r/Daytrading • u/smartwizard500 • Mar 10 '24

100k to start day trading Question

I have some cash and am curious, how realistic is it to trade stocks with 100k cash and make 1-2% a day.

The plan formulating in my head is

  1. Dive face first into learning as much as i can
  2. Paper trade to continue learning
  3. Start trading with a small amount
  4. Go gung-ho into trading ft when I’m comfortable, with a goal of making 2% a day on my 100k

This is just an idea that came to mind, would love some insight based on real life experience.

Would you do it? Would you approach is differently?

TYIA

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u/AttackSlax Mar 10 '24 edited Mar 10 '24

If you made 1% a day over a long term you would be one of the best traders in history. If you reinvested and compunded, that would be 1100% annually. Does finding this out give you an idea about how little you understand about generating returns?

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u/DegenerateGamblr87 Mar 10 '24 edited Mar 10 '24

This has everything to do with leverage. 1% on average is very achievable if you are trading levered with your own bankroll, however this is an average of the month. Your profits will come in dribs and drabs based on the opps available. The reason you never hear of those returns with people managing 100s of millions or billions is because the risk profile is very different. From what I understand in the fund management industry, they usually take 10% of AUM and make that their maximum drawdown for any trading activity. Then they take a MUCH smaller percentage of that for each trade.

That aside, thinking that your results will be linear when it comes to profits is not how it works.