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How much can you make in 5 years? Money makes money . It's an age-old saying, probably because it's generally true. But starting out as a retail trader can be daunting and at times, frustrating. It takes time to build up a sizable account big enough to allow us to take the leap from trading part time, to full time trading. Something that has kept me motivated over the years is an excel spreadsheet a friend of mine made. It demonstrates how consistent monthly returns can lead from a small and humble account balance, to a huge one. Thanks to the compounding effect. Assuming you don't make any withdrawals, let's see where consistent, conservative trading over 5 years could get you. SCENARIO 1: SHRIMP Starting balance: $1,000 You've traded demo for a while, you've developed a winning formula, and you're ready to put your money where your mouth is. Monthly contributions: $100 A hundred bucks is all you can afford at the moment, after bills and overheads Monthly returns: 8% By being selective in your trades and risking between 1-2% per trade, your conservative approach has allowed you to be consistent so far Year 1: Month 3: $1,484.35 Month 6: $2,220.47 Month 9: $3,147.76 Month 12: $4,315.88 Year 2: Month 15: $5,787.38 Month 18: $7,641.04 Month 21: $9,976.13 Month 24: $12,917.66 Year 3: Month 27: $16,623.14 Month 30: $21,290.98 Month 33: $27,171.11 Month 36: $34,578.39 Year 4: Month 39: $43,909.42 Month 42: $55,663.83 Month 45: $70,471.01 Month 48: $89,123.79 Year 5: Month 51: $112,620.92 Month 54: $142,220.53 Month 57: $179,507.52 Month 60: $226,478.39 Behold! The humble $1000 has been transformed into more than 200k. That's just 4 winning trades a month at 2% per trade. SCENARIO 2: FISH Starting balance: $10,000 So you've got a good chunk of savings lying around and you're ready to get serious with your trading. Monthly contributions: $0 You've stumped up all of your available spare resources into your trading account and you want to enjoy spending any surplus money from your other income streams. Fair enough. Monthly returns: 8% By being selective in your trades and risking between 1-2% per trade, your conservative approach has allowed you to be consistent so far Year 1: Month 3: $12,597.12 Month 6: $15,868.74 Month 9: $19,990.05 Month 12: $25,181.70 Year 2: Month 15: $31,721.69 Month 18: $39,960.19 Month 21: $50,338.34 Month 24: $63,411.81 Year 3: Month 27: $79,880.61 Month 30: $100,626.57 Month 33: $126,760.50 Month 36: $159,681.72 Year 4: Month 39: $201,152.98 Month 42: $253,394.82 Month 45: $319,204.49 Month 48: $402,105.73 Year 5: Month 51: $506,537.42 Month 54: $638,091.26 Month 57: $803,811.22 Month 60: $1,012,570.64 Now it's unlikely that in this situation, you'll be trading pip sizes more than what would bank you 100k in 3 months, but the point is that you can trade conservatively and get to a point where you're earning enough to live like a king in just a few years. Happy trading everyone! Hope this has helped to motivate you and think about trading more conservatively to preserve your capital and think about your long term future. AvidTrader P.S. If anyone would like the real spreadsheet, PM me.
Education
by avidtrader89
3
EURUSD LongEURUSD long set up After being bearish on this pair in the early part of the week we are now seeing a daily reversal of PA A daily bounce from support at 1.0500 rallied the bulls and broke the descending CTL to the upside This bounce from support was also confluent with the 61% Fibonacci level Expecting the pair to push higher over the coming trading days and maybe even test the resistance of the longer-term descending trend line. This pair is the perfect example of not becoming 'attached' to a perspective/bias on the pair. As mentioned I was short on the pair at the start of the week but comments which deterred USD bulls led to a reversal in PA and perspective across the board. As such, I closed my shorts out in profit and re-assessed the market. Always let the price action dictate its next move to you rather than you try to dictate the markets through your beliefs, because frankly, the market doesn't care what you think. Trade careful.
Long
by Erudite_Investments
GBPJPY - LongPossible long sent up on GBPJPY following the Wednesday candle closes January closed with a strong wick bounce from support at 137.00 And price over the past week has shown bullish intent Break and retest of the descending TL on daily as well as a close above support at 141.50 which is a level confluent with a daily 38% fib support and todays daily candle shows bullish continuation Anticipating price potentially reaching the -27% fib extension at 147.00 Lots of GBP news tomorrow though which will cause volatility so this trade will need appropriately managing
Long
by Erudite_Investments
GBPCAD: a curious configurationGBPCAD closed the day in a very curious configuration that deserves being observed for potential action. The price touches the trendline and on the Weekly (below) and on the Daily. However, the closer zoom on the H4 timeframe in the main chart shows that the price actually broke out the downwards trendline. Now the peculiar thing is that this level: Sits on a 50% Fibonacci level taken from the weekly higher 2 times back. Is just above the 50% Fibonacci level taken from the latest lower high. Is just below a Fibonacci cluster made by the one taken from the weekly higher 3 times back and the one taken from the latest lower high. All in all the configuration is not one we see every day: not that I expect the price to bounce back and forth like a flipper ball, but this is not a moment for me to jump in. Unless the Fibonacci cluster sends the price decisively below the trendline, the first hours of the market see me #NEUTRAL on this.
by AlbionTrader
NZDUSD 1D Channel Break ?NZDUSD has been very choppy the last year and a half but it has slowly ascended within a wide channel formation. The pair had a very strong bearish move after yesterdays interest rate hike but it is yet to approach the bottom support of the ascending channel. I am looking for a brake of the channel and if it's broken I would go short @ 0.69876. My first target would be the daily support somewhere around 0.68000 if the is broken then I expect further down movement
Short
by JorgeLantigua
GBP/JPY HEAD AND SHOULDER PATTERNGBP/JPY has formed a head and shoulder pattern on the 1H and 4H charts, indicating that a top has been made and price will carry on its retrace from the last 2 weeks of bullish gains. Traders should wait for a breakout of the pennant/flag that contains this pattern. Wednesday - (Jul) Manufacturing Production, BoE Gov Mark Carney Speaks and BoE reports on current inflation. Thursday - JPY GDP (Q2) data and various others, Positive data and strong yen (currently) will play a huge factor in a bearish move to the 61.8% Fib retrace level. Possible that it can break and reach 1D support 129.10 Currently I am short and have been when price kissed the 1D resistance Friday afternoon.
Short
by RenkoBuddy
USD/JPY HEAD AND SHOULDER PATTERN USD/JPY has formed a head and shoulder pattern on the 1H and 4H charts, indicating that a top has been made and price will carry on its retrace from the last week of bullish gains. Traders should wait for a breakout of the support zone as price tested for support 02/09 12:00 (GMT+1) We have a supply zone above price and a demand zone from 102.37 -101.72. Expect some choppy movements through the demand zone and possible break through to the 1D support level 99.67. USD - Chances for September rate hike are getting lower as Fridays NFP was below expectations. Last weeks USD data was a wash with negative and flat data and I don't think this week will be any different. Thursday - JPY GDP (Q2) data and various others, Positive data and strong yen (currently) will play a huge factor in a bearish move.
Short
by RenkoBuddy
1