What is realistic amount of pro t to
aim for annually on your starting
capital? Many investors when asked
this question simply say as much as
possible. They have not sat down
and thought about it, they simply
have read stories of the minority
who have made it big and want to
do the same. The fact is that most
traders’ start with unrealistic expectations and this leads them in to a false sense of
security. They ignore the risks of trading; they concentrate too much in one trade and
risk too much and end up losing. So what is realistic? Any trader who can achieve
growth rates compounded of 30% + per annum is doing very well. Generally, a
compound growth of 30 - 50% per annum would place you in the top 10% of traders
that make money and this is a realistic goal if you do your homework.
Be Independent And Isolate Yourself
Emotions are your enemy when trading so it is important to be independent and follow
your own path. It may sound lonely relying on yourself and is in fact uncomfortable to
many but as time goes on your own opinion is just as valuable, perhaps more so than
any others, experts or novice traders.
Don’t Lose Sight Of Your Ultimate Goal:
The ultimate goal of trading is to make money. There is no goal greater than this in
trading. Though there are other bene ts to trading self-satisfaction, competitiveness
and the actual thrill, these are all secondary. If you seek revenge against the markets,
other traders or merely want to compete for the sake of it, then the primary goal of
speculating will be lost and so will your money.
Ten Types Of Market Action To Avoid:
Don’t Act On News Stories
The market is a discounting mechanism and the news you
see has probably already been re ected in the market
price. As newspapers and the nancial press tend to
re ect the views of the majority they tend to be wrong.
Articles and stories can be very convincing and that’s
what there designed to be, a good story it maybe, but
the chances of you making money out of it are slim. Stay
away from these stories and have disciplined technical
approach that is helping you understand not only what
has already happened, but also what is likely to happen
in the future.
