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FAQ Realistically, How much Money can I Expect to Make?

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SHORT ANSWER

Allegedly, 90% of all traders fail
This cliché is posted on the boards almost daily. It may or may not be true. Evidence to support this figure is mostly anecdotal, however, it’s certain that many who try their hand at trading quit with less money in their pockets than when they started. So, the balance of probabilities suggests that you would be wise to ‘expect’ to lose money rather than to make any. But hey, that’s a negative attitude and, besides, you’re not one of the 90% are you? No sir, let’s assume that you’re destined to join the elite 10% of profitable traders!

Now the good news
The positive spin on the ‘90% of all traders fail’ statistic is twofold:
1. Many of those that fail are ‘get rich quick’ punters who play at trading in the vein hope that they can turn £100 into a million in next to no time. If this describes you – here’s some great advice for you. . . If it’s money you can afford to lose and you want to have a laugh gambling, go to the races or take a trip to Las Vegas. It’ll be a whole lot more fun.
2. The good news is that the failure rate needs to be high in order to provide the mega profits for the 10% who succeed. In this respect, trading is a bit like the lottery. The jackpot is divided between those who have the winning numbers. The more winners there are, the smaller the cash prize that each winner receives. So, if you’re willing to put in the huge amounts of time and effort required to succeed – the upside is big. Huge. The sky’s the limit!

But . . . (there’s always a ‘but’!)
But here’s the rub. The secret to trading success is not to focus on reward, but on risk. You must minimise risk and keep your losses small. Coupled with this is the need to focus on trading really well, rather than the money you’ll make if you do. In this respect, good traders are like the best premiership footballers. First and foremost, footy stars have to focus on their training, fitness and how to excel on the field of play. The fame, money and beautiful WAGs come second.

The holy grail to success in trading is understanding and applying sound risk and money management principles. Failure to do so could be disastrous. No joke. In extreme cases, this could result in bankruptcy and loss of your house or other assets. If you've not read it already, before continuing with this FAQ; check out this sticky: Essentials Of 'Risk & Money Management'
 
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Realistically, How much Money can I Expect to Make?

LONG ANSWER

Don’t focus on the money
This question is high on the FAQ list and in the minds of many aspiring traders as, not unreasonably, it’s what attracts many of us to trading in the first place. However, as many commentators have noted, financial gain is merely a by-product enjoyed by good traders, it’s rarely their prime motivation for doing it. Certainly, if you start your trading career based on a need to make £1,000s per month or per annum, you’re at an instant disadvantage. To focus on the money while trading will distract you and, almost inevitably, lead to costly mistakes. You’ll be too caught up in how much money you’re making or losing to trade in the calm and disciplined way that is required in order to enjoy success in the long term.

Aspire to trade well – and the money will follow
Sales people who only focus on the commissions rarely make good sales people. It’s only when they focus on the wants and needs of their prospects and how best to serve them that the sales start to roll in. And so it is with traders: they have to focus on becoming the best practitioners of their art that they can be – not the money they might make. That said, this FAQ will outline some of the key factors that will determine how much – or how little – you can expect to make.

A tale of two photographers
If you turn on a camera and give it to a monkey, sooner or later, it will take a photo. Maybe lots of photos. Given what passes for art these days, someone will probably argue that the monkey is a good photographer! Obviously, monkeys know nothing about photography and any ‘good’ pictures they take are the result of luck and not skill. If you could understand monkey talk, how would you answer a monkey photographer who asks: “realistically, how much money can I expect to make doing this?” And if a 1st class honours degree graduate of photography from the Royal College of Art asks their course director the same question, what do you think the answer might be? The two answers range from - probably nothing in the case of the monkey - to, potentially, millions in the case of the RCA graduate.

. . . What’s this got to do with trading?
Well, the monkey won’t lose any money, beyond the cost of the camera. Unfortunately, the same cannot be said for traders. Why? Because, if you don’t understand the markets, the risks involved or how to trade well, you’re very likely to end up as a net loser rather than as a net gainer. Without a doubt, there are a lot of trading ‘monkeys’ out there who, inevitably, help to maintain the alleged failure rate of around 90%. So, in answer the question, at one extreme you could lose all of your capital, your house and your partner and be declared bankrupt. At the other extreme, you could be eye wateringly wealthy. To try and narrow the range down, this FAQ will assume that you are closer to the RCA graduate in the analogy above, rather than the monkey; i.e. you know the markets, the risks involved (and how to manage them) and how to trade. You have a written trading plan that you have back tested and forward tested until you’re blue in the face! The spectrum is still ludicrously wide and needs to be narrowed down further. To help us to do this, two key factors need to be considered when determining the size of potential gains or losses. They are the market(s) that you trade and the size of your account.

Liquid Markets
Some markets are highly ‘liquid’, enabling traders to trade in ‘size’; others are not. A very liquid market is one that attracts a lot of participants, particularly commercial interest – e.g. banks – who have very deep pockets. This is important because it enables traders to buy an instrument at a specific price, certain in the knowledge that there will be someone willing to sell to them at that price. Conversely, there will be traders willing to buy from them as and when they want to sell. An example of a market that tends not to be very liquid - i.e. ‘illiquid’ - is the ‘penny stocks’ market, so called because the share price is less than $0.10. Often, these are small companies that are not listed on the major stock exchanges like the LSE or NYSE. In theory, with $1,000, a trader could buy 10,000 shares priced at $0.10. If the price doubles to $0.20 then, on paper, they’ve doubled their money. However, finding prospective buyers to sell to in order to turn the paper profit into hard cash might not be so easy. By contrast, in normal market conditions, buying and selling 10,000 shares of a stock like Microsoft will be straightforward, as so many people trade it every day. Broadly speaking, its perceived value and the amount it rises or falls, will have little impact on your ability to enter and exit trades at the prices you want. (For more on the pitfalls of trading penny shares, see 'Useful Links', below.)

ES, YM & size
When traders talk about trading ‘size’, they are referring to the number of futures contracts or number of shares traded. For example, let’s take the ES - the e-mini futures contract based on the S&P 500 equity index. The ES is a highly liquid instrument, enabling traders to trade large size, unlike its sibling contract the YM, based on the Dow Jones Industrial Average. According to official CME figures for June 2010, 61,258,075 ES contracts were traded, compared with just 3,688,697 YM contracts. So, all things being equal, if you’re an index futures trader and you want to trade size, you’ll opt for the ES in preference to the YM. Equities traders have to gauge the liquidity of the individual stock when determining how many shares to trade. The penny stocks example above illustrates that you don’t always need a large account in order to trade a lot of shares, but you do need liquidity.

Volatile markets
The bedfellow of liquidity is volatility. This refers to the amount an instrument moves within a specified time period, e.g. an hour, day or week. A common mistake made by novice day traders is to trade highly liquid stocks without taking into account of their volatility. This is ‘monkey’ trading and results in the demise of many wannabe day traders. If you propose to trade large size of very volatile instruments, you’ll need a very large account indeed, as you’ll need very wide stops. And trading size with wide stops is potentially very, very costly. Another rule of thumb is that the more liquid a stock is, combined with a relatively low share price, the less volatile it tends to be. Microsoft in the U.S. is a good example of this, as is Vodafone in the U.K. In order for traders to make a good profit from small price movements, they have to trade large size. This principle applies to all Forex traders. That’s why an intra-day move of one cent in the value of the U.S. dollar is regarded as huge!

