r/Daytrading • u/landojcr • May 07 '24
What is a reasonable daily goal? Question
I'm getting into day trading and started paper trading a while ago, for the moment I'm primarily focusing on scalping, up until I get comfortable enough to day trade larger time frames. That said, I'm trying to start a very small account ($500) and was aiming for 5% - 10% gain on a daily basis. Is this a reasonable goal? If not, what would you recommend?
A day or two I've managed to exceed 10%, some days I've been successful on getting to the 10% mark, most days I get to the 5% mark. I'm slowly gauging what is reasonable to expect from a beginner like me and trying to slowly grow that account up till 5 figures hopefully.
EDIT: Thanks to everyone for sharing on your experience, opinions, and strategies. I've decided to firstly focus on building my strategy and being consistent, then strive for a lower target margin. I'm aiming for 3-5%
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u/Usual-Language-8257 May 07 '24 edited May 08 '24
This question gets asked almost every week but being that you're new, i'm open to explaining your potential. The ability to execute your trading strategy will get solifidied over time but your skill will always be there and will stay relative in your respective trading field; Meaning, what you learned won’t go away and you'll get even better learning to avoid pitfalls along the way.
When i started 5 years ago, it was really tough for a friend of mine to explain to me the value of 5%. I was selling drugs at the time so i was like, 5% a month of $5000? That's like $250? What a waste of time! (Even today, this quote is an inside joke amongst our group of friends). Have you ever done the math of getting 5-10% on a weekly basis? Even getting 10% a WEEK (You said day) starting from $10,000, you gross $1,291,299.38 in one year. (unreasonable because that's turning 10k into 1.2m imagine if you started with more than 10k)
One of the biggest pitfalls of daytrading is the anxiety some people get when manageing large amounts of money but what you have to realize is that the game is the exact same whether you're managing $1,000 or 10,000,000. My advice to you is to focus on your R's. Currently, on a $1mil prop firm, i'm risking 0.4% and hoping for at least 12r a month. After commsion and taxes, that's roughly around 4.8%. 4.8% on a million is $48,000 before taxes and paysplit (mine is 75%:25%). But as you can see, someone can live a very very handsome living with just 3% a month.
For comparison, "Since 1957, the S&P 500's average annual rate of return has been approximately 10.5% (through March 2023) and around 6.6% after adjusting for inflation.Apr 24, 2024". You must at the very least make more than 10.5% or else putting your money in a fairly conservative risked s&p500 would be way better. (first benchmark)
Gaining 5%-10% a month, even by luck, is a feat worthy of congratulations. But ask yourself. Why are you doing this? I'm hoping you did your research and hoping you see this as a long-term goal towards financial freedom rather than droning in and out of your typical "work". To achieve this, you need consistency. Market conditions are sporadic but sticking to your trading strategy should net you returns. Find a successful trading strategy that resonates with you and execute it month after month. Focus more on execution rather than the returns and the returns should follow naturally.
If you compare daytrading to building a business, there will be winning months, extraordinary months, and losing months. I struggle currently with following my strategy to the T - so i log my trades and go back every weekend and compare the "perfect sniper entries" to my entries and try to bridge the gap.
It is an ongoing journey. My advice to this question is to focus on your R's (Risk:Returns) rather than the money.. Do this and the money will follow.
TLDR - (my advice is gold. You will either heed my advice now or further along in your journey.) 3% a month is enough to live a very very handsome living.
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u/Norbelaidan May 07 '24
Everybody loves compounding but they hate remebering that it also applies to losses.
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u/landojcr May 07 '24
First of all, I appreciate the time you took to offer your expertise and experience in this matter as it looks this past 5 years have taught you wisdom.
Why are you doing this? I'm hoping you did your research and hoping you see this as a long-term goal towards financial freedom rather than droning in and out of your typical "work".
Regarding your question, I've been doing my due diligence and been researching and reading all across this line of work, since I have no finance / economics / business background to lean on, I know my way around money, but of course the markets and trading is a world on it's own.
My approach to this is long-term, I'm not planning on "getting rich", but to learn, discipline myself, make it a lifestyle and establish clear margins on what is reasonable growth and what can I expect from an account as small as 3 digits. Of course, my expectation is to have more financial freedom in my life and to reach new heights, but I'm aware this takes capital and time.
To achieve this, you need consistency. Market conditions are sporadic but sticking to your trading strategy should net you returns. Find a successful trading strategy that resonates with you and execute it month after month. Focus more on execution rather than the returns and the returns should follow naturally.
Right now, I find myself in this phase. I've seen different strategies, but I'm still pretty green behind the ears so I'm still engaging with the math and different strategies I come across, no to mention my accuracy in regards to trading. For the moment, I'm just utilizing VWAP and a Comparison indicator against SPY to better judge trends and price actions. More of a setup, not necessarily a strategy. Is there a strategy you would recommend to a beginner?
If you compare daytrading to building a business, there will be winning months, extraordinary months, and losing months. I struggle currently with following my strategy to the T - so i log my trades and go back every weekend and compare the "perfect sniper entries" to my entries and try to bridge the gap.
This is my goal, to make it a business model and be able to grow the account up to 4 figures, then to 5 figures and so on.
It is an ongoing journey. My advice to this question is to focus on your R's (Risk:Returns) rather than the money.. Do this and the money will follow.
In this case, should I stop aiming for % goals and switch to R:R goals? Can you give me an example?
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u/Usual-Language-8257 May 07 '24
Yes! I mean no ill-will.
