38. Profit Expectations: What Millionaire Traders Know

http://www.informedtrades.com/

A lesson on how most traders have unrealistic profit expectations which cause them to lose all their money and what realistic profit expectations are when trading the stock, futures or forex markets.

The first step in understanding and building a solid money management plan, the key component in successful trading, is setting realistic profit expectations. All too often I see people open trading accounts with balances of $10,000 or under expecting to make enough money to support themselves from their trading profits within a short period of time. After seeing all of the hype that is out there surrounding most trading education, trading signal services, etc it is no wonder that people think this is a reasonable goal, but that does not make it a realistic one.

As most any truly successful trader will tell you, the stock market has averaged somewhere in the neighborhood of 10% a year over the last 100 years. What this basically means is that if you would have invested in the 30 stocks that make up the Dow Jones Industrial Average, the index which is designed to represent the overall market, you would have earned about 10% on your money on average over the last 100 years. With this in mind, what most any truly successful trader will also tell you, is that if you can consistently double that return, on average, over the long term, then you will be considered among the best traders out there.

Category:

Howto & Style

Tags:

• howto
• trade
• psychology
• of
• trading
• daytrade
• investing
• money
• finance
• business
• forex
• futures
• stock
• market
• informedtrades

[wojtek0000]

"...blow their account up." ha ha! i wouldn't be able to learn so much if this guy didn't have such a good voice and steady speaking manner. Dave for President!

[InformedTrades]

I know can you believe that everyone voted for Barack instead of me? Best Regards, Dave

[patrino]

Wouldn't putting that $10.000 into a leveraged account be a good alternative to using a money manager?

[InformedTrades]

Hi Patrino, Thanks for the comment. The point that I am trying to make in the above video is not that traders should use a money manager, but that a potentially faster way to making money when starting with a small account, is to develop a sound strategy that follows sound money management and then raise money based on that trackrecord. Best Regards, Dave

[morelltechyahoocom]

I have been wondering where to find an online broker whom only charges per trade, SogoTrade say they have $3.50 a trade with no fees, but wheres the catch? also if i plan to swing trade by holding stocks over night can i defualt away from needing $25,000 in assets to trade. I want to get started with around $4,000. What is it that i am missing?

[InformedTrades]

HI Morelltechyahoocom, I am not familar with Sogo trade however I would check into other peoples opinions on the company by searching around for them and seeing what people have to say. As long as you do not open and close more than 4 trades within one tracding session in a period of 5 or less days then you are not required to have $25,000 to start. For more information on this you can search for pattern day trader rule on google. Best Regards, Dave

[MrGripperz]

I know a trader who has made 150k GBP in 7 months in the UK.

[comtwah]

like in baseball, always swinging for the home run "fences" which is unrealistic.

[dalv11]

If i have a solid portfolio, what's the next step in finding someone to back me with money?

[FutOpsTrader]

100 + 300 = 450 ?

[dwranson]

Thank you very much for this video. Excellent material.

[highon74]

@MrGripperz

that doesn't say much.. you need to say how much he started with. 150K on 150K is much different than 150K on 1,500,000

[georgiewilliam]

Are you a millionaire yourself dave?

[PimpMyFahrrad]

@Hillbillygoob if you would have been practicing for a year, you would already know how much money you would be able to make. A seasoned veteran trader, you say?

[PimpMyFahrrad]

Obviously, the percentage of money you make depends on how much time you spend trading? I mean, you say 30 percent in 1 year - is it 15 minutes a week or 24/7?

[drumfisch]

I just translated this for me and other non native speakers:

"SOUND money management" = convincing, successful and clean money management will attract rich people making you work an a reasonable sum of money