Small account + large size + volatile instrument = monkey trading
Generally speaking, the ability to trade size tends not to be the main concern for most retail traders, because their accounts aren’t big enough for it to be an issue. However, what is an issue is the exact opposite; their accounts are too small. Trading volatile markets in too much size with a small account is a recipe for disaster. It’s another monkey error made by novice traders who focus on the potential gain, as opposed to the potential loss. For example, the ES can move 20 points in one day. If you’re trading say, fifteen contracts, that’s a profit or loss of $15,000! Great if it’s the former and a bummer if it’s the latter! Even if you’re happy to risk 5% of your equity on any one trade (not recommended by the way), you’ll need an account funded to the tune of $300,000, in order to comfortably take a hit this big and to stay within your 5% risk parameter. Many brokers advertise margins as low as $500, i.e. you only need $500 in your account per contract traded. So, in theory, you’d only need $7,500 in your account to trade fifteen ES contracts. Don’t be lured by this – it’s financial suicide. You’re far more likely to ‘blow up’ – i.e. lose all your money - than you are to end the day in profit. The index would only have to go against you by ten points and your entire account would be wiped out in a single trade. The issue of account size is expanded upon in another FAQ: How Much Money Does a Trader Need to Start Trading?

Think percentages – not in $ amounts
The size of your account is critical in determining how much money you’ll make. Rather than thinking in pound or dollar amounts, it’s preferable to think in terms of percentages. On the face of it, a trader who makes $10,000 in one month is doing really well. Wow, $10k in one month! However, if they have a $1 million account, this only represents a 1% return. Suddenly it doesn’t sound quite so impressive. Whereas, a trader who makes the same amount with a $100k account has made a 10% return. That’s much more impressive. As a rule of thumb, and for reasons not covered here, it’s easier to make impressively big gains on very small accounts (say $1,000 or less) than it is on large accounts (say $250k or more). Equally, it is usually true to say that the bigger the return, the greater the level of risk incurred. So, be very wary of traders who claim to have doubled their account in a matter of days or weeks. Most of them are only able to do this by assuming massive levels of risk and exposing most - or all - of their account to catastrophic loss, such as the example above of the trader with a $7,500 account trading fifteen ES contracts.

Risk & Money Management
Central to your trading plan will be your risk and money management strategy. Risk management focuses on the steps required to minimise losses, while money management focuses on the steps required to maximise gains. Central to both these objectives are two simple ratios which, between them, enable traders to create a ‘positive expectancy’. They are:
The Success Ratio
Out of any given sample, what is the total number of winning trades, relative to the total number of losing trades? This is called the success ratio or win:loss ratio.
The Profit Ratio
This is the average £’s won on winning trades, relative to the average £’s lost on losing trades. This is called the profit ratio and is sometimes referred to as the ‘Sharpe Ratio’, although this is technically incorrect.

The important thing to note about the success ratio is that it is not necessary to have more than 50% winning trades to have a profitable trading strategy. Indeed, some of the biggest names in the industry utilise strategies that are profitable only 30% - 40% of the time. For more information on this and the two ratios, along with what positive expectancy means, please refer to the Essentials Of First Steps Sticky.

Putting it all together
For the sake of argument, let’s say that you’re a day trader and that your strategy as detailed in your trading plan indicates the following . . .
• A success ratio of 1 : 1 or 50%, i.e. half of your trades are winners and the other half are losers.
• A profit ratio of 1.5 : 1, i.e. the average profit on winning trades is one and a half times as large as the average loss on losing trades.
• Risk of 1% of your account equity on any one trade which, for the purposes of this example, will also be the size of the average loss. In other words, losing trades lose 1% of the account value and winning trades make 1.5% of the account value.
• You average 4 trades a day.
• Based on the above, i.e. two losing trades at 1% and two winning ones at 1.5%, you have a net daily profit of +1% of account equity. This equates to 5% per week, 20% per month and 240% per annum.

On a $5,000 account, this will produce profits of $50 per day, $250 per week and $1,000 per month. On a $25,000 account, it will produce profits of $250 per day, $1,250 per week and $5,000 per month. On a $100,000 account, profits of $1,000 per day, $5,000 per week and $20,000 per month. Please note that these stat’s are purely for illustrative purposes only. Your actual figures will, inevitably, be very different.

