 Welcome ladies and gentlemen back to Bitcoin daily today We are doing a video on a question. We get all the time. They're always like Jay How much money do I need to make? $100 a day how much everybody wants to know right? So we went ahead and tried to break it down in the simplest form possible and show you how you must use risk management tools and Rules in order to get to that number all right properly without blowing your account Okay, so let me get my face out the way and let's jump right into this So how much money do you need to make? $100 a day trading So the first thing is we're reverse engineering using risk management rules, right? so the first thing on risk management that that the most important thing one of the most important rules for us is Basically position size right so for position sizing we have what's called the 5% rule Never risk more than 5% on any one trade But that's the max. That's the high end of it So that's the risk the riskier the high risk end of it, right? So ideally you want to be in the 1% the 2% range per trade So you anytime you're in a trade the most you want to ever risk in one trade is 1% to 2% All right 5% is the rule and it is a max But ideally the the majority of your trades should be made within the 1% to 2% If if you're very confident about a trade 3% is is cool and it's fine to have that But what getting into 4 to 5% that should be less than probably 5% of your trades should be in the 4 to 5% risk range All right, so So now that we know our position size and our position our 5% rule now. What's next? Risk reward, right? So the minimum risk reward on any trade should be 2 to 1 or 1 to 2 however you want to say it So if your if your reward is $100 in a winning trade your risk should never ever Be your risk should be a max. I'm sorry of $50, right? So your risk should never ever be more than $50 when using this risk reward rule You only need to be right 33% of the time to be a break-even trader All right guys if you follow this risk reward rule You only need to be right a third of the time and you're still a break You're still break-even trader. So if you're right more than 33% of the time Guess what? You're now a profitable trader So if you're right 50% of the time using this method on a hundred total trades You will profit $2,500 per 100 trades if your your reward is $100 and your risk is $50 That's just to give you an example and to break this down even further All right a 1 to 2 risk reward, right? So my our risk is $50 our reward is $100 So if we're losing and on a losing trade what we're risking is $50 on a winning trade What we're winning is $100 So per 100 trades are going to be just to make everything simple Every every every example here is going to be is going to be per 100 trades. All right So if you have a 33% success rate You're a break-even trader if you have a 50% success rate You're now talking about you're making $2,500 profit per 100 trades If you have 55% success rate You're making thirty two hundred and fifty dollars profit per 100 trades if you have a 60% success rate now you're talking about four thousand dollars profit per 100 trades guys so in our In our trading rooms for example, we're at we we averaged in 2019 around 70% success rate And we're around the same number The same numbers this year. We're at around 70% success rate so at a 70% success rate, I didn't do it here, but Yeah, you're making a shit a shit ton of money per 100 trades and you're you're very very profitable at that point So what is our average take profit per trade, right? So so when we're breaking this down We have to figure out where we're taking profit and what our average is right? So that just because we need we need to know a number so that we can figure out everything else If we don't know these numbers if we don't know our numbers then we can't figure these things out So on average when I'm taking my trades in and in the thousands of trades I've taken over the the years that I've been trading on average I'm usually taking profits around 25 percent to 50 percent, right? So this is just from my personal experience. You can change these numbers, you know depending on how you trade How you're at what your average is, but on my personal experience my that the I'm usually taking profits between 25 to 50 percent on average now everything's situational and trading you must remember that I'm always a Lot of times I'm either cutting trades if I no longer like them or if once it's in profit I'll set the stop loss or the trail stop up to break even so I'll do a lot of things To make sure that I'm not lose. I'm not taking losing trades, right? But let's just say on average 25 to 50 percent So let's just say the middle of that right the middle of 25 to 50 is gonna be 40 percent So 40 percent in this example and just to get these numbers right will be our target per trade Okay, so 40 percent is a magic number. We're looking for and because we're using our risk reward of 2 to 1 or 1 to 2 1 1 we're risking $1 to make $2, right? So if our profit target is 40 percent on a winning trade, then on a losing trade We will be at 20% and will be our stop loss So 20% loss will be our stop loss per trade So if if we're in a trade and we're at 20 percent Right loss. We're down 20 percent. We're cutting that trade And if when we hit 40 percent, we're taking profits So just to be black and white remember trading is not black and white But just for this example and for the purposes of this tutorial I am going to try to make it as simple as possible and as black and white as possible just for the purposes of this, okay? So if 40 percent is our average target, how much are we actually or how much are we risking for that so that that 40 percent equals $100 profit So I did the math here and to fit 250 dollars times 40 percent equals a hundred dollars so if our position size Equals $250 and we make 40 percent profit on those $250 We just earned $100 profit on that one trade, right? So the fight now now remember we're reverse engineering this so the 5% rule if 5% is $250 that means 5,000 times 5% equals 250 so now we understand by going over through all these rules and reverse engineering this that the minimum Capital we need to have in order to hit that hundred dollars per trade is $5,000 we have come to this by reverse engineering it right And we're reverse engineering it from a risk management standpoint because we want to always be practicing proper risk management so 5,000 times 5% is 250 now remember 5,000 $5,000 capital is needed, but this is risking the top end of this 5% So this is very very high risk what happens with this it makes your account very very volatile So when you're