 in a year is going to involve you taking on serious leverage, serious over-trading, and serious risks.

Please, stop selling people ludicrous dreams that you know 99.9% of people are going to be unable to achieve (and the remaining 0.0.1% only managed a 1000x return only by luck rather than good judgement).

What you are proposing is pure gambling, not even trading.