On the face of it, these stat’s sound as if they’re easy to achieve. On the contrary, they’re not. To make 1% per day, day in and day out, consistently over the long haul will require a huge amount of effort and commitment. It will be very difficult to achieve and harder still to maintain. Additionally, costs have not been taken into account. You’ll have to pay commissions, fees and charting subscriptions etc. – all of which mount up. In his book ‘Come into My Trading Room’, Dr. Alexander Elder suggests that a realistic goal for a newbie trader is to break even after expenses in the first year, equal the return you would get from a Building Society account in the second year, and to aim to double that return in the third year. Members of forums like this one are quick to point out that no one enters the trading arena to endure returns as dismal as these. Of course, they’re quite correct; the 20% returns per month - or better - outlined above is what we’re all here for. To be fair, some traders not only achieve returns like these, they actually do much better than this. It’s definitely possible, great wealth can be yours. Just don’t kid yourself for one minute that it’s going to be easy. Good luck!
 
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Realistically, How much Money can I Expect to Make?

USEFUL LINKS

If you find other threads, Articles or sites on your travels around the net that are relevant to this FAQ, please add a link to them in this thread, outlining what it is that you like about them. Thanks!

T2W THREADS
None here? If you find a good one, let us know and we’ll add it!

T2W ARTICLES
What can I make in my first year trading? by Joe Ross
Too many beginners have unrealistic expectations of trading. Forget the dreams of instant wealth and take things slowly.
Learning How to Trade vs Trying to Get Rich Quick by Brendan Egan
This article explains why it's important for traders to focus on learning how to trade well - and not on the money they hope to make or the speed with which they hope to make it.
8 Types of Penny Stocks to Avoid by Peter Leeds
As noted in a post to the comments thread, this article ought really to be entitled: '8 Reasons to Avoid Penny Stocks'.

EXTERNAL LINKS
None here? If you find a good one, let us know and we’ll add it!
 
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If you need to ask this question then you do not have the correct mentality. Learn to trade and the money will follow. Loads and loads of it.

But in order to learn to trade you need to go through a "starving artist" phase where you are committing loads of time, energy and work without any material reward. This period of time could last 6 months to five years or maybe forever if you have no aptitude. How many people are prepared to do that?

From Trading Psychology - So You Want To Become A Futures Day Trader

So You Want To Be A Futures Day Trader
You wake up one morning with a really BAD idea – you have decided to start making your living by becoming a futures day trader. BUT how can this be such a bad idea, don’t people get rich day trading futures? Where did that idea come from? Did you see one of those ‘work’ for 10 minutes a day and make $4200, ‘get rich quick never lose’ hype system ads? Or did you visit a chatroom, and the ‘resident guru’ made it all sound so easy? Maybe, the title of this article should have been – How To Die A Painful Death Chasing A Carrot.

Get real. IF systems like that really were available, or if day trading really was that easy, wouldn’t everyone be a rich day trader instead of being a statistic in the 90 percent of all day traders fail club? IF you can’t be truly realistic regarding this, truly believing and understanding the odds against you THEN you do not have a chance. You would really be best off ‘giving up’ on this idea about day trading, and save yourself a lot of pain and money.

Over the last nine years, I have known and worked with many traders, and over this time have seen the unrealistic expectations, and problems with their approach towards trading, where people who possibly had a chance to be successful were actually done before they started. I have thought about writing a book about this. The book would not be about how to day trade, but instead, it would be about how to learn how to day trade – the key word being learning NOT trade.

It Can’t Just Be About The Money

How can learning any new skill start with a total focus on the end result, instead of how you plan to achieve that result. That would be no different than trying to put the roof on a house before you built the walls, or expecting to receive your college degree the day that you begin classes. Talk about unrealistic expectations – these are impossibilities – as are any get rich quick trading schemes. Yet many come into day trading as what I refer to as a job replacement ‘trader’, this is a ‘trader’ who tells me the following: I know I need to spend the time making a trading plan and ‘properly’ paper trading it before I start trading real money, but I can’t, I just got laid off from my job and need to trade now to make some money. There is another statistic for the 90 percent club.

When I meet a new trader who has some interest in what I am doing, this is probably the most frequently asked question: how long is it going to take me to be profitable with your method? This ‘trader’ has never traded real money yet, or has been losing at whatever ‘trading’ that they have done, yet what they want to know is how long will take to be profitable with a new method. My answer to questions like these is to first ask my own question: what are you planning to do to learn this method, how can you possibly become profitable with any method before you learn it? I can remember one specific ‘trader’ that I talked to 2-3 times before joining our group. In the conversations this trader told me how many thousands of dollars he had spent on trading systems, methods, and trading groups – it was almost like he was ‘bragging’ about it? He never learned how to trade, and he had never traded profitably. BUT once again the same question came up – how long is it going to take? I told the ‘trader’ my thoughts regarding this, while also saying that if this was the major concern that they would probably never learn it, and they really shouldn’t join the group. The ‘trader’ assured me that this time it would be different BUT it wasn’t – they never studied the training materials, but I would get an email every couple of days asking me when I thought they should start trading real money. And there is another statistic for the 90 percent club.

Trading just can’t be about the money, especially from the beginning, but really at any point in your trading career. Trading is about the process; that process being learning a method and the related trade setups, the creation of what I refer to as a base setup plan. Does it seem logical, that you actually need ‘something’ to trade before you get rich trading it? After this is done, start paper trading this plan in order to gain enough screen time and repetition that you can make adjustments – learning your mistakes and misreads that you make in real time execution. Accomplish this, and then begin to keep profitability records of your paper trading, first trading for profitability, and then trading for proficiency where you concern yourself with the percentage of profit potential you are gaining, not simply whether you make a profit.

How long is this going to take to do? Who knows, but there sure aren’t any shortcuts. Actually, it probably won’t ever happen. Paper trading to a proficient level really is a very difficult thing to accomplish, as ‘traders’ aren’t willing to work hard enough, and with the necessary commitment, as there is no financial reward from paper trading. Furthermore, since there is also no financial risk, paper trading is quite often turned into a game and becomes of a waste of time, and creation of bad habits that become to hard to change. But skip the process altogether, because you want to start making all of that money that caused you to decide to become a day trader to begin with AND – another statistic for the 90 percent club.

Introduction To Trading Psychology

I would guess that most everyone has had experience with some kind of real time performance stress before. Maybe it was a college final, or maybe it was related to athletics, maybe you had to give a speech, or maybe you were in a theatrical performance. Whatever the case may be, for myself, as well as anyone else I remember talking to, nothing was even similar to the ‘feelings’ that were ‘brought on’ by day trading real money real time. My background included athletics, and I can remember pitching in a state final baseball game, and I can remember last second free-throws in tournament basketball games – it was a piece of cake when compared to starting to trade real money. Nothing can prepare you for risking your money on an unknown outcome, of which you have no physical control, while watching price bars that all of a sudden have seemed to start ‘ticking’ at the speed of light – with your heart racing and the inability to sit still and the dry mouth and the sweaty palms and the feeling like you are going to puke – etc etc etc. Doesn’t that sound like fun – I will bet that get rich trading scheme didn’t mention any of this?

IF you are going to get through these emotions known as trading psychology, and all the different fears and forms that it can take on, it is going to be involved with your preparation, repetition, and understanding of that base setup plan, along with the knowledge that you have been able to paper trade it proficiently. No, it’s not the same as real money, and you will still have to become used to executing real time BUT at least you do have the confidence in knowing that what you are going to trade does work, and on a level in excess of simple profitability. It will take time for these emotions to leave you, and maybe some never will, but that is all right. It is not necessary to eliminate all emotion to be able to profitably trade, it is necessary to control them, and being able to have the self trust that although you can’t ‘know’ what is going to happen, you can ‘know’ what you are doing and that you will act as closely as possible to the intended ‘plan’. Does going through a learning process that includes paper trading still sound like a waste of time? No problem – there is still plenty of room in the 90 percent club.

