In 2002, I was fed
up with my corporate job at IBM.
I was ready to quit.
I'm going to quit.
What?
I wanted to do something
differently, and I was always
fascinated by trading.
The idea of working from home
without the time-sucking commute
to work was very appealing.
I wanted to work when I want
and where I want, and trading
seems to make that possible.
But the question is, how much
can you make from stocks in a month?
And that is what we're going to talk
about in this video.
So, how much money can
you make trading stocks?
What is a realistic number?
Is it really possible to make a
part-time, or maybe even a full-time
income with trading?
Let's take a look at this.
You see, when I was still new to
trading, I had completely
unrealistic expectations.
I remember exactly that
I started trading with a $20,000
account, and I had this crazy
idea that I could double it every
3 months.
So after a year my $20,000
would become
$160,000.
Easy enough, right?
No.
It was a completely unrealistic
expectation.
So, how much money can you make from
stocks?
You see, I've now been trading for
17 years, and
in my experience, beginners
can expect to make 60%
per year. And here's how to do it.
Let's say you start with a $10,000
account.
Now, you should never risk more than
2% of your account on any
given trade.
And when you start with a $10,000
account, that would be
$200 per trade.
And as a goal, you should try
to make 1.5 times
as much money as you risk.
So, if you risk
$200 try to make
$300 on this trade.
Yes, this is very
conservative, but trust
me, as a beginner you
should start with a low goal.
You can always raise your goals
after you reach your small goals.
You see, too many traders set their
goals way too high and then
they're surprised if they don't hit
their goals.
Be conservative, trust
me, the math works.
So now let's say that you make 10
trades per month, and let's
assume that half of your trades are
losing trades because losses
are part of your life as a trader.
So here's the math.
You have 5 losing trades
and you lose $200 per trade.
So that's -$1,000.
And you have 5 winning trades
and you make $300 per trade.
So that's
$1,500.
So at the end of the month, you have
$500 left,
even though half of your trades were
losing trades.
Isn't that cool?
Now, there are 12 months in a year,
so 12 x $500
is $6,000
based on a $10,000 account,
and that's 60%.
Now, $500 per month
is not a lot.
So let's talk about it, and in a
moment I will show you how
to make more.
Is this making sense thus far?
Click "Like" and say, "Yes,
this is making sense" in the
comments if you're with me thus far.
Okay.
Now let's talk about, can
you make a monthly income
from stocks?
By now you already know that you can
realistically make 60%
per year, even if half of
your trades are losing trades.
So if you would like to make
$60,000 per year, you simply need to
calculate how much money you
need in your trading account so
that 60% =
$60,000.
And here's the formula you would
use.
Take the amount that you want to
make, in this case, $60,000 and
divide it by 0.6.
So $60,000 ÷ 0.6 = $100,000.
So, if you want to make
$60,000 per year, you need to have
at least $100,000
in your trading account.
Now if you would like to make
$120,000 per year, you need
$200,000 from your trading account.
Easy enough, right?
In a moment I will show you how to
grow a small account.
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So let's talk about how to grow
a small account.
Now you know how much money you need
in your account to make a monthly
income with stocks.
And the next question is, how
do you grow a small account into
a larger one?
If you start with $10,000,
you need to use aggressive money
management to grow this
$10,000 into
$100,000. This means that you have
to increase your risk, because
the more you risk, the more
money you can make.
Now, the important thing, you have
to be able to consistently
make money with trading first
before you start increasing the
risk.
It's like learning how to drive.
In the beginning, you should learn
how to drive on an empty parking
lot, at least that's what I did
with my son.
And after that, we went into a
neighborhood with a speed limit of
25 miles an hour.
And after that, we moved on to a
neighborhood with a speed limit of
35 miles an hour.
And after a few months and lots
and lots of practice, we finally
went to an interstate.
Now, what do you think would have
happened if we went to an interstate
on day one?
My son would have probably crashed
the car, and the same in
trading.
Start slow and then
work your way up.
And once you see consistent profits,
you can start increasing your goals.
So here's the new math.
Instead of risking 2% of your
account size on any given trade,
let's assume that you would risk 3%
of your account.
So, based on a $10,000 account,
that's $300 dollars.
Now let's say that instead of taking
profits, as soon as you see one and
a half times the risk, you
take profits when you achieve twice
the risk.
So in this case, you would risk
$300 and try to
make $600.
The rest stays the same, at least
for now. We assume that you make 10
trades per month and half of
your trades are losing trades.
So, here's the math:
5 losing trades of $300
per trade means a
negative of $1.500, 5 winning
trades of $600
per trade means that you make
$3,000. So, at the end of the month,
you now have $1,500
left, even though half of your
trades were losing trades.
Pretty cool, huh?
Now, $1,500 per month
x 12 months is
$18,000 per year.
Getting better.
Now let's say you are getting
more experienced and you start
trading more.
Instead of taking 10 trades per
month you now take 20 trades
per month, and 10 trades
are losing trades and you lose $300
per trade. So that's a
negative of $3,000.
The other 10 trades are winning
trades and you make $600 per
trade, that's
$6,000. So this means that
you now make
$3,000 per month.
$3,000 per month X 12 months
is
$36,000 per year.
Pretty good, huh?
But here's the kicker.
Of course, you would increase your
risk as soon as your account
grows.
So if your first trade is a winning
trade, and your account grows from
$10,000 to $10,600,
you now risk 3% of
$10,600 which is $318.
And you try to make twice
as much,
$636.
As you can see with this progressive
money management, you can achieve
your goals much quicker.
So in summary,
how much can you make from stocks in
a month?
As you can see from the examples I
mentioned, this depends on three
factors.
Number one, your start capital.
Number two, the amount of money
you risk. Number three,
the number of trades you take per
month.
And based on these three numbers,
you use the simple math, as
I did in this video, and you can
easily calculate how much
you can make from stocks per month.
Now, if you found this helpful
then hit "Like" and make sure to
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Talk soon.