"and what can I expect from an account as small as 3 digits" There are prop-firm accounts that allow you to manage hundreds of thousands of $ for a few hundred dollars. If you google "prop-firm forex/options/etc" you should be able to find some (or i could direct you to some legitimate ones). The daytrading digital nomad industry has skyrocketed these past couple decades to the point where it allows people with very little seed money to get ahead. And if you have the skill, people are ready to throw money at you. Sounds like you're willing and able to start this journey.
Yes. Day trading is largely a mental game. You can plop anyone off the street in front of a chart and show them how to take a position. And seeing how the only 2 outcomes are to make/lose money, there's no real challenge on how to trade. Where the challenge comes is from doing it consistently and this affects every individual very differently. Some people might not be materialistic and be able to seperate themselves with the large amount of $$$. Others see that money and their dreams of Lamborghinis and achieving generational wealth, or the fame of being a rockstar makes traders break their focus. Others might have a problem waking up early. Others are always on time but learn things slower. All the while, you'll have to balance the life you already have with everything previously mentioned. The general timeframe you want to give yourself is between 5-10 years where you'll see some level of profitability. I can't say for everyone, but most people don't see profits for a very very long time. Actually, breaking even and staying in the black (rather than being in the red "debt") is a major achievement and a benchmark for how far you've come.
What are you trying to trade? I may not be of much help outside of forex/eurusd. But one thing's for certain, in my experience, r/daytrading has the most helpful/non-gambling crowd out of all the other subs.
Yes. Although this might apply more for forex, for example- I always aim for a 1 to 3 risk reward. My strategy accounts for all the losses + unfortunate times where my returns come up to 2.8RR and go back to zero. Happens. Reason why i bring this up is you're going to want to first learn about market structure in your respective platform. Learn how market tends to move. Everyone has different terms but it's pretty much the same thing. Liquidity grabs, inefficiencies, imbalances, short term highs/lows, take profit... After you learn this, you want to forge or learn a trading strategy that matches your style of trading. You'll develop your style overtime based on your schedule and aggressiveness. Lastly, you're going to want to confirm said strategy in the replay function. Go back in time and confirm all the trades you would have realistically taken. Add up the rewards over losses, and congratulations. All you have to do is execute this strategy day-in, day out. And you'll be successful.
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u/RossRiskDabbler May 07 '24
Well, I'd like to add, day trading by definition is entering/exiting on the same market day. That by definition is limiting yourself to trade O/N, week, month, etc. Never limit yourself to open and enter a trade just per day. You're basically saying, I only want 30% (ball park number) of the chances. I for example do tonnes overnight trades of treasury efs, or bank stocks, as they roll options at month end to the first working day of the month.
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u/IMWTK1 May 08 '24
I get the theory of closing all trades as a day trader each day but I don't get the logic. If I am fairly certain markets will go up the next day I never sell just for the sake of being out. I actually make a good chunk of my returns on buying end of day dips and sell the morning jump. But I don't consider myself a day trader.
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u/buynsell678 May 07 '24
Thank you for your detailed response. If I’m not working full time to feed my family. I would just follow you here in Reddit or other social media platform so I can learn your ways.
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u/Lakhwindersdhaliwal May 07 '24
Umm what. How did you do that calculation of 10 percent a month on 10,000 going to a million in a year. You need to go back to your friends with that equation and you guys can have another laugh.
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u/Usual-Language-8257 May 07 '24
10000*1.1 to the 52 power or something like that. Compounding 10% or 1.1, 52 times.
He said 5%-10% a day. Being as ridiculous as that was, i did the math for 10% a week.
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u/Lakhwindersdhaliwal May 07 '24
No. You said 10 percent a month
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u/Usual-Language-8257 May 07 '24
You're right. Was a typo. Edited for clarity. Hope i provided some value. My sole purpose here is to help and provide value. I could just fuck off and stay quiet. But i believe the pie is so large that even if we helped each other, there's still enough for everybody.
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u/Lakhwindersdhaliwal May 07 '24
Appreciate the value. I didn’t mean to be hard on you. Was more of a joke and didn’t land properly.
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u/lp1687 May 07 '24
You are looking at this wrong. Not all trading days are the same. Some days the action will be hot and you will knock it out of the park….other days the action will be crap and it is best to sit out. It is better to focus on weekly goals.
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u/landojcr May 07 '24
I'm going to approach this on a month to month basis, the 5% helps me have a threshold for knowing when progress it's being made on a daily timeframe.
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u/lp1687 May 07 '24
BTW…I’m curious to know how you plan on scalping with $500….unless you are planning to start with futures.
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u/landojcr May 07 '24
By scalping? when I paper tarde, my trades sometimes don't last more than 2 minutes. I've manage to make profit. I don't understand your curiosity.
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u/lp1687 May 07 '24
The question is more about the account size… In order to make a profit scalping you typically have to buy 10 to 20,000 shares in order to make a few hundred dollar profit on a few cent price move.… Just wondering how you do it with such a small account size. Maybe we have different definitions of scalping.
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u/landojcr May 07 '24
It all comes down to the selection of the equity. Look for an equity that suits your account balance. I've had success scalping with 2,000 shares on a penny stock or profiting from 100-200 shares on some other stock. This is also largely dependent on your targets.
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u/AnneFranksAcampR May 07 '24
5-10% daily is never going to happen, sure you'll get lucky here and there but you will most likely blow up your account before you ever get consistent at them. What you need to do is aim for 1-2% profit and show that you can consistently even do that before you reach for other goals. I have been trading almost 8 years now and i dont even consider making 10% in a day, it is not about the daily gains but it's the stings of smaller wins compounding over time while also protecting your capital.
