These days, trading has become a fashion that everyone wants to try at any cost. People think they can become millionaires if they start trading. Day-trading is over-highlighted and people think that they can make 1 percent a day trading. It is very common among beginners to dream these things.
However, advanced users know the realities because they mostly fail even having years of experience. Expecting this much from a volatile market environment is silly, but it happens naturally. This blog post is to guide you on how to make 1 percent a day trading. Let’s discuss whether it can be achieved or not, and what are the limitations.
It is a fact that it is not possible to make 1 percent a day trading as it is very unusual and impossible. It is because the market situation changes every second and thus it is not possible to get equal profit every day. Some day you lose money, and someday you make money.
Is it possible to make 1 percent a day trading?
Maybe you fulfilled the target one day, but what is the long-term outcome? Do you know that 1 percent a day for 30 days means that you are making 34% profit per month? Hence, if you invest again same amount daily, your profit multiplies at the same speed. Remember, risk tradings are not this fruitful and don’t get you consistent returns.
What is the least profit percentage you can expect?
Most of the day traders cannot make 50% profit annually. It is a bitter reality as you must understand that forex trading is risky. It is possible to yield high returns annually, but you cannot expect this to happen consistently.
THIS IS THE THING, I AM MENTIONING AGAIN AND AGAIN!!!
However, if you are good at algorithmic trading, it is possible to yield high returns and maintain the profit ratio in the long term. When you are doing swing trading, you should be satisfied with what you get – let it be fifteen to thirty percent on average.
Okay… Let’s suppose that you yield 0.15% a day. Do this indicate that you can make this consistently and that your portfolio will grow every day?
Well, unfortunately, NO! It is not possible either way. ROI differs based on so many factors and you cannot make a quick analysis of what will be the concluding balance. It may happen that you make a very high profit in a few minutes, and sometime it takes you 2 to 3 days to even make a small profit. The most common circumstance is that you have to wait longer to make profits.
So, don’t run after making 0.15% or 1% a day as they are unrealistic trading goals, that will drive you crazy on failures. Let’s be positive and expect at least – enough profits.
Related Post: Day trading with 100k: What is the expect ROI?
Learn to maximize ROI!
Now that you are aware that it is hard to produce great outcomes every single day, so, lets focus on how to increase your odds of regularly making money on an annual basis. Since most states base their taxation on annual income, yearly returns tend to be the most important. Let’s read through the tips to maximize ROI.
Use multiple trading strategies.
Contrary to what many novice traders think, there is no such thing as an ideal trading plan that will always work. Spreading your risk over many trading techniques is a good idea because all trading strategies ultimately fail.
Moreover, if you use trading strategies logically, failing ratios are minimum. It suggests that you will get more equally distributed returns, also, it may higher the position size to yield high ROI.
So, to become successful in trading, you must trade as many as a hundred trading techniques at a time. You should also try algorithmic trading.
Diversify your portfolio.
It may not be directly proportional to trading, but it is somehow useful for counting on making big profits.
If your portfolio consists of stocks, you should include some different stocks in different market sectors. This strategy will help you when one of your stocks is in crisis, at least, others will pay you off.
You should not ignore the worth of a diversified portfolio especially when it starts to resemble an index fund, to some extent. Better stability may result from this, but it also makes it very difficult to outperform the market. You are essentially creating your own miniature index fund!
As told earlier, you cannot make 1 percent a day trading. Don’t panic and accept the ground realities – no one can make an annual ROI of 1000% or more. Comparatively, you can set the goal of 0.15% per day. It adds up to over fifty percent annually – A great profit ratio! So, you may double the trading account in nearly two years, and in the long term, you can expect more high ROI.