Is 1% Per Day a Realistic Target?

REDDIT QUESTION OF THE DAY
Is 1% Per Day a Realistic Target?

There were a lot of comments on this post talking about how 1% per day is impossible and that any hedge fund would give their left testicle to make 20% per year. People don’t understand that there’s a huge difference between actively day trading a small account like $5,000 or $10,000 and trading $2 Billion Dollars of client money.

So, let's start with the obvious one - your risk tolerance. Hedge Funds use other people’s money, and their primary goal above all else is to not lose it. But there's another big factor to consider: the more money you have, the more power you hold in moving markets and actually influencing the prices of things. This is something that Jim Simmons and Warren Buffet have talked about quite a bit.

This can have a HUGE impact on how difficult it is to execute trades.

Now, how much can you actually make per day? Ok, first off I wouldn’t set it in your head to hit specific targets. Instead, I recommend following this risk management strategy → Link. (its in the “when should you stop trading for the day” section)

On average however, I think if you’re actively trading (meaning taking 2 - 5 trades per day) on a small account, it's definitely possible to grow the account on average 20% - 50% per month if you’re skilled. I’ve experienced this personally and know many good traders who do so also. 

The thing is, we don’t try and compound these accounts over time. As I said in my email from yesterday, at the end of each month, I pay myself the profits and reset the account back to the initial balance I started with. The reason this is important is because every so often you likely will blow your account when actively trading with this much risk. But that's ok, let me explain the math.

If you start with a 5k account and make on average 50% per month. You’ll profit $2,500 each month and then set the account back to $5,000. If every 6 months you blow your account here’s what it would look like. (Obviously, these are just estimations and real life may be very different, for better or for worse).

Month 1 = $2500

Month 2 = $2500

Month 3 = $2500

Month 4 = $2500

Month 5 = $2500

Month 6 = - $5000

Month 7 = $2500

Month 8 = $2500

Month 9 = $2500

Month 10 = $2500

Month 11= $2500

Month 12 = - $5000

Total profit = $15,000

So with a $5,000 account, you managed to make $15,000 in profit in this year's example. 

I think this is quite realistic given the circumstances I outlined.

PRO INSIGHTS
The Hardest Part Is Avoiding Cults

I’ve been in the trading game long enough to see a lot of trading styles and trading “cults” go in and out of popularity.

You’ve got all sorts of people with different styles constantly shoving down your throat why their style is best and why you should follow them. 

Most of them go like this “I used this secret style of trading, and when I discovered it everything changed, 99% of people don’t do this, and that's why they fail. Once I discovered this I finally became profitable.”

Now I’m not dissing people like NNFX or ICT, but their followers are cult followers. 

For the longest time, Price-Action was the end all be all of trading since it's been around the longest.

There were tons of YouTube channels and groups proclaiming their patterns or price action strategies were the only and best way to trade profitably. 

Next came NoNonsenseForex, who took over the trading community by storm and explained why he thought price action was useless and how mechanical trading is the best. 

Now recently we have the SMC (Smart Money Concepts) type channels like Inner Circle Trading, which explains why you have to use these secret smart money liquidity-based strategies and why everything else is garbage. 

The point I’m trying to get at is these “cults” and ideas come and go. There is no end-all-be-all strategy. 

They all work, they all have pros and cons, and at the end of the day, it all boils down to DATA.

If you can prove statistically that something is working for you, then it works!

Avoid jumping from different trading cults and believing that it's some secret sauce that if you can only manage to learn you’ll finally become profitable.

The real reason you’re not profitable is because you aren’t taking the time to really hone, refine, and gather data, on one strategy or type of trading methodology.

Constantly jumping from cult to cult, strategy to strategy, and indicator to indicator is ruining your trading and causing you to fail.

STOIC QUOTE OF THE DAY

This quote encapsulates the Stoic emphasis on action and virtue. It suggests that rather than spending time in theoretical debate about morality, one should focus on actually living out those virtues in daily life. This reflects the practical and action-oriented nature of Stoicism.