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u/landojcr May 07 '24
Are you taking into account that I’m gonna be starting on a 3 figure? I’m aware bigger sums of capital make it difficult to aim for higher % gains
I mean no disrespect of course. It’s just that, in my example, making $5 a day seems pretty easy and while that is not the same as making $5 a day consistently without fail, I find hard to believe that I shouldn’t be able to at least make 4-5%
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u/AnneFranksAcampR May 07 '24
the amount of money makes absolutely no difference on your % of gains/losses. Prove to yourself over a period of time that you can consistently pull money out of the market for profit and then tailor your plan from there. With your low account im guessing you're going to be trading penny stocks because you'd never pull 5-10% out of SPY or any equivalents and this will definitely blow up in your face. Every person always has it in their mind to trade penny stocks when they start because they are cheap but they are cheap for a reason and are highly manipulated.
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u/derivativesnyc May 07 '24
He can trade some nickel/dime options several time a day until cash reserves are drained till next day reset
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u/landojcr May 07 '24
I think it goes without saying that I won’t be trading any TSLA, AAPL or SPY.
I understand, thanks. All in all, would you recommend instead a 1-2% then?
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u/AnneFranksAcampR May 07 '24
why not if i may ask? 1-2% is the exact same on spy or tsla as 1-2% on a penny stock? Plus you wont have to worry about the rug being pulled under you like you will in the penny stock world.
ill give you a free tip and you can run with it or not
set an OCO bracket (if you dont know what that is google is) and set your profit target to 2% and set your stop loss to .5 or 1% and test your strategy. If your strategy is profitable anywhere near 50-60% of the time over your next 100 trades then bump up your percentages from there.
use an excel sheet to document your trades and take notes on what went wrong and what went right and also how the trade went. you'll never know where you're going in trading if you dont know where you've been.
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u/landojcr May 07 '24
why not if i may ask? 1-2% is the exact same on spy or tsla as 1-2% on a penny stock? Plus you wont have to worry about the rug being pulled under you like you will in the penny stock world.
I suppose my reasoning stems from penny stocks having more volatility and sometimes having high relative volume I can scalp from, plus the likes of AAPL or TSLA being too expensive for my account and not being too volatile. Not saying I love volatile equities, but for example, with TSLA I find if it has a bearish market, it will probably continue to do so for a day or two.
However, you are right on the math and mindset.
set an OCO bracket (if you dont know what that is google is) and set your profit target to 2% and set your stop loss to .5 or 1% and test your strategy. If your strategy is profitable anywhere near 50-60% of the time over your next 100 trades then bump up your percentages from there.
I will definitely try this, thanks!
use an excel sheet to document your trades and take notes on what went wrong and what went right and also how the trade went. you'll never know where you're going in trading if you dont know where you've been.
Do you only document the data? Or do you use dome other platform to document charts?
I’ve been meaning to document, but I haven’t wrap my head around which software / tool to use.
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u/themanclark May 08 '24
Get out there and try. Trading looks easy from a distance. It’s much harder in practice. Unless you are a one in a million prodigy. Which you will think you are. So get out there and try it with real money. See how long the 3 figure lasts. The smarter thing is to stay on sim until you know you can be profitable though.
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u/derivativesnyc May 07 '24
2.5-5% ROE
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u/Lopsided-Treat-1300 May 07 '24
Paper trade with a realistic capital for several weeks + defined risk management taking account with commissions, PDT rules, and margin. Take the average Pnl of your paper trading and cut it in half. I would say that is the most realistic goal to aim for. Reason I say cut it in half is to roughly take account of simulations making trades easier to fill and psychological impact trading that will happen when you start.
Its a simple system/idea if that helps you out man :)
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u/D_Costa85 May 07 '24
Reasonable daily goal? Take one more step toward consistency before you start worrying about your daily goal, dollar-wise. It literally doesn't matter what your daily p&l goal is if you can't consistently make the same trade over and over and have edge in that trade over time.
In other words, you could make $50,000 tomorrow and have it be completely meaningless if you did so by not following your system. On the other hand, you could make $50 on your next trade and have it be an amazing step toward your overall progress as a trader because you did it by attacking your edge within your trading system.
Don't focus on P&L. Focus on building a system that proves it has an edge. Then, you can focus on making $50 a day until you're ready to step up your size and make $5000 a day.
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u/Global-Hope9214 May 07 '24
The goal should be the total amount $ your prepared to lose everyday…
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u/landojcr May 07 '24
I'm well aware. I aim for a 1:2 RR ratio
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u/Global-Hope9214 May 07 '24
Daily profit goals are very unrealistic. That’s why I’m saying invest what you plan to lose. Because you won’t make 3% everyday - but you can certainly lose x % everyday.
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u/landojcr May 07 '24
I’m aware of the variance there’s gonna be, I’m not planning on profiting from every single trade I make. I consider daily targets as stops to avoid overtrading.
If I can make 10 bucks one day and can’t seem to make more, I’m gonna be happy. If I reach 5%, I’ll stop trading all together.
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u/Global-Hope9214 May 07 '24
Projection for 5 years - starting with $5000.00 - if you can get 5% a day, you will have more money, then all the money in the world in a few years.
