In order to figure what you should be earning you really should think in terms of what you are routinely risking. I have trained hundreds of traders and this is a very common question as most intelligent people want to know what they can expect to get out of something as demanding as trading. Here are some facts to take into consideration: 1. 90% of all traders fail to make a living off trading. 2. Most consider the risk they take to calculate possible rewards. 3. A daily goal is difficult to work with because the question arises as to how to go about achieving it, do you stop when you reach it for the day, if you have a couple of great days do you stop for the week or what. 4. You need to know what kind of trader you are to determine the kinds of rewards that justify what you are doing. 5. Consider leverage and capital used to determine rewards as opposed to leverage and capital available. In other words if you have a 50k account and 200k buying power are you using it all or only partial, what type of position sizes do you use, what size stops do you use. 6. Most successful traders I know, over the long haul, average returns of about 7-10% of account size per month. 7. Consider your commission cost as it will eat into your profits quite a bit depending on what kind of trader you are. 8. I have traded for a living since 1997 and it has derived 75% of my income over that time period. My monthly return over that time period is near 10% when averaged out between up periods and down. Considering I made very little trading in 2001 as changed from stocks to futures. Anyway here is my advice after saying all this. Make some calculations that are personal to you in order to come up with what you should be making. What risk per trade do you take? What is your average gain on winners? How many trades a week? What are position sizes do you use? What is your win rate on trades taken? When you ask yourself these questions you will start to see what kind of returns you should be getting based on the kind of trader YOU are. Other traders may be making less or more based on style of trading and risk comfort. Develop your style, quantify it, the money is just the way we ( traders ) keep score. AllenZ
You bums kill me. He asked a simple question so give him a simple answer! Everyone thus far has given some analytical BS answer to a simple question. Now I know why you all hate chat rooms! They are beneath your superior intellect. Shhhh..... My answer: $50K account should return a grand a day.
Good luck!! I would challenge anyone to show me a statement with a 40% monthly return over any extended period of time cause in my book you would be " the man ". I dont care if it is 1k and you are making $400 a month, if you can do it for over 2 years you got my vote. Thunderbolt I love chatrooms ( I run one ) but I have seen your blatant posts about M-T so if they are returning you a grand a day on 50k then please......................SIGN ME UP!!!!!!!!!!!! AllenZ
After I wrote my response I thought for a second as maybe you were being sarcastic and if that is the case then excuse my response. AllenZ
A grand a day sounds good. I've been averaging around $450 per day on the same size account and only 20 minutes of trading each day. It's around what the model initially predicted and I am perfectly content with that. Hopefully when the market turns around the numbers will improve. I personally believe that the answer to the originally posted question should be similar to: "What did you expect to originally make?" In my case I came in with a model that had a predicted strategy return, that's what I'm trying to aim for. I know if I tried to milk it more, I'd probably screw it up (I got greedy a couple of times and paid for it). Just my 2 newbie cents. Good Luck.
My advice is to try as soon as possible to NOT think about daily targets; get rid of the habit of needing to make some arbitrary number, those targets can only hurt you. Think about it, if you haven't met your daily goal or are staring at a loss (especially after a string of good days), you will most likely press and overtrade in an attempt to continue your streak but in the end make things much worse. Conversely, if you're doing well, you might get complacent, start trading way too tightly in effort to "not give it back", or think that you can stop after reaching that goal when in actuality you can probably do 10x more when you are in sync with the market. Either outcome is detrimental, and for what? A silly number that means nothing towards how you should execute the next trade. Starting out, it might be good to keep an eye on total losses for the day, just as a safety valve ("when I lose 1k, I am done for the day). Otherwise, once you've developed a good habit of cutting losses and found a method of trading you are comfortable with, remove all open + closed P/L readings off your screen while you are trading -- they contribute nothing.
Thank you very much for the comments so far. I suspect the glass ceiling I referred to is because once I get above $500 in a day I start getting paranoid about losing it, and find it hard to get beyond the $600 barrier. (On Friday I made $830 but that is unusual for me). I rarely use the 200k of buying power my 50k account affords me because I am a relative rookie and still am overly cautious. I asked about the daily goal because I find I trade better when I feel successful, and I have this suspicion that most people are doing better than me so I want to perform to at least average levels of full time traders, if that makes sense. I relate to the comments of pushing oneself to reckless behavior in order to achieve a goal. On everyone of my losing days I was up at some point, but took chances to try to achieve my goal. I appreciate every comment posted here, and any further comments will be sincerely appreciated.
I can relate to what this guy is asking. In football if you tell a guy he needs x to make a first down, he'll do it. If you say just do your best, many guys will never make x. I use an hourly goal when I'm scalping, but if this guy needs a daily goal so be it. My suggestion, a grand.
washington.. its better to think in terms of how much should you be risking rather than how much can you make.. there is an uneven distribution of wins and losses with every strategy.. that means that each day wont be like the previous.. the key to growing your capital as fast as possible without blowing up is to risk the right amount per trade.. most books ive read suggest 2% max.. although if youre hitting a very high percentage you could probably go 4-5% without ruining yourself.. then take the average number of trades that you normally make, multiply it by your average gain per trade (including losing trades), multiplied by the number of shares you want to trade based on your average stop size and you have a number to work with.. good trading and congratulations on your early success.. -qwik