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If there is a secret formula to trading (besides dedicated learning and risk management), it's this:
SUCCESS = COMPOUND INTEREST + DISCIPLINE.
1% daily gain might sound small at first, but it adds up over time if you keep compounding the profits and growing your account.
For example, let's imagine that you deposit $1,000 in your account. And for the sake of simplicity let’s not include the use of leverage (which could make the movements up to 30X bigger in both directions) or the use of 1%-4% risk rules.
You would have to trade consistently to achieve such a result, which is not very realistic for most people.
But you can always increase your account size if you're doing good or you can use leverage to increase the effective trade sizes, so it's not impossible to reach and even beat this hypothetical target.
Theoretically, if you'd start with $30k, then the 1% daily compound interest could result in total earnings of more than $368k in a year.
However, if you are expecting much bigger and faster gains, you might put too much in a single trade and most likely quickly blow your account.
Even if you traded every day, aiming for 1% daily will never go smoothly, of course. You’ll have +3% days and -2% days, etc.
But! This approach provides a more structured and sustainable perspective to trading. It also gives you a target to strive for.
P.S. Intermediate level traders often make bigger gains at the beginning of a trading session when the markets are more active and then lose a big part or all their profits later in the day due to lower trading volume or overtrading.
Best traders try to hit their daily goal and then shut down their computers and go outside to clear their minds and reset for the next day.
Enjoy Trading!
