Washington, I can assure you that if you're making 450 USD with a 50.000 account you're definitely doing much better then most traders. What I do myself to know if I'm on track I use a monthly goal and I know about how much of my trades will be winners and how much will be losers percentage wise. I do this by tracking my results over the last 21-trading days and look if I'm on target. It helps emotionally if you have a bad day.
Remember, a 50K account is really 200K. So a grand a day is one half of a percent(.005). Clearly, thanks an attainable goal.
If you're a newbie: - in your first 3 months, you're doing fine if you are breaking even or making small losses - months 3 - 6: look to be making around $150 - $250 per day on average - after 6 months, look to be making $300+ per day, with a handful of $1000+ days - after a year or two, look to be making at least $1000 a day, pretty consistently
A 50K account with 4:1 margin is $200K in buying power. So to make 500 to $1000 per day is a 0.25% to 0.5% return on buying power. For those who suggested that this was achieveable (consistently), what types of setups exist to make this type of return? My calculator tells me that $500 a day over 40 * 5 trading day weeks is $100,000 a year, which is quite impressive.
You have got to be kidding me!! If you size positions like you are trading with 200k, then a 2% position would mean $4,000 risk. If you took a 10% drawdown on your â200kâ your real money account would be cut by 40%!! This level of risk will blow out an account. Leverage is a tool, nothing more. You MUST set your level of risk in the markets based on the CASH VALUE of your account. To say that a 50k stock account is 200k is to say that a 5k e-mini account is âreallyâ 47k! Here is a rule of thumb that I have found to be accurate for realistic, sustainable trading. For every $100 you risk on your average trade, you can expect to see $10,000 in income per year. This makes the math pretty simple. If you wish to make 100k, then you need to be risking $1,000 on every trade, and expect to avg $400/day over the course of the year. You can then work back from this to find out what size account you will need for your style of trading in order to be able to safely take this level of risk. Good Luck and Good Trading, -Bo Yoder
BO: sounds like you have a good understanding of risk management. I scalp the emini with trades lasting less than 15 minutes. Rather than talk $ limit i prefer point limits since i trade 1- 5 contracts depending upon strength of trade set up.I set my initial stop at 2-3 points per contract on the ES ( $100- 150}. Am i approaching risk management properly??
Personally 'how much should I be making' is a pretty silly statement, you worded your question as if the market owes you something for your time put in... With that out of the way, anything over 10% return on risk capital is solid trading... Publias
6 months into trading at a prop shop, I was able to make on an average of $200 a day with an average daily volume of 10K to 15K shares trading $40 price range stocks. my account equity is $25K with 10:1 buying power. trade less can be more profitable. trade only when opportunity presents itself to you. don't just trade because you are a daytrader and sitting in front of a trading platform. my favorite days are that I can do $600 in profit and traded just 3000 shares. at 1 cent per share commission. focus on the trade rather than what % of return you should be looking for. In weight lifting, if you are a 250 lb guy and has never done bench press before, do you ask others, how much weight should a 250 lb person bench press? or do you ask yourself how much should I start with and build it up from there day by day?