winning you will be your vote your account will be moving real quick and when you're losing It's also moving real quick in the opposite direction So remember this is high risk So now if we if we want to be a little bit more conservative We still want to be kind of risky But we're still trying to be conservative How much money do we need in order to keep hitting these numbers, right? so 8,334 capital is what would be needed as In a medium risk, so that would be Using risking 3% of your capital per trade. So now this is a little bit of a safer option $8,334 It is $3,334 more than this one, but Now we have a lot more room and we're playing it a lot safer So now our risk of blowing our accounts drops immensely, right? And then of course if you want to be very very safe Then $10,000 capital is what's needed It will be the safest risk and in this example then you're only Risking 1% of your account per trade to make that hundred dollars So you're you're risking 1% of your capital and And you'll be able to hit this number So that's pretty much it guys Hold on so now I'm looking at this number and I'm saying you're risking 1% and it's not making sense to me Did I do the math wrong on this guys? Uh 10,000 Yeah, I did the math wrong in this guys. I knew it. I just looked at this and I was like wait, it doesn't make sense so I think The actual number here, so I'm trying to get the 1% number I believe is in it's 20 25 Yeah, so okay, so this changes things a lot So I made an error here guys. Apologize about that So for the safest right safest Safest risk where you're only risking 1% per trade $25,000 is actually what's needed here not 10,000 25,000 and for Cuz now I'm thinking Okay, so so the 8,000 is correct. It was just the the safest option here so All right, so the $5,000 Capital is needed if you're willing to risk 5% per trade This is not recommended But if you only have $5,000 to start with then you know you got to start with what you got so And also you can you don't have to aim for $100 per day. Remember that guys Now the next safest option is eight thousand three hundred and thirty four That's the capital that will be needed if you're only risking three percent, right? So three percent of this equals to fifty two fifty times forty percent equals a hundred dollars on a winning trade Now the last one is the one that I made a mistake on Whoops, I just knocked down my phone This is actually Twenty five thousand dollars capital is needed. It's the safest risk where you're only risking You're only risking at this point 1% of your capital which is 250 times 40% on a winning trade equals a hundred dollars, right? So that's pretty much it as far as that guy as far as that goes guys I Want to finish this by by telling you guys You don't have to like It's it's I'm trying to see how I can put this It's not easy to make a hundred dollars every single day, right? With trading trading is a roller coaster. So it's So trading you're basically going like this you're going up and down It's it's not a straight path up. So you're not just going to be doing a hundred dollars every single day hundred hundred hundred hundred like that's that's It's crazy to think that if you make a hundred dollars a day, right? And you're you're Trading let's say you're trading five days a week in this example Let's say you're in the stock market trading five days a week making a hundred dollars a day So that's a hundred times 20 you're talking about $2,000 You're you're making if you're if you have $5,000 you're making to you're almost you're almost making 50% you're talking about 40% Profit on your entire account and that's very difficult to do in a 30-day period that doesn't happen like that, right? You have to go on on a it's possible But you have to go on a string you have to go on a string of winners in order to get there You're not gonna be you're not gonna win every single day. There's gonna be losing days and losing weeks So my advice is to start on a weekly and monthly Set weekly and monthly goals of a percentage on your portfolio, you know and and build on that that's more realistic making 500 up making a hundred dollars every single day is not realistic It's not you're not gonna win every single day one day. You'll win a hundred dollars One day you're gonna lose a hundred dollars one day. You're gonna lose two hundred dollars one day You're gonna win three hundred all like it's it's gonna be just so up and down That it's not realistic to just be okay a hundred dollars a day. You can definitely aim for it But remember don't don't over trade just to try to get to those hundred dollars every single day It's basically what I'm trying to say Think of it more in a weekly standpoint like so So on a in a week you want to make five hundred dollars that week, right? So you're gonna be aiming for that week now, you know now You're not trying to over trade as much every single day to try to get to a hundred dollars Now you're just you're being a little bit more choosier with your trades because you know on that one day You don't have to make a hundred dollars. You still have all week And if you go to a monthly standpoint, all right, let's try to make $2,000 a month Then you know, you put out if you only have $5,000 you're trying to make $2,000 a month You're putting a lot of risk on yourself. You know, I mean that's a lot of pressure You're gonna take trades that you're not supposed to be trading So what I'm trying to say basically just slowly build it up guys, you know Be patient. It is a grind until you're over $25,000 It is a grind to be hitting these numbers consistently Without putting so much pressure on yourself and without over-treating. All right so So, yeah, so that's basically it guys. I just wanted to get this this out there Hopefully this helps you guys Hopefully, you know, it helped it Gives you a clear vision on where what you need in order to start in order to you know start building up that portfolio So for the question of the day We're gonna do today's question of the day is going to be Once it pops up as you guys know the question of the day every video We will have a random question about something in the video Question will always be in a random area of the video find a question and find the answer Post your answer in the comments for a chance to win a free month membership to our trading room winners will pick randomly Randomly once a video receives over 30 likes. So today's question of the day Let's do it About something here Okay, what is the 5% rule All right, that is a question of the day. What is a 5% rule guys? All right, that's basically it guys I hope you guys enjoyed this catch you on the next one. Peace and love