£1,000,000 in 1 year and 10 months - sounds like fun!!

[10pips]

[deleted comment]

 

[Hoggums]

Very interesting thread.

'Compounding' is one of key to savings/wealth.

But consistency in stock market is very rare! even the big players struggle for form.

Yep - compounding works the opposite way too. if you start with 1000 and lose 50% then that's £500 - not much to cry about. However lose 50% of your 100,000 and that is something to worry about - therefore the compounding argument doesn't work - because the more capital you trade with - the more likely you are to trade it conservatively - and therefore the smaller your returns will be in later years - assuming your equity curve grows.

 

[rdstagg]

Yep - compounding works the opposite way too. if you start with 1000 and lose 50% then that's £500 - not much to cry about. However lose 50% of your £100,000 and that is something to worry about - therefore the compounding argument doesn't work - because the more capital you trade with - the more likely you are to trade it conservatively - and therefore the smaller your returns will be in later years - assuming your equity curve grows.

Let me chuck in my one cents worth...
Compounding is key but the difficulty with reaching £1m, £10m even £100m are as follows
1. If you are used to earning 50kpa how will you feel once you reach £100k - see hoggums post below. Losing £50,000 of £100,000 is the same 50% drawdown as you had at £1,000 but inside you are now dying because ......you are no longer trading with risk capital but core capital (it's now yours not "theirs"!).
2. If you trade with core capital you don't let profits run and you may even let losses get out of control (emotional trading)
3. If you manage to cope with all that lets move on to "fills". If you are trying to buy 50,000 shares or 100 futures contracts the stock/future has to be massively liquid otherwise your strategy could be ruined by slippage as you become a whale! So now your universe is much much smaller - I am not saying it's impossible but you need to think about it.

Despite all that I so look forward to the day when I can report "Yes I have done it"!!!!

 

[SpreadBunny]

This is an interesting thread.

If anyone care to download, I made up this 4% daily profit spreadsheet. If I haven't made mistakes, according to this, you'll be a millionaire by week 48 with mere seed capital of £100. So has anyone achieved this? :cheesy:

If it's not achievable, where do you start to go wrong?

In any case, it's nice to have it printed so I can dream on.

 

[Trader333]

You will need to take into consideration the average length of time your trades last and then factor in that when you start using large stakes you will be placed on manual trading which will slow down how fast you can get filled. I know of several people who were placed on manual trading when they started to increase their stake to a high level.


Paul

 

[SpreadBunny]

You will need to take into consideration the average length of time your trades last and then factor in that when you start using large stakes you will be placed on manual trading which will slow down how fast you can get filled. I know of several people who were placed on manual trading when they started to increase their stake to a high level.

Paul

and may I ask how much is considered a "large stake"? e.g. over £500pp?
My guess is that as you start to use larger stakes, you may trade much less and become selective.

 

[jkplay]

and may I ask how much is considered a "large stake"? e.g. over £500pp?
My guess is that as you start to use larger stakes, you may trade much less and become selective.

A large stake is totally dependent on your own risk capital. Some people risk £250,000 on a trade like it's nothing while some would go skint loosing £2,000.

I think that you should be selective in all your investment decisions no matter what your stake size is.

JK

 

[rdstagg]

Manual Trading

You will need to take into consideration the average length of time your trades last and then factor in that when you start using large stakes you will be placed on manual trading which will slow down how fast you can get filled. I know of several people who were placed on manual trading when they started to increase their stake to a high level.


Paul

I have never heard of that please expand a little more if you can.
Edit - I mean the bit about people being placed on manual trading (implying that they auto trade the rest of the time?) - the rest I understand

 

[SpreadBunny]

A large stake is totally dependent on your own risk capital. Some people risk £250,000 on a trade like it's nothing while some would go skint loosing £2,000.

I think that you should be selective in all your investment decisions no matter what your stake size is.

JK

Thanks JK. Of course it make sense what you are saying.

I am thinking of launching SpreadBunny's "£1mil in 48 weeks sb challenge".

What do you think guys? Would you like to bet?

 

[jkplay]

I am thinking of launching SpreadBunny's "£1mil in 48 weeks sb challenge".

What do you think guys? Would you like to bet?

Yeh, im short £1000pp

JK

 

[SpreadBunny]

OK guys, I've got my V2 spreadsheet.
I lost a plot at about week 42 but I think 500pts per week is achievable :cheesy:

 

[top trader]

i would be more than happy to make 0.1% per day on £10000 to make 38k in a year time..........if i am LUCKY.

 

[charliechan]

I read somewhere that a clever person would put £10,000 into a 4% annual return bank account when they where 25 and then deposit a sum of £1,000 into that account every year. (That works out at around £85 a month)

When they retired at the age of 55 they would have £100,000 in that account to retire with.

So it got me thinking about the power of compounded interest and I thought id post some figures for you.

Enjoy :

1% return a day on your capital - your capital DOUBLES every 71 days.....
2% return a day on your capital - your capital DOUBLES every 37 days !
3% return a day on your capital - your capital DOUBLES every 26 days.....
4% return a day on your capital - your capital DOUBLES every 20 days !
5% return a day on your capital - your capital DOUBLES every 17 days.....
6% return a day on your capital - your capital DOUBLES every 13 days !

Of course this is all dependent on you reinvesting all of your returns - but even so :

1. If you started trading with £10,000 and averaged a 1% return every day
2. Reinvested that return and got another 1% the next day ect.
3. Worked 5 days of the week, 52 weeks of the year!!

Then you would have £1,000,000 in 1 year and 10 months..........................

So come on - lets all make a million!!!

good post. the sooner we realise less is more, stop the greed and boredom trades the better. they are often the cause of drawdowns, not the plan/idea per se. (imope )

 

[charliechan]

and may I ask how much is considered a "large stake"? e.g. over £500pp?
My guess is that as you start to use larger stakes, you may trade much less and become selective.

no imo. because you wouldnt have reached larger stakes until you have learnt to be selective.

 

[charliechan]

I have never heard of that please expand a little more if you can.
Edit - I mean the bit about people being placed on manual trading (implying that they auto trade the rest of the time?) - the rest I understand

it generaaly applies to spread betting. if your order is significant (remember sb companies make money from customers money) it is more risk to them. so you must phone in orders which not only is slower, but means they quote a biiger spread making life harder for you yet again. the upside is that you have a better audit process if there is a dispute (rare)

i still cant understand why people sb. oh yeah. its tax free.

i guess small accounts are attracted because they can trade at say 10p a point not £10. but given they have a small account, the wider spreads at sb will be a significant cost. i think it would be better to take the money and trade us stocks with ib who will probably take the business. trade low priced stocks with tight spreads saving money. if you want to trade a commodity, trade stocks in that business?

 

[rdstagg]

Thanks for the explanation

it generaaly applies to spread betting. if your order is significant (remember sb companies make money from customers money) it is more risk to them. so you must phone in orders which not only is slower, but means they quote a biiger spread making life harder for you yet again. the upside is that you have a better audit process if there is a dispute (rare)

i still cant understand why people sb. oh yeah. its tax free.

i guess small accounts are attracted because they can trade at say 10p a point not £10. but given they have a small account, the wider spreads at sb will be a significant cost. i think it would be better to take the money and trade us stocks with ib who will probably take the business. trade low priced stocks with tight spreads saving money. if you want to trade a commodity, trade stocks in that business?

Thanks for that - I had never heard of that happening before!