Quick Question for Experienced Traders

[dcraig1]

4% daily consistent profits is quite a remarkable, yet achievable, feat. Think of it this way: If you're a full-time day trader on US stocks, then given you have a day trading account with a direct access broker, you'll be making $1200 per day (assuming a $30,000 account). There are 252 trading days a year. If you trade everyday, then on average, you can expect to make 252*1200 = $302,000 USD in a year. Now, that is quite a good income to live off of.

The question is, though, how do you get $1200 a day? More importantly, how do you make that sort of money consistently, daily? That's where experience and discipline kick in. Many US stocks move many dollars daily. Find two stocks that move roughly 60 cents each and trade 1000 shares of each (which will most likely require access to a margin account) and you're done for the day.

Of course, the math looks quite nice. Unfortunately, the trick is being to find those two stocks and knowing when to enter/exit to catch the appropriate size move. This is also where experience comes into play.

In summary, while the goal you have set is achievable, don't focus on it too much when starting out trading. If you focus too much on the money, then you'll be putting too much pressure on your trading to meet a certain daily percentage return. This, in-turn, will lead you to taking sub-standard trades in the event you do not meet your targets.

Channel your energy and focus, instead, on learning. Find/create a strategy/system that works for you (I recommend you find one that is already in use since you know it works and people are making money off of it), and just stick to it. Eventually, you'll learn when the strategy works and when it doesn't work and this will help you in meeting your goal in the long run.

Just my two cents

Amit

Nice story but it doesn't connect with reality. Not to mention the fact that the probability of finding big movers is highly dependent on general market conditions.

Nobody around here is making 4% a day on the average over a protracted period. If somebody wants to challenge that with documentary proof please feel free to do so.

Stories about determination, study the markets and all rest are all well and good, but grounding in reality and an understanding of risk are just as important. Goals that don't intersect with reality are not really goals - they are fantasy.

 

[amit1986]

Of course I did not take account of compounding in my calculation above, but you get the idea!

 

[amit1986]

That's exactly my point - it was just a story, it wasn't meant to be real. Being profitable every trading day of the year is far from reality, I know that.

I was merely trying to point out that having such a target will, at best, distract you from the true goal of starting out as a trader, and at worst, won't help with your emotions on losing days (which will be common during the first few months of trading with real cash).

I was suggesting that it is important to keep your expectations realistic. Nobody makes a fortune straight out - it's takes time.

Amit

P.S. dcraig, where in Australia are you from? I spent a good 10 years there (4 years in Sydney and then 6 years in Perth) before coming to Toronto.

Nice story but it doesn't connect with reality. Not to mention the fact that the probability of finding big movers is highly dependent on general market conditions.

Nobody around here is making 4% a day on the average over a protracted period. If somebody wants to challenge that with documentary proof please feel free to do so.

Stories about determination, study the markets and all rest are all well and good, but grounding in reality and an understanding of risk are just as important. Goals that don't intersect with reality are not really goals - they are fantasy.

 

[dcraig1]

Channel your energy and focus, instead, on learning. Find/create a strategy/system that works for you (I recommend you find one that is already in use since you know it works and people are making money off of it), and just stick to it.

You think that strategies that turn 4% a day are available in the public domain? Or 1% a day for that matter.

 

[dcraig1]

P.S. dcraig, where in Australia are you from? I spent a good 10 years there (4 years in Sydney and then 6 years in Perth) before coming to Toronto.

Yeah Gold Coast at the moment. I've spent quite a few years in Sydney too. Also London.

 

[amit1986]

Most likely not. Unless you're willing to dish out a few thousand dollars to the likes of Mr. Charts or Alan Rich for them to teach you the way they trade, it will be very difficult to find someone who is going to show you their edge.

Even if you do pay a professional trader to show you the ropes, you'll still have to put in the hours into practice (many several hundred of them) until you can call it a profession.

But, we all start with an initial level of knowledge of trading and develop our methods from there in the hope that our profits will be consistent one day (irrespective of whether it is 4% or 1%).

Amit

You think that strategies that turn 4% a day are available in the public domain? Or 1% a day for that matter.

 

[Skill Leverage]

Mr Charts returning 4% a day,a) no he doesn't, b) stop being such a bloody sycophant, he's not going to Paypal you some money.

 

[Skill Leverage]

making 4% in a day as a day trader isn't difficult. Making 4% every day for a year is. Any of you who think that it's easy to turn £1k into £6m in a year are seriously deluded, and have clearly never spent a month or two as a professional trader.

