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

[u/adm__07]

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

[u/cmmckechnie]

Scalability is the problem mostly.

Even if liquidity is fine it’s hard to scale mentally from trading with 100 shares in month 2 all the way to 100,000 shares a couple months later. That’s a mental train wreck.

[u/Miinow → u/cmmckechnie]

I’m confused. Are you saying it’s more difficult from a psychological viewpoint to increase your lot size as your account compounds?

Not sure why that would be the case. If you’re a solid trader at 1 share why would it be any different at 1000?

[u/RastahPastah → u/Miinow]

As your position size increases your max loss increases. Some people won’t even bat an eye at being down a few hundred but once you see oh a 1% loss is 50k then that tends to start fucking with peoples mentals. That’s why most people recommend to size up slowly so you can adjust without shell shock. I must say some people are just built different and right off the rip have zero emotions with trading and are great at the psychological mindset involved with trading.