Work Ethic And The Fear Of Failure

Again I am thinking about that question – how long is it going to take to profitably trade your method? I don’t know, are you really going to work your hardest? The fear of failure can take on many manifestations. What I have seen quite frequently, is how this fear is related to the ‘traders’ sense of self esteem and self worth – that failing at this, failing at anything, will make them ‘less’ of a person, and they can’t risk allowing this to happen. Consequently, they never work their hardest at learning to trade. They won’t put it all on the line, they always hold something back. Why? Because by doing this there will always be a ‘built in’ excuse for failing – IF I had really tried my hardest THEN I am sure that I could have done it. The result is obviously the same, but at least they don’t have to blame themselves or take a ‘hit’ on that precious ego. Is failing at learning to do something, and being a failure really the same thing? In my way of thinking, trying your very hardest and not being able to do something is just the way it goes some times. We aren’t going to be able to do everything we try, no matter how hard we work at it. Failure on the other hand is what I described – failing because you didn’t ‘step up’ and try your hardest, instead you ‘held back’ trying to protect yourself. You want to learn to day trade, check your ego at the door before you start – or you too can join the 90 percent club.

Do You Still Want To Make Your Living Day Trading?

Have I talked you out of becoming a day trader – do you still think this is a great ‘get rich quick’ way of making your living? Although it wasn’t my intentions to change anyone’s mind, if this is what has happened, then I am glad. Yes, trading can be ‘lucrative’, and yes, you can get ‘rich’ trading, but you have such a long road to travel before this can occur. Many people ‘say’ they know this, but they don’t really ‘believe’ it. They think that they will be different, they think that they will be the one that ‘bucks’ these odds BUT then they won’t go about it differently. If nothing else, it should be very clear, that if 90% of all day traders lose, then to have a chance at being successful, you obviously are going to have to approach this differently than the vast majority does. Go for it BUT focus on the process, have reasonable expectations of what is really involved, and then do what is necessary to learn how to trade – that 90% club is far too big.
 
There's not much I can add to rags2riches' excellent, very comprehensive post.
The journey is the reward indeed. If you focus on the money from the beginning, than you're already a step behind. Focus on the process, focus on understanding trading behaviour and traders. Once you get a more profound understanding of how markets behave, think about risk and money management. But that comes later. And finally, think about how much money you can expect to make based on your backtesting and papertrading. Divide that number by 1.5 and you'll have set yourself a realistic target.
 
This is a complete stab in the dark but, on IG indexes annual accounts it showed that they made about £2,000 per client, so one could argue that:

"On average, the UK retail trader will expect to lose £2,000 per year"
 
This is a complete stab in the dark but, on IG indexes annual accounts it showed that they made about £2,000 per client, so one could argue that:

"On average, the UK retail trader will expect to lose £2,000 per year"

I think that's a stab in the dark indeed, but when a trader loses money another trader makes a profit. The only profit brokers make comes from spread and commission costs.
 
There's not much I can add to rags2riches' excellent, very comprehensive post.
The journey is the reward indeed. If you focus on the money from the beginning, than you're already a step behind. Focus on the process, focus on understanding trading behaviour and traders. Once you get a more profound understanding of how markets behave, think about risk and money management. But that comes later. And finally, think about how much money you can expect to make based on your backtesting and papertrading. Divide that number by 1.5 and you'll have set yourself a realistic target.

hi FW,

why divide by 1.5. is this what you have found to be correct when comparing your own papertrading/forward testing to actual results when the system/approach hits the real market

just interested to know
cheers

belflan
 
hi FW,

why divide by 1.5. is this what you have found to be correct when comparing your own papertrading/forward testing to actual results when the system/approach hits the real market

just interested to know
cheers

belflan

I was going to say 2, but that might be an exaggeration. It's best to stay conservative and we all know that when making the transition from papertrading to real trading other elements can come into play. A lot of trader will have observed that their results in real trading don't live up to what their backtesting showed. That's why I think it's healthy to stay realistic. However, the number can be anything between 1 and ... I haven't exactly done any empirical research into the matter. But I hope you see my point.
 
