HOMEWORK please. What is the bar for a professional trader? $/day or $/week or $/month?


#1

Need more demo account training (lost much money recently). I’m not sure what my threshold should be to get back to live trading. Consistency for 200$/day? 500$/day? 500$/week? 2000$/week? I want this standard to be as high as possible, while being somewhat reasonable. (I think the word “consistency” is probably the key)

I’m looking for a more complex indicator than just a number threshold… such as my previous amount of simply hitting 2000$ (I made 5000$ with a couple of lucky hedge bets). It’s too easy to get lucky on the demo account with overlapping stupid moves.

I would like to know from traders what could my HOMEWORK assignment be for the next year? What is a reasonable mark that will help me to know that I am (more than) ready for live trading again.

I’m thinking: 500$/week for 10 weeks in a row? (no crazy trades allowed - 100$ day max risk: 5% of 2000$ account).

Your insights would be greatly appreciated. Thanks.


#2

Risk management is the first thing This is paramount to everything else as it is what ensures survival After that comes profit management

you need to trade your account like it is a live account - ie even if you have 25k in demo - trade it like its 2k -

plus say you get “lucky” and knock it out of the park (act as if you have withdrawn that money - or at least half of it) as if you made 5k - you should definetely have pulled out 2500 etc…

As far as a number demo goal - i would be more like $2k a month for 3 months in a row versus trying to put it on having a 10 week winning streak.

The goal is not money every day (although that is what we want). Sometimes not even money every week. But the goal is profit each month. This is important to understand otherwise you put to much stress on “winning” and not enough on trading well. (ie you don’t win a football game by wanting to win it - you win by focusing on each play each down - gaining yards for your team and limiting the gains of the other team) focus on each play.

Note this reality also helps put risk in check as you have ot understand you have to have drawdown weeks etc… and money to come back with.

There is no magic number for being ready. But you must have risk/profit management in place and have consistency on trading.

Note if you risk $20 to make $80 and lose half the time you are a profitable trader - if you risk 90 to make 10 and win 90% of the time you are breakeven. So don’t make it all about how often you win. Its also how much you make when you “win” versus how much you lose when you lose.

If you can make $100 a day consistently you can make $1,000 a day consistently. It just more money more contracts not more trades.

Hopefully this helps some.

Darrell


#3

Thanks Darrell. That helps very much and provides a clear goal. 2000$ for 3Mo seems like daunting goal for now, but the challenge is really exciting.

I am looking forward to doing this right - it will mean waking up many early mornings and training before work. I think my biggest hurdle is overcoming the inherent sensation to make profits. I tell myself it’s not the point, but putting that into practice has been the most difficult part. I’ve learned a lot about myself over the last two, three months… and I’ve also learned a lot about my country through the variable of finance and business. Really interesting how this work… reveals.

Thanks


#4

I have a business background which includes alot of investment and risk management. In the various writings I ahve read related to building a trading business and risk management,I don’t recall much discussion of the concept of Return on Investment as it may apply to trading. Most of discussion revolves around good risk management practices based around rules and decision making discipline. All good stuff and absolutely appropriate. My question is: Is setting ROI goals appropriate for setting risk management and profitability goals in building a trading business. Or, is it incompatible with it, however important in it is in financila/investment decision making in other types of financial businesses?


#5

There is no ROI without risk management over the long term

Simple thing on ROI - is withdrawal

If you have big day pull out half profits End of weeek pull out half profits no matter size Always be withdrawling half

I have a forum post under steward about money management the 5% rule etc… check out the post and videos.

ROI is a stock trader mentality slow and nothing breaks even after inflation

Return on account - goal is 5% or more a day - see video on 5% rule you will see :slight_smile: