Making one percent a day trading is not as simple as what people would expect. It is not simple because if you look at the best traders in the world, they may only make less in the long run.
The best traders have an average performance of about 10 to 20 percent per year for 20 or more years.
Dividing their annual trading performance by 252 days (average trading days in a year) is only about 0.08% per day.
If making 1 percent per day, on $1,000,000 account is possible, one can be a billionaire in 8 years.
It goes against the natural order of things which is hard work. Isn’t it strange, instead of trading, most trading gurus teach?
They let people sign-up on their trading courses to make money, and they are selling people’s dreams.
One should imagine leaving a job that is paying about $100,000 a year to trade stock because of trading.
It is practically insane.
How much does a trader need to make $10,000 a month?
It is simple. An average trader that makes 10% a year needs $1,200,000 capital to make $10,000 a month ($10,000 x 12mo.s /10% = amount of capital needed).
However, can one really replicate the performance of the greatest traders?
Most traders cannot even increase their profit to five percent per month.
Many people will not like this post, and most trading gurus will not also love it.
Johndeo was fortunate enough to learn this reality early in his trading career. Thanks to his mentor, he did not end up similar with unfortunate traders.
Paul Tudor Jones
Paul Tudor Jones is one of the most successful traders. As of today, his net worth is around $3 billion.
According to the New York Times, his long-term annual returns is about 19.5%. (source)
Even great traders cannot increase their profits to 1 percent per day or 252 percent per year.
One of his favorite rule in trading is don’t be a hero, because the second someone did it, he is dead.
Trading heroes die early in the trading game, because they usually use the highest leverage.
They will break their trading account by having too much risk, and their trading strategy is not really profitable.
He often also said that playing defense is the most important rule in trading.
Paul Tudor Jones is not an ordinary guy, and he has all the technologies that he needs in his trading.
His average daily trading performance is still below 1%. What can one infer?
Comparing a retail trader to him, do you think there is a chance of beating Paul?
One should understand that their belief that trading is easy is completely wrong.
He should accept that trading is really difficult.
Of course, sometimes, some traders might earn more than 1,000% in a year, yet they can’t consistently do it in the long run.
They are the outliers, and they are rare in the trading industry if they actually exist.
Long-term performance is more important than short-term performance in trading, for it is what makes a trader profitable or not.
People should validate what they read or see online to protect themselves. They should be cautious when watching videos specially in YouTube.
They should ask themselves if these trading gurus are profitable, why are they selling courses.
Why would they share their techniques? On the web, most trading courses are usually just selling a dream.
Patrick Boyle, a hedge fund manager, breaks down the truth about trading gurus.
He actually understands trading, and he believes that it is difficult to make money in stocks.
He also said that if people can make 2% a day, their $100 could be 16 times richer than the wealthiest guys in the world.
Why would a good trader share his trading strategy to the public if his making that much money?
Thus, people should not believe those gurus who are just actually internet marketers.
Gurus are selling people’s dreams, and they are making their money from their subscribers.
Watch the part when he said that even great traders cannot even make what gurus are claiming.
Patrick also said that finding a great trading strategies requires hard work. Why would anyone share it?
One should not believe someone who shares trading strategies for a fee.
Real professional traders will mentor their students, yet it is without costs. However, it is hard to reach out to them.
Because trading secrets are rarely passed on to other people, some people are going take advantage of the opportunities to get money from others.
It is how the public becomes the victim of false day trading expectations.
Most people are lured into believing that their trading performance can reach one percent per day for a long period of time.
In fact, it is unachievable.
George Soros founded Soros Fund Management, LLC in 1969, a former hedge fund. The fund was reported to have an average of 20% annual return. (source)
He is said to be the man who broke the Bank of England, yet his average annual return is only two times the normal market return (approximately 10% per year).
No one can really make 1 percent return a day trading for a long time. It just goes against the normal order of things.
Even great traders cannot consistently maintain their average annual returns.
People should study the best traders in world, and they should check or track trading records to make their own conclusions.
Traders should realize that making money in the stock market is not easy. They should focus more on profitable strategies and risk management, and should forget about making 1 percent per day.