MP -- starving artists indeed !

If you need to ask this question then you do not have the correct mentality. Learn to trade and the money will follow. Loads and loads of it.

But in order to learn to trade you need to go through a "starving artist" phase where you are committing loads of time, energy and work without any material reward. This period of time could last 6 months to five years or maybe forever if you have no aptitude. How many people are prepared to do that?


While i totally agree with what you say here, and have often had those very words as my signature, I have some issues with the writer of the book you quote, especially concerning the word "trader ~!"

Fully close to 3/4's of my posts are directed at telling newbs to "get the experience and the money will follow, up to your abilities in the market", but it is NOT 90 % of the TRADERS that FAIL, but 90% of those who enter the field of trading that fail, and its always the same thing --- no experience and blown accounts from NO money management.

trading in and of itself is just NOT brain surgery, although like brain surgeons, there are those in the top 10% and those in the bottom 10% with the majority all running around in the middle ground. Given the time needed to LEARN the culture, rules and methods of trading, most people can do it to varying degrees of success, BUT THEY HAVE TO GET PAST THAT STARVING ARTIST PHASE !

THAT is the 90% who dont make it -- the ones who simply jump on an idea of grand riches with no work (hey, ill get a robot to trade for me, while i tune my maserati !!") and discover down the road that this market is inhabited by the greatest traders there are, and theyre all land sharks, and they eat newbies for breakfast, lunch, snacks and dinner !

as far as the question of "how much can i make", while one certainly should not approach ANY career from that pov, it is understandable if one is seeking to make enough to live on this world, pay bills and all the rest we humans are expected to do, and i can only think that you can "earn to your abilities, interest and amount of work you put into the quest, nothing more or less !"

BUT, if youre decent, learn well and apply that knowledge, you can expect to make a lot more than most "wage slaves" --- a LOT more !

enjoy and trade well

mp
 
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I average 1-1.5% a week, for what that's worth. (after 16 months.....I am very conservative, and because of it, havent had a losing week since December of last year.)

And as written above.....there is a show called "wall street warriors" here in the US which shows "some of the greatest and brightest traders", and they are flat out moronic.

I dont know if you Brits get it over there, but check it out, you can watch it on Mojo HD (A television channel.....there a full episode on their site.) Or, even look it up on youtube.

Interesting, and just listening to these "experts" shows why there was a subprime crisis in the first place.
 
I average 1-1.5% a week, for what that's worth. (after 16 months.....I am very conservative, and because of it, havent had a losing week since December of last year.)

And as written above.....there is a show called "wall street warriors" here in the US which shows "some of the greatest and brightest traders", and they are flat out moronic.

I dont know if you Brits get it over there, but check it out, you can watch it on Mojo HD (A television channel.....there a full episode on their site.) Or, even look it up on youtube.

Interesting, and just listening to these "experts" shows why there was a subprime crisis in the first place.

well the traders, per se, didnt make the mistakes -- their bosses did, but that only proves the bosses werent much better than the traders !

But i have to agree with your thoughts concerning "traders" --- certainly proves that you dont have to be smart to trade, just experienced or someones son or daughter !


also explains why so few woman are in the job --- hard for woman to "dumb down" that far !

mp
 
Is there an "applaud" button?

If so, show me, so I can use it for ragstoriches.

Great post.

Thanks Clockwork but all praise should really go to the Trading Psychology - Trading Psychology Management website (no affiliation). When I first stumbled across the site and read the article a lightbulb went off in my head.

