Ok so you may of heard about the power of compound interest when it comes to investing. Well in day trading we can do the same.
In this example I am going to use 5% per day increase. Wow 5% a day I hear you say impossible. I don't think it is. On a higher risk account say 2% risk per trade all you need is one winner of 2.5rr. Can you do that every day without losing? No way you will mess up some days and other days smash it out of the park but on average I think its possible.
There is a fun calculator you can try out for free:
In this example 5% per day compounded daily for 5 trading days per week and taking no withdrawals. So day 1 bank is $1000 make 5% now you have made $50 and new balance $1050. Day 2 make 5% of $1050 you have made $52.50 and so on.
You will see it is possible to turn $1000 into cool $1m within 7 month. Yes that's why I called this a dream post but in theory it's possible then we don't need prop firm money do we!
You can see as the balance rises the speed of increase goes wild. If you can get a steady growth daily on average you can in theory grow a small account very fast without taking stupid amount of risk. Add prop firm gains into your live accounts and you are onto a winner. There will be a cap on your broker with max lot sizes and liquidity issues you would need to figure out what max balance you wanted to maintain and stop growing then just live the dream with profits. I don't plan to be a billionaire or anything but it depends on your ambitions in your trading life.
Can I make these gains long term? I really don't know, I have been lately but we always get humbled and have bad trading spells. One day I hope to be able to keep the forward momentum going without the terrible drawdown spells, but I suspect even the very best traders in the world have bad spells.
Comments