I used to face this question from my friends quite often. OK, how much one can earn from the markets?.
This is my concept from my own experience.
Let us consider 10 friends enters into market for investment. Most of us enter into markets from investment perspective and later switched to trading.
First round - In the first 1 or max 2 years, they lose all their 80-100% capital. 5 out of 10 friends do not return to markets again.
Second round - 5 friends return to markets with reloaded capital. Capital swings + /- 40-50% for next 1 or 2 year and finally almost 75-100% capital is lost. 4 friends take back the left out small capital and say goodbye and never return to markets.
Third round - Only one remaining person stops trading for a while after 2-3 loss making years. He analyses his past trading carrier and decides about future. He lay plans and enters with additional capital (mostly borrowed) for the final innings. He always remember his past wounds and accidents freshly in mind and plans his travel very cautiously. Very rarely people go wrong in the third round of trading.
If someone who cannot survive in the market even in the third round, trading is not for him and he misconceived that his passion lies in the markets which is wrong. He should stay away from the markets.
If a person can survive at least for a year in the third round, then he is capable to stay in the market for long time.
Ok, how much he can earn. After passing 3-4 years i.e, surviving after all the three rounds, one must be having a rule book of his own to approach markets. This rule book is obviously from his good and bad experiences. This will help him for sure in any kind of circumstances. If he has a discipline to follow his own rule book, he can earn peacefully at least 50-100% returns per year.
Yes. This is possible for sure. If a trader is in the market for more than 3-4 years and if he can't still make 50-100% returns in a year, then he should stop trading and think proactively to change his approach.
This is my concept from my own experience.
Let us consider 10 friends enters into market for investment. Most of us enter into markets from investment perspective and later switched to trading.
First round - In the first 1 or max 2 years, they lose all their 80-100% capital. 5 out of 10 friends do not return to markets again.
Second round - 5 friends return to markets with reloaded capital. Capital swings + /- 40-50% for next 1 or 2 year and finally almost 75-100% capital is lost. 4 friends take back the left out small capital and say goodbye and never return to markets.
Third round - Only one remaining person stops trading for a while after 2-3 loss making years. He analyses his past trading carrier and decides about future. He lay plans and enters with additional capital (mostly borrowed) for the final innings. He always remember his past wounds and accidents freshly in mind and plans his travel very cautiously. Very rarely people go wrong in the third round of trading.
If someone who cannot survive in the market even in the third round, trading is not for him and he misconceived that his passion lies in the markets which is wrong. He should stay away from the markets.
If a person can survive at least for a year in the third round, then he is capable to stay in the market for long time.
Ok, how much he can earn. After passing 3-4 years i.e, surviving after all the three rounds, one must be having a rule book of his own to approach markets. This rule book is obviously from his good and bad experiences. This will help him for sure in any kind of circumstances. If he has a discipline to follow his own rule book, he can earn peacefully at least 50-100% returns per year.
Yes. This is possible for sure. If a trader is in the market for more than 3-4 years and if he can't still make 50-100% returns in a year, then he should stop trading and think proactively to change his approach.
12 comments:
yeah, this another good post from you.
pruning the mistakes and honing working decisions makes a better trader who will make lesser mistakes and better decisions.
End result would be more adds to less subtractions, making the flow positive.
Who remains till then is well said by you.
There is no perfection, only lesser complication and more working decisions ... that makes good at the end.
Have a good season!
right moh..kind of self analysis too :)
AZ,
link added ...
:)
Good one assortZ! I always suspected that there was more money to be made in the markets than the 20% most people claimed as a benchmark!
Thanks for your continued efforts to improve the lot of your friends. :)
assortZ,
good one and really happy to see the growth. Progress card shows the result of hardwork and dedication. Keep it up and best wishes for successful journey.
RM,
Your suspect is right.. you will realise yourself in 2012 :)
Sri,
Thanks :)
wow az,
u started a blog.
pls give email subscription so i can follow ur educative posts.
there is some problem in my blogger account blogs i follow sometimes appear sometimes disappear.
Hi PS,
Its just a kind of personal page where i keep saving my simple notes. That's why not promoted this among all.. :)
email subscription - done.
How is trading life?
oh az ,
u did it so fast . i thought i missed and it was there. i just activated it and then read ur comment.
trading is so so. losing large part of winnings in trading range.
need to work seriously on it .
problem is i dont know how...
PS,
// losing large part of winnings in trading range.
need to work seriously on it .
problem is i dont know how //
That is sad part of any SAR system.. we can’t catch either top or bottm and also has to sacrifice most of the profits before or after a huge move.. no other way, one has run with it for a long time may be 2-3 years to get decent returns and I personally believe it is achievable.
Merry Xmas, assortz & family,
have a happy weekend.
regards,
mo h
thanks moh..Wishing you the same
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