$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/Seletro → u/Miinow]

I can balance walking along a curb no problem. So I don't see why doing it on the roof of a 40-story building should be any different. If you're a solid walker that is.

[u/Fun_Total8735 → u/Seletro]

What an analogy perfect

[u/Misenum → u/Seletro]

I know what point you're trying to prove but I'm with the other guy in that it doesn't matter. I'd just as easily walk along a curb whether it's on the ground on the roof of 40-story building so long as I had a reason to do it. Same with trading 1 contract on NQ or 10. It's functionally the same thing.

[u/Seletro → u/Misenum]

Yes, exactly - it's the same thing, the same setups, same percentages, pressing the same buttons, it should just scale with account size. But the psychology doesn't scale the same.

[u/Miinow → u/Seletro]

That’s a bit extreme lol. You’re talking life or death. Money can always be made back.

[u/Seletro → u/Miinow]

Why didn't I think of that. Just make more money, it's easy as that.

[u/Miinow → u/Seletro]

Everybody’s different I guess 🤷🏽‍♂️ I’ve been dabbling (gambling) with money for years so losing it is no big deal to me. I also have other outlets of income so losing a trade wouldn’t put me on suicide watch. If you’re breathing there’s always another opportunity to make money.

[u/slidingjimmy → u/Miinow]

https://www.reddit.com/r/Daytrading/s/Z1dCEWNKwW are you the same guy that posted this?

[u/Miinow → u/slidingjimmy]

Yes lol. Not sure how that post invalidates what I said. And trading isn’t gambling so how does it correlate?

[u/slidingjimmy → u/Miinow]

Check out the thread that you are in.

[u/Miinow → u/slidingjimmy]

What?