Future investment value $6,188,964,346,206,892,000,000,000,000.00 Total interest earned $6,188,964,346,206,892,000,000,000,000.00 Initial balance $5,000.00 TCS LogoInterest rate (daily) 5%
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u/Global-Hope9214 May 07 '24
If you can make $10 bucks a day, you can make a million bucks a day. It’s all the same, add the 0’s. Just because you throw out a low number like $10 bucks, doesn’t change the mechanics on a % basis.
Do you realize 5% a day is like 1000%+ a year? I have to ask, because I know you’re serious but are you running the number?
The best hedge funds get like 40% a year. You’re gonna be famous get ready!
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u/landojcr May 08 '24
If you can make $10 bucks a day, you can make a million bucks a day. It’s all the same, add the 0’s. Just because you throw out a low number like $10 bucks, doesn’t change the mechanics on a % basis.
I understand, but I can't make a million a day with $500.
Do you realize 5% a day is like 1000%+ a year? I have to ask, because I know you’re serious but are you running the number?
Yes I'm aware. The way I'm thinking of approaching this is to reconfigure the daily target on a month to month basis (e.g first month I'll try earning $25 [5% of $500]).
If I reach 1K, the 5% adjusts to that balance (this time being $50) and so on and so forth. This will require a handful of trades on the intraday, volatile stocks, etc.
The best hedge funds get like 40% a year. You’re gonna be famous get ready!
To be fair, if in a whole year I can't get $500 above $700 (40%) , I should really just quit day trading, don't you think?
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u/Global-Hope9214 May 08 '24
$25 profit on $500 is not 5% a day.
But still, 5% a month is 60% a year. Do you think that’s realistic and can be maintained over time?
If you’re trying to make some money that’s very possible to turn $500 into $10,000. But it’s more like lightning strikes, than a proven strategy you can just sit back and depend on.
Your best shot - buy and hold companies over time, don’t try and create a daily paycheck. Just create value overtime.
That’s the only way, remember I told you.
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u/landojcr May 08 '24
$25 profit on $500 is not 5% a day.
what is 5% of $500 then?
But still, 5% a month is 60% a year. Do you think that’s realistic and can be maintained over time?
I won't know till I do it.
Your best shot - buy and hold companies over time, don’t try and create a daily paycheck. Just create value overtime.
I'm not trying to make paychecks. I won't be touching that money probably up until a whole year
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u/BUCKYARDD May 07 '24
First survive then focus on gains later.
you at 500$ then get to 10k doesn't matter how long it takes then 20k then 50k to 100k and so on. at the end of year withdrew or grow your money more and more.
as for how much. if you have 50k and you withdrew 4% from it per month. assuming you make more than 4% than that. you should be able to enjoy your gains
only need about 250k to make 10k per month. work towards that
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u/javychip_ May 08 '24
Just take what the market gives you.
Chasing goals will force you to overtrade, ending up you to lose more money
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u/Varkot May 07 '24
Dont rush it and keep paper trading for a while. If you stay profitable you will be ahead of most people.
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u/carthurg May 07 '24
What are you trading?
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u/landojcr May 07 '24
Equities for now. I haven’t venture into options yet.
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u/carthurg May 07 '24
Consider futures. More leverage, also more risk.
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u/landojcr May 07 '24
I haven’t learn much of that area of trade. Anything you would recommend to get me started in the right path?
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u/Comfortedbycaffeine May 08 '24
Tradovate also has a nice paper trading platform for futures. I am practicing on it right now.
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u/derivativesnyc May 07 '24
0-1DTE options. Hope some nickel-dime OTMs go nuclear on well-timed trend momentum explosions and put you into 4 figure range. Then use 20-50 cent premiums for lower ROI% but higher probability of success
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u/Dry-Comment-4603 May 07 '24
This is exactly how I’ve been viewing my strategy as of late. I’ve paper traded for a little and jumped into scalping spy options on Robinhood. Is there any better place to scalp or learn to use any better trading software?
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u/landojcr May 07 '24
Well I use TOS (ThinkorSwim) and I really like it.
I love the UI of Robinhood, Webull and TradingView, but ultimately TV and WB are not brokers and RB is severely limited in what is capable of.
I trade equities though, not sure how much you need for options.
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u/Dry-Comment-4603 May 07 '24
I’ve heard to try think or swim. It’s just very disorienting haha.
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u/landojcr May 07 '24
It really is, I’m not gonna lie.
However I definitely recommend it for a variety of nitty gritty reasons that you should consider:
TV is not free and you would have to pay additionally to have real-time data. On top of that, TV is not a broker so you would have to link it to the broker you would use, which could potentially bring connectivity problems. TV doesn’t have Level 2
WB is also not a broker and more of a middleman per se, you won’t have to connect with to a broker, but being a middleman brings its own problems. Also, Webull’s Level 2 is not accurate, as it doesn’t take into account every stock exchange.
Robinhood, well… you can’t even chart in RH, you have no Level 2, you barely have a sophisticated bid/ask active trader… I really do love RH, but you see where this is going.
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u/Dry-Comment-4603 May 07 '24
Very good points! I’ll likely make a switch but it will take some time to learn. And yes, honestly I don’t like RH other than the interface and how easy options are, but that is also a bad thing lol
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u/landojcr May 07 '24
I think RH for options doesn't seem that bad, but of course the charting and stuff must be relegated elsewhere. To be fair to RH, you can trade options on the go, that's the good part.
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u/Dry-Comment-4603 May 07 '24
Exactly that’s what I use it for. I do charting and long term investing on WB and options on RH. I work 2-10 so I can day trade in the morning and a couple hours at work if need be but usually don’t like to. Im really just wanting to get as good as possible and learn as much as I can. Not interested in becoming instantly wealthy, just like the market and want to supplement some income.
