Making $2000 per month from $20,000???

[seals139]

How realistic is that with a good broker?
seals139

 

[wayneL]

How realistic is that with a good broker?
seals139

Possible, but not much to do with the broker. It's the trader who matters.

But as an exersize, with $20k you could trade futures, but for money management reasons you shouldn't trade more than 1 or 2 contracts.

If you traded eminis (or you could trade SPI) and you averaged 2 pts per day profit per contract, that would be your $2000 per month...and that's USD.... per contract.

Sounds simple, and it is. But it ain't easy and most blow up an account or two before getting it right.... if your psychology survives. Tenacity is needed.

Cheers

 

[wayneL]

PS

I am definately NOT recommending this course of action, just showing what's possible.

 

[happytrader]

How realistic is that with a good broker?
seals139

Hi Seals 139

Just wondering what your idea of a good broker is?

Cheers
Happytrader

 

[nizar]

Possible, but not much to do with the broker. It's the trader who matters.

These threads are typical when we are in a bull-market, as we are in currently...

Tend to agree with Wayne, those returns are possible, but depends how pro u are....

I'v personally made $1G+ per week for the last few weeks playing with less than that... but sustainability is the hard part... markets can turn on you at any time...

 

[tech/a]

120% a year.

Reckon a broker who can do that would have his house/s mortgaged to the hilt at 7% and the proceeds margined at around 2xs or be trading CFD's at 10x living on his own island.

My first thought was---how many months?
2nd thought was---do people honestly believe that there are people out there that can consistently turn $20k into $42K a year working for a wage of $70K a year?
3rd thought.
Find one of these people pay them $70K and give them $200k,tell them to look after the house and take out their wages,give them the sat phone number and see you in 12 mths.

 

[professor_frink]

I've done it before trading options but it's the exception, not the rule.
I did it in january and march this year so far , but these aren't exactly average conditions, so I'm not expecting to do it every month!

 

[Broadside]

unsustainable long term - possible short term by taking big risks, it is risk/reward always has been...10% per month means big big risk and it may happen for a month or two before the risk bites you and you get wiped out.

$2000 a month from $100,000 is getting more realistic I reckon.

 

[bullmarket]

totally agree with you Broadside

unsustainable long term - possible short term by taking big risks, it is risk/reward always has been...10% per month means big big risk and it may happen for a month or two before the risk bites you and you get wiped out.

$2000 a month from $100,000 is getting more realistic I reckon.

with risk/reward - I always say to others:

higher risk = potential higher reward

and not necessarily actual higher reward.

seals139: my view is that if making huge profits from trading was easy then everybody would be sitting at home punching in buy/sell orders all day. Sure, a minority of traders probably do but remember that anecdotal evidence suggests that less than 10% of traders are profitable, at least to any significant extent, in the long run.

hope this helps..

bullmarket

 

[tech/a]

it is risk/reward always has been...10% per month means big big risk and it may happen for a month or two before the risk bites you and you get wiped out.

Just interested in how you are equating 10% return / mth as a 10% risk / month?

with risk/reward - I always say to others:

higher risk = potential higher reward

and not necessarily actual higher reward.

How have you equated risk in the request?
Where is there evidence that the poster intends to take on high risk?

How on earth do you equate higher risk to "potentially" higher reward?

 

[professor_frink]

Just interested in how you are equating 10% return / mth as a 10% risk / month?



How have you equated risk in the request?
Where is there evidence that the poster intends to take on high risk?

How on earth do you equate higher risk to "potentially" higher reward?

Good point tech. my maximum risk for last month was 5% of my account( and it would have taken a pretty large correction for that to happen) and my account moved up by well over 10%.

 

[Broadside]

my point is to chase a return of that size massive risks must be taken....the higher the potential return the higher the risk that must be taken, seems pretty straightforward to me

 

[bullmarket]

I didn't say he/she intended to take on higher risk

I simply posted what I say to others when it comes up in conversation

If you don't agree with or accept the risk/reward thing then that is fine by me.

How I determine the risk/reward for my investments is a personal thing and I assume the various ways of determining risk and reward should have been covered in the RISK thread.

cheers

bullmarket

 

[Broadside]

tech/a I never equated 10% return a month as 10% risk not sure what makes you think I have.....to chase a return of this size I said big big risks would need to be taken...where are you coming from?

 

[professor_frink]

think tech was refering to bullmarket. High return doesn't always equate with a super high risk- sometimes yes but alot of times you can get good returns with a quite acceptable level of risk.

 

[tech/a]

tech/a I never equated 10% return a month as 10% risk not sure what makes you think I have.....to chase a return of this size I said big big risks would need to be taken...where are you coming from?

Why do you think that?
You can certainly trade small initial capital without taking big big as you put it risk or Unacceptable risk.

I do agree that using a larger capital base makes a $2000 a month return easier from the point of view of required return on investment.

But smaller capital bases need not equate to the necessity of taking on a higher risk to achieve a return.
You'd only be able to trade one or two stocks at a time (Max--one is preferable) and youd need to be right on top of any adverse move below initial purchase price.
Youd need very cheap brokerage.
But it can be done. Hell even I have done it this month all be it with $30k and so far $7000.My max risk is 1-2% and I get it wrong often.

So where am I coming from?
Why do you think big big risks need to be taken to gain a 10%+ return / mth on initial capital.
Just interested in why you and Bullmarket think that?

 

[Broadside]

because it is a tried and true rule of thumb to chase higher potential returns you need to take higher risks....I wouldn't advocate to a newbie taking punts on one or two stocks at a time even with tight stop losses you can get caught out...each to their own the risk/reward equation holds for me

 

[professor_frink]

because it is a tried and true rule of thumb to chase higher potential returns you need to take higher risks....I wouldn't advocate to a newbie taking punts on one or two stocks at a time even with tight stop losses you can get caught out...each to their own the risk/reward equation holds for me

broadside I'd be more inclined to say that the rule of thumb you are refering to is mainly used by financial planners, and is often followed by the phrase- don't take high risks doing it by yourself, give your money to me and I will manage it for you.

 

[bullmarket]

Hi tech/a

re your :

Why do you think big big risks need to be taken to gain a 10%+ return / mth on initial capital.
Just interested in why you and Bullmarket think that?

If you look back and read more closely what I actually posted you will see that I referred to higher risk and not big risk because big/small/low or whatever are all relative terms and what might be a small risk for one might be a big risk for another....it's as simple as that.

I would have thought that all this should have been covered in the RISK thread and so I'm not going to re-hash what might have been said in there.

see you in the soup

bullmarket

 

[Broadside]

I wouldn't agree but that's fine....let's get back to the original question from what I assume is a newbie investor? is it realistic to achieve this return? no it isn't, even a "good" broker won't always have good tips