What returns can you expect from trading?

Most people expect to make a lot of money very quickly from trading, the reality is that trading is all about slow and steady growth. If you think about it, if you can make a 50% growth on your account in one day; you can lose 50% of your account another day. So, the aim would be to make small but steady gains to ensure that you protect your capital.
Even though that amount seems small if you look at it per day, you must remember that trading is all about compounding growth and therefore we would have to look at the returns to expect after about 3 months of trading.

If you trade consistently and manage to average about 1% of account growth per day using a R20 000 account, it will equate to R200 per day. Of course, some days will be winning days, and some will be losing days. We also must remember that some days you will make more than your expected target and some days you will make larger losses. But as long as we can maintain an average of 1% growth per day, we will make 60% account growth (R12 000) in 3 months. And it all compounds from there on out, as your account gets larger so do your profits.

How many trades do you need to make to hit your 1% – 2% daily target?

Position sizing is important, so its always better to trade a little bit smaller not only to protect your capital but to alleviate any fear or anxiety you may have when trading. Suppose you are trading at a size of R5.00 per point on a R20 000 account, you would need to make 6 trades targeting 10 points per trade (4 winners and 2 losers) to hit your target. You can do this by implementing a strategy with a 70% hit rate that focuses on scalping the market.

Making 6 trades in a trading session only chasing 10 points per trade can be super easy depending on the market conditions and the strategy we use. We on average aim for 20 – 30 trades per afternoon with combining our strategies, so it is relatively easy for us to get 6 trades in an afternoon.

Where can I find a strategy with a hit rate of 70% +?

We have a wide range of strategies not only for scalpers but also for day traders and longer term traders, all with hit rates of 70% +. If you would like to learn more then sign up for our FREE Thursday Night Workshop, where we will teach you 2 of our strategies and cover some trading psychology as well.

https://www.thesystemstraders.com/free-workshop-thursday-nights/

What to do when I’m suffering from trading euphoria?

Definition:
Trading euphoria is defined as a phase when making money becomes very easy. The perception is that only good things lie ahead. It is usually a result of consecutive winning trades which result in a feeling that “I am the God of the market and cannot get it wrong”.

There are only two ways to “blow an account”, either the stop loss levels are ignored or the position size is too large relative to the account capital.
>When traders have many consecutive wins in a row they tend to get a feeling that they know how to trade and they cannot get it wrong, it is at this point that there is a temptation to increase their risk by increasing their position sizes in order to make larger profits per trade. Murphy’s law will suggest that it is the next trade that the market will bring us back to earth.

Having a feeling of euphoria will also result in the feeling that we don’t get it wrong, so “ it’s ok” to ignore stop loss levels or traders will tell themselves that they cannot afford the loss so they will hope and pray that the market will turn and move in their favour.
>“If you stare at the screen for long enough you will see what you want to see”.
>It is our experience that it is not necessarily bad trading that results in big losses, but rather the feeling “that I am the God of the market” that results in the losses.

How do we overcome this feeling of trading euphoria?

• Manage the risk by asking us for our position size calculator. This will allow you to increase or decrease your position size after every trade according to your performance. A winning trade allows the next trade to be larger and a losing trade will result in the next trade being smaller. This is an excellent way to control your risk allowing you to stick to a fixed set of money management rules.
• It’s difficult to stop trading after a number of consecutive wins but sometimes necessary. As soon as you get this feeling that you are indestructible and you are tempted to break your rules, walk away, take a break, and come back when you feel you are more emotionally equipped to stick to your trading rules.
Hope this helps.

BLACK FRIDAY SPECIAL:

From today until Monday, 2 December 2024; we will be running a special for:
The Foundation To Successful Trading (Module 1)
Trading the DOW & USTEC (NASDAQ) Intraday using one- and five-minute trading systems (Module 2)
Trading Using The Stochastic Oscillator (Module 3)
Trading The JSE-All Share Index (ALSI), Gold & The German (DAX) Markets (Module 4)

The combined cost of all these modules is usually R14 997, for the month of November only it is priced at R7999.

For a detailed breakdown on what you can expect to receive from these modules, you can read the doc below:

https://drive.google.com/file/d/1hQeD-POCa_eZP-1C00hZG7jSAqtt_CMI/view?usp=sharing