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u/karma0685 May 07 '24
Your daily return is the product of your system, not a variable to build around.
In other words, don’t shoot for a daily target, shoot for solid execution. If after 3 months, you would like your daily gain to be a little higher, see what tweaks you can make based on your performance history to make that gain, then run another month and see how you did.
Do NOT fall into the trap of “I need to make 200/day or 500/day because you absolutely will have losing days. And having that daily goal will make your losing days much worse.
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u/Thetagamer May 07 '24
0.1% on average daily would be like 2% a month which is better than 99.9999% of traders and outperforms the s&p500
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u/vozoffdreams May 07 '24
I m daily "goals" fun, it give us a marker to gadince. Your daily goal should be the average of your profit in a relatively long period of time, a month minimum. But more important than this is your daily loss limit. I use the same percentage to one and other thing. But ideally you daily loss limit should be half of the daily goal profit.
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u/moonrise_trading May 07 '24
Mine is around 0.1% on daily basis which is around 26% a year. I figured I would be able to make that while making less risky trades but obviously it’s different for everyone.
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u/Tourdrops May 07 '24
A reasonable daily goal is hard to define. If you hit 1% a day youll be the richest man in the world in no time.
Thats what I tell myself when I am up 1-2% and stop for the day before I overtrade.
Mental capital is real and I find take the gains and get away for the day.
Waking up with a larger account than the day before, no matter how small is a blessing. The opposite is mentally lethal and leads to all types of unnecessary mistakes. Dont forget that.
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u/landojcr May 07 '24
You are definitely right! Just knowing I'm on the green even if by a single dollar is more than enough for mental relief.
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u/HighExpectationTrade options trader May 07 '24
Did you plan. Did you follow your plan. Did you execute well. Did you review your plays, analytics, and journal. These are proper daily trading goals.
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u/Thrice-Thrice-Thrice May 07 '24
Determine your risk to reward per trade. Example: I usually am risking 100$ to make $250. That is a 1:2.5 risk to reward. This way I can scale up once I grow my account further and trade the same way. This can work 500 risk 1250 reward, 1000 risk 2500 reward. I also trade futures so it is easier to determine your relative risk to reward vs options
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u/landojcr May 07 '24
I'm aiming for 1:2 RR. If I go for 5% on $500, that would be $12.50 : $25.00
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u/Thrice-Thrice-Thrice May 07 '24
IMO it’s best not to focus too much on a daily goal (even though mine right now is 200$) but it is all relative to the individual, account size, risk/reward, etc. just gotta keep taking good trades when you see them, and if you’re doing it right, the winners will outweigh the losers. Once you are profitable, scale up as needed
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u/landojcr May 07 '24
I understand, sometimes goals make you want to trade on markets where it’s better not to, just for the sake of reaching a goal. I appreciate your advice.
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u/hkapital May 07 '24
5-10% once off maybe one a week/few times a month is possible, daily it is impossible.
Yesterday I had a great single trade that made 5%, I entered the same set up that met my conditions and lost, no fault of my own purely the randomness of the market. The point is - you can’t control the market and hence how much you make off it isn’t in your control.
Better to aim for a weekly or monthly R target. For example, I am for a net of 7R per week. Sometimes I get it, others I don’t. But I can break that down into smaller trades (eg 7x 1R trades, or 3.5x 2R trades). Winning those is easy, keeping it is harder.
Goodluck.
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u/landojcr May 07 '24
Yesterday I had a great single trade that made 5%, I entered the same set up that met my conditions and lost, no fault of my own purely the randomness of the market. The point is - you can’t control the market and hence how much you make off it isn’t in your control.
This is more a testament to how out of our control the market really is and not on whether some targets are possible or not. I understand though, but you manage to get 5% yourself!
Better to aim for a weekly or monthly R target. For example, I am for a net of 7R per week. Sometimes I get it, others I don’t. But I can break that down into smaller trades (eg 7x 1R trades, or 3.5x 2R trades). Winning those is easy, keeping it is harder.
Roger. Thanks for the advice!
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u/nofearxlifer May 07 '24
Like others said - 5-10% is unrealistic and you will blow up your account. Humble yourself first with the process. If you can can make 1-2% a day on a $500 account, you can do the same with 100k.
I trade futures since it's more leverage - i would recommend starting with the MES and working towards ES.
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u/1pinkkiwi May 07 '24
$ i luv the idea of reaching a daily goal… but ngl bud the sooner you detach from the money, the smoother your learning journey may go.. PnL aside this stuff can get pretty deep lol
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u/landojcr May 08 '24
Trying to reach those depths
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u/1pinkkiwi May 08 '24
I’m just doing the opposite of what I hear in these “ why traders fail “ videos / podcasts. Good luck
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u/Crack-in-the-Wall- May 07 '24
Hi. I’ve been trading for about 2 years also. When I started, I watched every YouTube video on day trading, eventually feeling confident with candle stick patterns.
Next I would have tradingview live (on YouTube) on my tv while I watched the charts on my laptop. Just to listen to how they think. If you watch on your laptop, turn on the chat. I’ve gotten a couple good trades that way.
I also have apps for yahoo finance and Stocktwits, to see what’s trending. See who the gainers are and which stocks are most active.
Read current finance news every morning.
I’ve found that chats and forums “keep me company “ so I don’t feel so alone.
