This is probably the question we hear most often, and we think that we should spend a few minutes to explore this topic. What you need to know when it comes to performance or rate of return in the trade? Even if you do not find the specific return code here, this article will help you to understand your trading in a new light.
Why do you ask it?
You want to know what you can expect from your trade and if it is worth spending your time on it. You might also want to calculate how much money you need or how large your trading account must be to achieve a certain level of income with your trading.
This is completely normal but we will see why this can be dangerous for your trading.
Trading is not a sure thing.
It is self-evident. There is no paycheck waiting for you at the end of the month and the payments can vary in the trade. To accept this at a deep level seems difficult for many traders as it means uncertainty.
Most people want to know how much money they make and when their salary come from so that they can plan their lives.
To be a trader means more than being able to read charts and understand the financial markets, but it also requires a mental change – especially for people with a job from 9 in the morning until 17 in the afternoon (it is different if you already are self-employed). Being a trader means that you think like a trader and accept the randomness and the uncertainty in this game.
The next step: don’t limit yourself
The next real problem that follows is that you limit yourself. Let us say that you in no way establishes a 5% monthly returmål and you only make 3% a month. Does this mean to you is bad? Of course not, but if you set a goal and not reach it, it can easily lead to frustration and then negatively affect your trading.
Trading is a business of great uncertainty and you can’t control how much money you can take out of the market. You have to be open for trade when they come and you have to stay away from forcing business because you want to reach your random targets.
I’m not you
Specifically, the results are closely related to risk and the level of risk you are willing to take will determine your returns, but also other things that kontosvolatilitet and drawdowns.
You can model other traders-trading practice, but you should never compare yourself with someone else’s results.
Of course the return is important and if you can’t make money, will trade not to be worth to you.
Where are you as a trader?
Your focus should be on someone else. It is like a footballer who ask how much Cristiano Ronaldo earns per year – it is not only useless, but it does not help you to become a good football player and gets to feel priceless, and the bad in the worst case. First you have to learn your craft, work with the basics and determine your place.
Your major goal is to learn as much as you can and avoid the usual nybörjarmisstagen.
You are your own opponent
Instead of that, ask other traders how much they earn, look at your own performance, and then try to improve it. If you are still losing consistently, attempt to become a more balanced trader. Focus on getting your performance to be positive, and if you make 1% – 2% per month, see if you can improve your performance by improving your process
Get a handelsdagbok and follow your progress
You know where you are and if you are moving in the right direction. I understand that it would be great if I could just say that you can make 100% return every year, by following a few simple tips, but this is not how trading works and the sooner you can understand it and focus on it, the greater you have a chance to succeed.