 

[Skill Leverage]

4% daily consistent profits is quite a remarkable, yet achievable, feat. Think of it this way: If you're a full-time day trader on US stocks, then given you have a day trading account with a direct access broker, you'll be making $1200 per day (assuming a $30,000 account). There are 252 trading days a year. If you trade everyday, then on average, you can expect to make 252*1200 = $302,000 USD in a year. Now, that is quite a good income to live off of.
Amit

That's not 4% per day compounded, genius, which is what we're talking about. Read the bloody thread and a maths book before you sling your oar in.

 

[dealer911]

making 4% in a day as a day trader isn't difficult. Making 4% every day for a year is. Any of you who think that it's easy to turn £1k into £6m in a year are seriously deluded, and have clearly never spent a month or two as a professional trader.

agreed..! rather than daydream about 4% a day for a year best for new traders to think about not losing more than 4% a day for an extended period of time! look after the losses and the profits take care of themselves!

 

[dcraig1]

making 4% in a day as a day trader isn't difficult. Making 4% every day for a year is. Any of you who think that it's easy to turn £1k into £6m in a year are seriously deluded, and have clearly never spent a month or two as a professional trader.

Indeed, it would require super human perfection. Perfect executions, no arguments with the wife, no out on the p*** the night before, no systems failures of any type, no fat fingers, no swine flu and a constant unwavering state of alertness. And that's just to start with.

 

[Paul71]

What is, or should be, the very minimum a trader should be returning every year? As a retailer, should the minimum return be above any other type of guaranteed investment that is on offer? There are also other ways of looking at this(no doubt Dave Arabianights will call me nit-picky for bringing this up), but if i spend an hour infront my screens every week and return 1% for the week, and another trader spends all week(40hrs) infront of thier screens and returns 3%, who is getting the best deal?

 

[robster970]

I decided to take what the market gives me instead of having a target. I found that my trading changed once I'd hit the target and I'd get a bit sloppy. By not having a target I trade in a more consistent way.

 

[dealer911]

What is, or should be, the very minimum a trader should be returning every year? As a retailer, should the minimum return be above any other type of guaranteed investment that is on offer? There are also other ways of looking at this(no doubt Dave Arabianights will call me nit-picky for bringing this up), but if i spend an hour infront my screens every week and return 1% for the week, and another trader spends all week(40hrs) infront of thier screens and returns 3%, who is getting the best deal?

should be shooting for very high returns otherwise why take so much risk..the returns should be higher than ANY type of guaranteed investment thats on offer.. the target depends on the amount of leverage being used.. if you are geared up 10 x i dont think a 200% return on your money is out of the question.

 

[virtuos0]

I aim to return as low a percentage as possible that allows me to live the life I want to lead. If you want to have real longevity in this game this is the only way to go about it. I can quite happily live on 4% a month.

The other method would be to take crazy risks, make a few mil, and retire. But I'm not a gambling man.

 

[Paul71]

should be shooting for very high returns otherwise why take so much risk..



I only trade within my comfort zone, this personal zone holds zero risk for the forseable future. Your personal risk can only be really quantified by you, maths can express it in numerical form but that's about it. What is risk?

 

[dealer911]

should be shooting for very high returns otherwise why take so much risk..



I only trade within my comfort zone, this personal zone holds zero risk for the forseable future. Your personal risk can only be really quantified by you, maths can express it in numerical form but that's about it. What is risk?

true.. you can only trade objectively when you are within your comfort zone.. trade too big and it messes with your mind!

 

[oildaytrader]

Just an idea, not sure if it's an old one, or a naive one but I'd like to hear some thoughts on it. I'm new to trading, and am still learning the ropes but I was thinking about this possibility, perhaps as a goal to work towards in terms of consistency and skill.

!

First learn to crawl in this game.

Until you are making money consistently for a few years, don't start even thinking about compounding.

If you can make 50% a year be happy ,use a 100 k and live off comfortably.

Virtuoso and many others have given you free time and good advise , appreciate it.

By compounding a 40 % a year earnings, one can safely and easily bring that return up to 60 % a year.This is done by increasing trade size by 10 % after the account has grown by 10 % and incrementing 10 % with every 10% profit made.Realistically speaking you won't get anymore.

 

[pjFX9819]

I agree on the physchology part!

 

[barryb]

That's not 4% per day compounded, genius, which is what we're talking about. Read the bloody thread and a maths book before you sling your oar in.

Hahaha.