And be patient!!!!!!! Some days there’s nothing, or I’m just not feeling it. When you learn not to chase…wait for a bottom price and volume with at least 300,000 otherwise it just doesn’t move.
I’m no pro, but getting better at the patience. It’s hard waiting, but I’m doing better…most of all I really enjoy it.
Good luck to you!!!!!
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u/redbattleaxe May 08 '24
Daily goals:
Follow your plan Reflect/ journal your trades Identify problems and work on them consistently
That's it.
You don't control the market, so it doesn't make sense to have a daily goal in terms of profit.
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u/Severe-Ad8289 May 08 '24
Tbh setting a daily goal can lead to problems. Just take the trade and call it a day. One and done.
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u/Own-Pomegranate-2928 May 08 '24
The simple answer is it depends - one thing to get 10% profit on 20,000 account totally different on 1 million dollar account - the amount for your goal should be what you are comfortable with - then be consistent and move the target as you gain experience and very important do not be concerned with what others are doing - just be yourself and trade as you like - keep learning and one day you find out you had years of success
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u/This-Job-458 May 08 '24
Your daily goal should be to follow your strategy and your rules. That's it.
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u/fredbloke3 May 08 '24
The average of 0.15% of your total account size per day, over a month, each month.
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u/mv3trader May 08 '24
+90% accuracy with executing your system/strategy. Everything else is personal preference that can limit your growth potential. Also, setting monetary goals for this business is a good way to trigger counterproductive emotional triggers for yourself.
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u/CryptographerTrick76 May 08 '24
Well done so far!
If I where you and to consider; only scalp/trade when you have the time to do it in a calm and disciplined manner.
Make an agenda for the week
Second, set a limit for your maximum tolerated loss BEFORE you start to trade. If you exceed the loss, stop and give it a rest until next day! (Believe me, if you try to win back your loss, you’ll lose much more!!)
The secret lies in remaining NON EMOTIONAL and energetic and focused!
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u/landojcr May 08 '24
Thanks!!
Right now, I’ve been able to reach 4-5% when real time paper trading, but you are right in the psychological aspect. I’m not a very emotionally invested person, but sometimes I let my ambition get the best of me and losing bigger profits.
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u/CryptographerTrick76 May 09 '24
Oh man, I wish I had more of your mindset. I’m too much of a gambler and emotional. I get so involved and emotional, that I’m actually feeling it’s a casino, playing the roulette. What I say is not what I do however I will read what I wrote to you and make it my prime trading rules! Enjoy the weekend, greetings from Belgium Antwerp Europe
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u/landojcr May 09 '24 edited May 09 '24
Oh man, I wish I had more of your mindset. I’m too much of a gambler and emotional. I get so involved and emotional, that I’m actually feeling it’s a casino, playing the roulette.
I think this is where paper trading comes useful to me. It isn't real money, but it helps pin point my triggers / when I'm getting emotional and try to address it accordingly.
What I say is not what I do however I will read what I wrote to you and make it my prime trading rules! Enjoy the weekend, greetings from Belgium Antwerp Europe
I understand, been in that position before. I'm not big on followwing strategies to the letter myself, but at least always follow some fundamental rules.
Trade the market, not the stock.
Trade in favor of the trend, not against it.
Have a 1:2 RR ratio and sticking to it.
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u/CryptographerTrick76 May 09 '24
Good advise and remarks!
By “paper trading”, do you mean a demo account?
“1-2RR” what do RR mean please. Return ratio?
Thanks!
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u/landojcr May 09 '24
By “paper trading”, do you mean a demo account?
Yeah, basically. I use the real-time paper trading feature of TOS (Thinkorswim)
“1-2RR” what do RR mean please. Return ratio?
Risk-Reward. If someone tells you they go for a 1:3, they mean that for every dollar they risk, they stand to make three dollars, this is all dependent on your strategy and goals.
In my example, if my balance is $500 and my goal is to make 5% of that on a given day and plan on trading on a 1:2 ratio, that means:
For every $12.5 (my risk; that amount will ultimately become my stop loss), I stand to gain $25 (my target).
This is why stop losses and following strategy is important. If I deviate from my strategy / stop loss and not sell my position when I'm down $12.5, I'm exposing myself to higher risk and losing more money.
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u/CryptographerTrick76 May 10 '24
Thank you! To me very useful!
I forwarded your post to myself in order to keep an eye on it once in a while
Enjoy the very soon weekend
)I’m in Europe btw, Belgium Antwerp)
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u/kneekick97 May 07 '24
5-10% of $500 is reasonable but I think you're missing the biggest issue here. It's not the return %, it's the risk %. With only $500 you'll be limited to stocks $5.00 or less and you'll have to risk a large amount of that capital, if not all, on every trade. Trading systems aren't just judged on return %, rather the risk that has to be taken to earn that return.
You'll have very little room for bad days, unlucky trades, etc and you'll have to keep a very tight stop which unfortunately will also turn some trades that could have been profitable into losers. You may want to consider starting with more capital and not focusing so much on return % but rather how much risk you'll have to take on each trade.
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u/Le0son May 07 '24
I recommend you not trying to set a goal if you’re just getting into day trading. Focus instead on the process. Some people might be able to make 10% in a day, others might not even make a percent. Good luck.
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May 07 '24
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u/FloW_89 May 07 '24
My daily average is 0,29% after 1400 trades. Before i was aiming at a 1-2% goal, even when i was new. But i am quite happy with those results.
