This is possible if you are willing to control greed and trade less.
Regardless of your account balance… if you risk no more than 2% per trade and net 25 pips for the entire week… over the course of a calendar year this equates to over 100% annually. A return of 6% monthly is not too hard and it should be where most traders aim in their beginnings… not “how much money can I make everyday”… which is the industry standard expectation. lol
Here is a suggestion:
Take your 20K divide it into thirds… sit on 2/3 and this is your cushion… not your trade equity. The other 1/3 you use for trade equity… and look for 25-30 pips per week as a net average… if you make it on Monday… you’re off the rest of the week.
If you can do this… atleast for 3-6 months… you will be in the top 15% of traders… it is not an easy task since greed will invite you to trade more and overleverage as well. As you make more… the equity will allow more lots per trade but the % risk will remain the same despite the exponential growth the account can realize.
using a standard 30 pip stop loss one could see these results:
risking 2% per trade: 23 pips per week net annual +100% return on trade equity
risking 1.5% per trade: 30 pips per week net annual +100$ return on trade equity
risking 1% per trade: 45 pips per week net annual +100% return on trade equity
risking [U].[/U]5% per trade: 90 pips per week net annual +100% return on trade equity
In a business where such a vast amount of neophytes get taking to the slaughter… it stands to reason if one made 100% on 1/3 of their total account they would be among the minority as statistics suggest. Now you might say to yourself… that is not sexy… that’s not alluring enough… however, it is precisely how fund managers trade and use asset allocation and risk management. This translates to over 30% annual returns and you never risk more than a half of 1 percent of your total account balance… ever!
Recall while we are risking a maximum, in the examples above, 2% per trade… this is 2% on 1/3 of your total equity… which is a very low risk % and the weekly pip goals are relatively low and very much obtainable… even if you are new to trading, I might add. You simply need to develop the patience and control to stick to it and not deviate.
An annual return of 30+ % smashes most returns for stocks, funds and CD’s… as you learn more and develop as a trader… higher returns are likely and knowledge of the asset class will provide a foundation to provide more trading opportunities and higher returns on average.
Hope this helps!
GLGT