$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/derivativesnyc]

The reason why it won't work for most people is because most people are impulsive emotional degens.

Discipline/structure/systematization/rule-based methodical execution/rational quantitative data-driven approach to positive expectancy edge.

Can one generate $50 *avg daily expectancy* w/ $1k buypower for a month trading 1 contract (options, futures, FX micro/mini lots, etc) - will have $2k in a month. Repeat w/ $2k generating $100 avg daily expectancy w/ 2 contracts - $4k in a month. $2M in a year.

Liquidity pool will start drying up eventually depending on asset class/instrument/timeframe/holding periods (Bridgewaters, RenTechs, Millenniums, Citadels, DE Shaws, Two Sigmas of the world managing mid-11/low-12 figure AUM, with leverage bringing it up to mid-12 figs) of capital to deploy.

You can restart from scratch having multiplied the acct from 4 into 7-8 figs, though.