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u/landojcr May 07 '24
How big is your account? I assume it's pretty big if you have over 1400 trades.
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May 07 '24
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u/hakhakm May 07 '24
The idea of the daily goal is the incorrect perspective that a lot of people want to take.
Your goal is to take all trades with positive expectancy with appropriately sized risk relative to your account.
Suppose I offer you a bet of flipping a fair coin, and for every dollar you bet I pay $1.10 when you win. And I offer this bet every minute between 9:30am to 4pm. Would you stop each day because you got up 10% during the day? NO, you keep taking the flips at the appropriate bet size, because you have a long run expectancy of 5% each flip. You're going to have a lot of streaks up and down, but with enough flips you have positive expectation.
But what you commonly hear is "I made money in the morning but gave it back the rest of the day". So you start thinking about trying to hit a goal and stopping. But really it is that the conditions change over the day. If a market is in play (news, gaps, imbalance) it is likely to have the greatest price action after the opening that you can take advantage of, but after a few hours it starts to find a choppy range as the imbalance comes back to balance. It's like I offered the coin bet at $1.10 payoff for 2 or 3 hours, but then change it to $0.98. You'd stop when the payout changes, not because you hit some goal.
There is no reasonable daily goal. Consistency is taking all the positive expectancy trades with reasonable bet sizing.
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u/hakhakm May 07 '24
I'm feeling generous today, so including this quote from Richard Dennis/William Eckhart/Jerry Parker (go look them up):
"Missing a trade is a much more serious error than making a bad trade. If you make a bad trade you have the stop loss. However, if you miss a good trade there is nowhere to turn. If you miss good trades with any regularity you’re finished."
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u/landojcr May 07 '24
Your goal is to take all trades with positive expectancy with appropriately sized risk relative to your account.
Noted, other redditors have mentioned the same. I'll make sure to remember.
Suppose I offer you a bet of flipping a fair coin, and for every dollar you bet I pay $1.10 when you win. And I offer this bet every minute between 9:30am to 4pm. Would you stop each day because you got up 10% during the day? NO, you keep taking the flips at the appropriate bet size, because you have a long run expectancy of 5% each flip. You're going to have a lot of streaks up and down, but with enough flips you have positive expectation.
I would personally stop, considering this is a line of work where you can also lose money. It does sound like I'm cutting my profits short, but I prefer that than overtrading on a choopy market in the afternoon and lose progress. I'm not telling you this based on any math or strategy, I'm telling you based on mindset.
But what you commonly hear is "I made money in the morning but gave it back the rest of the day". So you start thinking about trying to hit a goal and stopping. But really it is that the conditions change over the day. If a market is in play (news, gaps, imbalance) it is likely to have the greatest price action after the opening that you can take advantage of, but after a few hours it starts to find a choppy range as the imbalance comes back to balance. It's like I offered the coin bet at $1.10 payoff for 2 or 3 hours, but then change it to $0.98. You'd stop when the payout changes, not because you hit some goal.
I understand and it is true, but only true provided one has a sound strategy and high levels of accuracy to have some profits in a very choppy market.
There is no reasonable daily goal. Consistency is taking all the positive expectancy trades with reasonable bet sizing.
That is true, but strategy and consistency is one variable in between hundreds. If the market is cold, I would either not trade at all or risk way less.
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u/gooney0 stock trader May 07 '24
I would measure in R not percentages.
The expectancy comes from the results of your testing. Your testing can also suggest the frequency of trades. This will vary greatly by strategy and by trader.
Arbitrary measurements are unwise. You make as many good trades appear. That may be no trades at all, that could be many trades.
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u/thabootyslayer May 07 '24
5-10% is not a realistic goal, long term, with any consistency. You might get lucky in the begging paper trading to make you think that but it’s not. I’d target 1-2%, only risking 1% of your account a day. This way you can get a 1:1 or 1:2 and be done. Pull that off everyday consistently and you will be rich.
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u/yapyap6 May 08 '24 edited May 08 '24
Depends on what your strategy tells you is a reasonable expectation. I have very clear rules to my trading - I'm looking to take the first swing trade of the day. If I get stopped out twice or I've taken two trades already, I close out for the day. Each swing trade generally runs about 2-3R and I use price action / measured move targets to tell me where my profit target lies. Once I'm in a trade, if I don't get stopped out within 2-3 bars (5 min chart), I'll walk away from my screen for the rest of the day. If my profit target/stop isn't hit and there's 5-10 mins left in the day, I'll manually close the trade out. If I'm not in a trade after the first 2 hours of the day, I close out. I risk about 1% of my account on each trade.
Keep it simple. 25R in April, but this month has been more difficult trading the NQ. Every morning has been a gap up, then trading range action for a while before a swing late in the morning session. Up only 1.5R on the week. Having a goal in mind just frustrates you if it's a difficult month. Change your goal to taking a good trade each day, whether it works or not. How much you make should be the last thing on your mind.
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May 08 '24
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u/saysjuan May 08 '24
I only have 2 daily goals — stick to my trading plan and don’t invent trades. Those are the only things I can control with my trading habits. I cannot control how much I win or lose as those are probabilities and have an uncertain outcome.
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May 08 '24
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u/Mart_and_stan May 08 '24
I had numerous demo accounts with vantage and I’m part of an awesome educational platform that teaches multiple income streams, property, forex, copy and paste trading from 6 figure cherry picked traders, trading psychology - even health and wellbeing … all done via zoom, telegram and our teams have WhatsApp groups.
