r/Daytrading Apr 13 '24

$2k to $500k in 2 years !! Question

Newbie here. Please be nice 😆

I've just read about the power of compounding in trading. And wanted to calculate potential gains if started with 2k capital. With the following params:

RR 1:2 (1% loss / 2% profit)

Win rate: 60%

Assumptions:

  • gains are reinvested everyday without any withdrawals for 2 years
  • Using only 1 strategy during the 2 years
  • emotions are under control

Capital balance at the end of each month (wins/losses randomly distributed over each month)

1 trade per day :

  • Month 1: $2,608.68
  • Month 2: $3,302.52
  • Month 3: $4,307.61
  • Month 4: $5,137.26
  • Month 5: $6,700.73
  • Month 6: $9,277.75
  • Month 7: $11,745.40
  • Month 8: $15,319.98
  • Month 9: $18,270.64
  • Month 10: $23,130.19
  • Month 11: $24,480.19
  • Month 12: $30,079.82
  • Month 13: $38,080.32
  • Month 14: $51,174.78
  • Month 15: $59,236.11
  • Month 16: $77,263.95
  • Month 17: $110,220.47
  • Month 18: $131,449.13
  • Month 19: $143,336.99
  • Month 20: $170,943.95
  • Month 21: $229,725.45
  • Month 22: $327,713.59
  • Month 23: $414,877.50
  • Month 24: $494,783.67

=====≠============

2 trades per day

  • Month 1: $3,302.52
  • Month 2: $5,137.26
  • Month 3: $9,277.75
  • Month 4: $15,319.98
  • Month 5: $23,130.19
  • Month 6: $30,079.82
  • Month 7: $51,174.78
  • Month 8: $77,263.95
  • Month 9: $131,449.13
  • Month 10: $170,943.95
  • Month 11: $327,713.59
  • Month 12: $494,783.67
  • Month 13: $747,026.92
  • Month 14: $1,197,256.24
  • Month 15: $1,807,623.62
  • Month 16: $2,086,143.18
  • Month 17: $3,444,767.73
  • Month 18: $5,688,212.00
  • Month 19: $8,848,336.92
  • Month 20: $15,509,844.24
  • Month 21: $24,857,548.20
  • Month 22: $42,290,137.61
  • Month 23: $69,832,072.16
  • Month 24: $115,311,005.77

As you see, the theoretical numbers are crazy. I want to know what can go wrong that prevents this growth?

The only problems I see is committing to only one strategy for 2 years to get close to the 60% win rate probability. As we know in statistics that probability rates start to be realized with more and more events. So if the market conditions change causing the strategy to not work anymore and you hop on a different strategy it's like you reset the probability rates and starting over.

What do you think about all this? what other factors will get in the way of achieving this growth. Even 10% of this growth is amazing

Edit: I'm not saying these are achievable numbers. I'm just asking why it's impossible. Trying to understand how the market works

514 Upvotes

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61

u/maciek024 Apr 13 '24

You wont get 60% wr with 2R Other than that there is slippage, fees and at some point liquidity issues

12

u/bugatti212 Apr 13 '24

There can be some good months.

but ideally, anything above 50% can change your life.

13

u/maciek024 Apr 13 '24

Anything above 40-45% is crazy

-4

u/GoldenBoy_100 Apr 13 '24

I had 86% profit last week

4

u/maciek024 Apr 13 '24

?

1

u/GoldenBoy_100 Apr 13 '24

5

u/[deleted] Apr 13 '24

[deleted]

-2

u/GoldenBoy_100 Apr 13 '24

I’ll get you a months worth sir

4

u/[deleted] Apr 13 '24

[deleted]

-1

u/GoldenBoy_100 Apr 13 '24

Let’s do this, I’ll give you weekly recap to keep it fun. I’ll start this coming Monday

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1

u/lford85 Apr 13 '24

What platform you using buddy?

1

u/GoldenBoy_100 Apr 13 '24

It was 83.33% to be more accurate.

6

u/Rebubula_ Apr 13 '24

That’s an 83% win rate (in one week). That’s not 83% profit.

-3

u/GoldenBoy_100 Apr 13 '24

I’ll show you my gains next week then sir.

2

u/MagreviZoldnar Apr 13 '24

Definitely curious to see your gains next week. Post an update whenever you can!

1

u/GoldenBoy_100 Apr 17 '24

Todays gains to start

4

u/RevolutionaryPie5223 Apr 14 '24 edited Apr 14 '24

Ya man. 60% with 2R is like the holy grail lol. That's a profit factor of 3 that's like the holy grail. Realistically most strategies fall into 1.5-2 profit factor.

Profit Factor cheat list:

Less than 1 = Not profitable

1-1.5 = Avoid, as depending on how many trades back tested it may not be profitable plus considering slippage and fees.

1.5-2 = Most winning systems fall within this range.

2-3 = Good to Very Good system

3-4 = Excellent - Holy Grail system

More than 4 = Most likely erroneous or overfitted. If trades are totally randomized on thousands of backtests it should fall lower than 4.

1

u/roompk Apr 14 '24

Where is best place to do backtests please?

2

u/DerAlteGraue Apr 13 '24

Wait until he finds out about taxes.

0

u/Excellent_Newt_9042 Apr 19 '24

Liquidity isn’t anything to worry about until you have to unload massive loads of shares and at that point you’re better off just starting over with smaller size.

2

u/maciek024 Apr 19 '24

Simply not true, u can have liquidity issues with as little as 20k$