As I am currently in this starving artist phase I am finding that for every lightbulb that turns on, there are 2 new lightbulbs that need lighting up. But that is the challenge... :idea::idea::idea::idea::idea::idea::idea::idea:

[Thank you all for the rep - I actually have a power of 5 rep points now :)]
 
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Interesting, I have been involved in various business activities for the pat 40 years, some successful some not so. When it has been good it was the information I had in my head at the time that showed me the way to success. Charts, graphs, systems are all very well but by and large they show you historical movements not what started the movements in the first place. It's a bit like fashion. It's no good waiting 'till Primark have knocked off E St Laurent to make you copy and get it onto the market, you must have seen the original on the catwalk the same day as Primark did.

I have not been at this long and so far I doing OK. I invested in RANSQUARK Gold which is a squark service directly from the dealing rooms to your computer by voice in real time. You get a second by second account of breaking news and exactly whts going on in the world, you will see the markets reacting to this immediately - ignoring any chart input you may have set up. Yes, by by all means use the technical info to learn how the markets react to the input info, but I feel if you just trade dots and lines you will not be a success.

Markets are about sentiment, supply and demand, thats all. If you are not aware of what is driving those sentiments then you are stabbing in the dark, some times you will find the bathroom door, sometimes and quite often you will stubb your toe on the bed. I would like to see some comment from seasoned, profitable traders and to know their view.

JB
 
Hi Jonathon, welcome to t2w.

Interesting first post and congratulations for finding your way around the site so soon after joining. Your comments may well be moved to a more appropriate thread as this one was nominally set up to discuss empirical returns traders can expect to make. (A subject I personally imagine to be so wide ranging as to be largely pointless and therefore, not particularly helpful to those starting out in trading). Which brings me to your comments.

Most seem to manage to screw up even the simplest analysis of the most basic chart patterns. Adding an RT squawk service (you mention Ransquark, I presume you mean Ransquawk?) will only add to their indecision and over-analysis (and subsequent paralysis or carelessness) in my view.

Sure, once you’ve got the basics nailed and you’re pulling consistent profits and you’ve got a feel for your market, maybe then, but even then I suggest stepping back and thinking it through.

Very few retail traders have the capacity to effectively utilise squawk feeds even if they fully understand the aspects of supply/demand, market mechanics, sentiment and all the other nuts & bolts that make what happens in the markets, happen. They have neither the execution speed, size nor commissions/dealings advantages of pro traders, nor do they have flow or order book insight. Without these, a squawk is likely to be more of a liability than an asset.

You say you haven’t been at it long, how long have you been trading and how long have you been consistently profitable? Were your previous (current) business interests related in any way to the markets you currently trade? Deep fundamental knowledge of any underlying market sector from any angle not directly related to trading per se, may well provide you with those vital insights and experience you may not be aware you are utilising to profitable effect and rather imagine are being provided by your RT service.
 
The sky is the limit, so one can only dream of the profits that can be made.

Realistically, your trading needs to be refined before you can make a consistent income. You don't need to be super brainy, just be able to follow a good plan that includes many aspects of trading.

I think it's good to have a rough idea of what can be made, but not to focus on it too hard for too long. My biggest success in starting this journey has been all of the knowledge I've soaked up as well as experience. Make goals and complete each baby step and you'll make the millions you've dreamed of. Dream big and plan big!
 
I only read a few of the responses none of which answered your question, so I'll share my experiences: As an experienced daytrader of the e-mini S&P contract a very reasonable goal is 150 per day per contract after commission. I usually average more like 350 but I've been at it 10 years. I lost and/or broke even for the first 4 years so don't be disheartened. Be patient and papertrade until you can make at least 150 per day then make the transition. The transition is never smooth but that's no reason to skip the papertrading. Oh and of course before you go to live trading make sure you have a clear edge. I assume from your question you are a long way from that point so be patient my friend. And ignore those who say breaking even or losing is the only realistic option. Why would you want the advice of someone who cannot make it themselves?
 
According to Mr J. Arthur, the sky is the limit. It all depends on the risk you can take.
And of course you decide what you want to earn :). Small risk = small returns Or small loss!; Large risk = large returns Or Large loss! . With reference to Lesgofishn, make sure you have a clear edge!
 
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