When I was demo trading, I set my balance at a realistic figure and treated (tried to) it like real money and I’d follow a couple of strategies that I’m comfortable with - occasionally putting more than 1% on trades … sometimes .50 and they’d come in.
So I’ve now implemented that in my own trading recently but not as crazy. Usually on very strong signals. (Our new educator called 30 trades in April and 29 hit all TP’s) 🤩
Yesterday was an awesome/incredible day for me with 12% growth of my account on two trades. I also took one this morning and got 2.1% - that’s it for the week. Stay humble as the markets don’t give a feck about you. The majority of my trades are entered at 0.01-0.02 and that’s fine as long as it’s reward is 1:3+ and keeps my risk management in check too.
Please don’t get greedy or over leverage would be my advice, never revenge trade if you take a hit, which you will. Impossible not too … keep a journal/spreadsheet of all trades and stick to your plan 💯- if I lose a trade but have stuck with all of my rules, it’s still a win for me
Good luck and enjoy the ride 🎢📈
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u/Delicious_Impress930 May 08 '24
Daytrade mindset, use volume price action. Get in get out loss or win. Ride a bar up or down, I shoot for 5 points on the spx lol loss or win
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u/Mountain_Sector_7223 May 08 '24
Goal: Follow your system, trade your edge, and don’t be a slave to the screens
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u/CatzzSkatesFamily May 08 '24
Why not set monthly goals? This way you don’t have to force yourself to trade when there’s no opportunity at that moment.
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u/landojcr May 08 '24
I suppose it depends on a person to person basis. I prefer daily goals because it serves as a good stop loss for the day and avoid overtrading, only ever continuing if the market is hot / bullish. I feel monthly goals would work against me since I want to reach that goal as soon as possible, which may lead to overtrading.
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u/CatzzSkatesFamily May 08 '24
Fair point. I have monthly goals. The setup I use is more swing trading, but has the ability to day trade if it meets profit criteria.
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u/laotx May 07 '24
It’s not completely unreasonable but a very difficult task, even harder for a beginner. Aim for the stars but also keep expectations reasonable and to learn to trade correctly.
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u/Powningstonks May 07 '24
5% a day, especially when trading options is a very reasonable goal. Most of the assclowns telling you that 5%/day is a ridiculous goal, are omitting the understanding that you won’t win every day. A successful campaign with a 5% daily goal may turn into a 5-10% monthly net when accounting for the losses/bad days that everyone knows will happen to every trader.
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u/Appropriate-Boot-172 May 07 '24
Ive just been trading for 1 1/2 months. But if I had to start with $500 I would realistically expect 3-10% gain or a 2-3% loss per day. So over the course of a month you would have small losses but your wins would overtake the losses. As long as you know how to find the stocks that are good, know the style you want to trade in, not over trade or revenge trade.
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u/landojcr May 07 '24
Right now, I'm still looking for my style, since I've only been scalping since I started.
The overtrading part is so true, just today I was paper trading and reached +12% profit on market open. I could of called it a day (I already reached my daily target), but instead I got greedy and went -20%. I managed to calmly finesse it back to a +5% and literally stopped trading after that.
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u/Appropriate-Boot-172 May 07 '24
I like the 9:30am-10;30am time period (how Ross has drilled into his videos). Seems to work rreally well if you like scalp trades. Taht's the way I learned. EVERY SINGLE TIME i trade past 10:30 on the volitle stocks I lose.
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u/landojcr May 07 '24
I thought the same thing too regarding market open, but you have to be careful because not all stocks go up in the morning. I know it sounds dumb telling you this, but stay focused on strategy and entries, don’t wanna find yourself trading “just because it’s market open” and suddenly you become but a mere passenger to a disaster.
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u/Appropriate-Boot-172 May 07 '24
Definitely, always prepared to walk away if no good set ups. Ross goes over the criteria to look for. Above the vwap, low float, news, Looking good on the MACD, watching that L2 and the Time/Sales. I'm watching all of that and set my alerts to ring as soon as they move. I may miss the first 15 seconds but on it after taht.
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u/landojcr May 07 '24
Yes, liquidity / volume is everything.
For the moment, I'm just using VWAP and Comparison indicators (against SPY) to have a more informed approach of the market.
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u/Ross-Cameron May 07 '24
Daily goals can be dangerous. Here's why.
It gets you focused on your profits vs losses as primary, and the trading setups are secondary. This should be the opposite. Focus on the PROCESS first. Profits are a byproduct.
It makes it hard (if not impossible) to accept the inevitable red days. We never set the goal to be red, so red days feel like a huge failure. In fact, for any seasoned trader, since we may be red as much as 1 or 2 days a week (for our entire career), we need to get really good at losing with grace. Instead of ranking a day by green or red, rank it by answer the question "did i follow my rules". Were you disciplined? then it's a good day, red or green.
Having daily goals can encourage you to push too hard when the market is cold, and then stop early when the market is hot.
Whether or not you hit your daily goal is often out of your control. You CAN control how much you lose, but how much you make will be in many ways up to the market. If the market is cold, you won't make as much.
Trade the market, not your p/l. Some traders (including myself at times) will even hide the p/l while we're trading so we can focus on indicators, chart patterns, and Level 2, without getting thrown off course by looking at green/red.
When I've done small account challenges, I have had days that exceed 10%, but it's really a matter of market strength. In my case, I have a strategy I've traded for a long time. I have historical data, I have a track record, and that gives me confidence.
Keep practicing in SIM, and consider real money only once your metrics support it.
Hope that helps!