Trading is often considered an industry where people can come in and make a million trading from their bedroom, the reality is very different, plenty of new traders ask "how much can i make?"
We have all heard trading stories of guys that ran a couple of grand up to millions. Including huge traders that are among trading folk law (Richard Dennis for example). Many aspiring traders cling to these dreams and risk losing massive amounts of money chasing these dreams. But in reality is it in people's best interest to think "i want to be like that"? Because i cant see how this is possible with sensible money management.
For example say you start with an account of £10,000 (which is beyond a lot of people's appetite) and you average 2% a month EVERY month for 10 YEARS, plus you compound your results (i.e dont take any money out keep reinvesting your winnings over and over) you have still only made about £90k profit. Im sure to many that sounds a decent sum of money, but keep in mind that took 10 years of outperforming the best fund managers in the world and not paying yourself, purely investing your winnings. Ok you might perform even better than that but even so, you arent going to make those millions for a couple of decades.
My point is, so many new traders ask "how much can i make" the real answer i believe is, not very much if you only have a small account to trade with.
Alternatively there is the other approach, to make big you have to risk big and i would argue that this is what a lot of the so called great traders have done and they got lucky. They took a huge risk early on in their careers that paid off, put them on the trading map and then started trading in a controlled manner when they already had a couple of hundred grand/million to manage. And any trader should know for every 1 person that gets lucky and catches an early break there are 90+ people that lose their savings.
Id love to hear from people that can prove me wrong, but i think its beneficial for new traders to understand the realities of the business
We have all heard trading stories of guys that ran a couple of grand up to millions. Including huge traders that are among trading folk law (Richard Dennis for example). Many aspiring traders cling to these dreams and risk losing massive amounts of money chasing these dreams. But in reality is it in people's best interest to think "i want to be like that"? Because i cant see how this is possible with sensible money management.
For example say you start with an account of £10,000 (which is beyond a lot of people's appetite) and you average 2% a month EVERY month for 10 YEARS, plus you compound your results (i.e dont take any money out keep reinvesting your winnings over and over) you have still only made about £90k profit. Im sure to many that sounds a decent sum of money, but keep in mind that took 10 years of outperforming the best fund managers in the world and not paying yourself, purely investing your winnings. Ok you might perform even better than that but even so, you arent going to make those millions for a couple of decades.
My point is, so many new traders ask "how much can i make" the real answer i believe is, not very much if you only have a small account to trade with.
Alternatively there is the other approach, to make big you have to risk big and i would argue that this is what a lot of the so called great traders have done and they got lucky. They took a huge risk early on in their careers that paid off, put them on the trading map and then started trading in a controlled manner when they already had a couple of hundred grand/million to manage. And any trader should know for every 1 person that gets lucky and catches an early break there are 90+ people that lose their savings.
Id love to hear from people that can prove me wrong, but i think its beneficial for new traders to understand the realities of the business
