Hey hey: what's up my friends, so in today's training i want to share with you how much money a retail trader can make okay. So when i talk about retail trader, basically, as you know, it's like traders like me, and you right - we are trading from from our computer without any sophisticated software. These are these softwares are usually free or you know, doesn't really cost a lot of money. So this is what i mean by retail trader.

So how much can a retail trader make so, first and foremost, let me ask you how much money do you think a doctor make a year? Well, i'm sure you agree right there right now. It depends on a few things right. It depends on. You know where the doctor is working from clearly a doctor who works in let's say in switzerland, compared to a doctor working in india.

There will be a different pay scale because of the different standard of living and then a doctor who is a let's say, a brain surgeon compared to another doctor who's, just a general practitioner. Again, we have a different pay skill or a doctor with 20 years experience compared to a doctor that you know just graduate again, there will be a difference in pay scale. So how much money can a doctor make? Well, there are a few factors to consider or what about you know. Let's say starting up an online business.

How much money can you make you know doing an online business? You have you know, businesses making millions of dollars online and then there are some struggling and fail. Well again, it depends on a few things. Do you have a product that is in demand? Clearly, you know things like health supplements. Right are much more in demand compared to teaching your parent, how to talk or that's chicken right, so you can see that there's a demand, right supply and demand, or you know how much money uh, or rather how much volume does your business does right? The more you sell per day - let's say a business selling 10 units a day compared to another business selling a thousand units a day if all else are equals.

The one that sells more per day is gon na make more money right or what about the price of your products, the margin of your product? All these factors comes into play, so so why am i sharing this with you? It's very simple: really, because how much money can you make as a trader isn't definite? There are factors in play as well, and that's why, in today's training, right already today's video, i want to share with you what are these factors that you must consider number one? The size of your trading account, so this is something that i think intuitively most of you understand, but somehow you neglect this right and here's. Why? If you have a let's say a thousand dollars trading account and you do an average of 10 a year. You would, you know, get about 100 a year. Okay, that's a 10 of a thousand dollars.

Now, let's say you know you trade, a larger account. Ten percent of hundred thousand dollars - that's about ten thousand dollars a year on average in the long run, and let's see what, if you have a million dollar trading account, the ten percent of it is about a hundred thousand dollars a year. So you can see that the strategy is the same. The returns right in terms of percentage is the same.

The only difference is the size of your account, and that determines right. That has a huge factor right to how much potential catching you can make right. In terms of dollars, so the size of your trading account clearly right plays a huge role. So i'm baffled right whenever traders say you know, oh, if you have a profitable trading strategy man, why don't you keep it yourself and just trade the markets and then like a vacuum, suck everything every cent out of the markets? Well, it's simpler because you need money to make money in this business.

If you have a tiny account like a 50 account doesn't matter what trading strategy that you use right, there's only so much money you can make with a 50, 000 or 500 account small account. Small returns, big account, bigger returns in terms of dollars. Of course, you can take on more risk. You know and risk blowing up your trading account blah blah blah, but that you know we are talking about.

If all else is equal right are equal right size of your account matters number two frequency of your trades okay. So this is something a lot of traders. They don't get it. So i'm going to unexplain this as simply as possible.

Imagine right that you have a trading strategy that has a 50 winning rate and an average of a 1 to 2 risk reward ratio. And let's say you risk one percent of your account on each trade. Okay, let's say you have 10 trades per year. So how much would you expect to make you know after one year? So let's keep things simple.

Let's say you do 10 trades a year, so one two three four five, six, seven, eight nine! Then okay, let's say fifty percent winning rate. Let's say your first: five trades are winners: let's keep things simple, these are the winners and then they started losing trades. So you have an average of a one to two risk reward ratio and you reach one percent on each trade. So if you find winning trades, uh risking one percent on each trade - and you have an average of a one to two risk reward ratio, you will make a gain of about ten percent right for this winners here, for your losers, you'll be down negative five percent.

Okay, so in total you can see that you will be up all right: positive, five percent after ten trades. Okay, so let's say: if you have ten doing about ten trades per year, risking one percent on each trade and with a fifty percent winning rate and a one to two risk reward ratio, you would expect to make an average of five percent a year. Now. Let me ask you what, if you can do 100 trades a year, instead of just 10 trades, then now you won't be making five percent here now.

Your five percent would be fifty percent a year again, or else are equals right same size of your trading. Account same strategy same risk per trade, but the only difference is your frequency of trades. If all else are equals the more trading opportunities that you have right, the more money you can make - and this is pretty much uh - falls into the realm of you - know: high frequency traders, where they know they trade so many times a day and that's you know How they extract all these little edges right in the markets, high frequency trading? Okay, so that's a second thing: you must consider frequency of your trades. The third thing is this: your risk per trade.

So again, let's you know use that same example: 50 winning rate strategy, a one to two risk reward ratio. But this time around you risk 10 of your account on each trade. So again, ten trades, one, two, three, four, five, six, seven, eight nine! Then let's say your first five are winners and your second batch right a loser, so winners right so again, uh you have five winners right. Each time you win, you make an average of a one to two risk: reward ratio: okay, so ten percent risk on each trade.

So each trade that you win - you make twenty percent twenty percent multiplied by five over here is a gain of 100 for your winners and because of your losers, you have five losers. Ten percent risk on each trade. You lose negative, fifty percent, so at the end right, you are positive. Fifty percent in this example - okay, so again, the key thing i'm trying to share over here is that again, the more you risk right in terms of your percentage of your account, the more money you can potentially make.

However, there's a downside to this and the downside to this is your drawdown increases as well. So, generally the more you risk right, the more potential loss you can face because you can see that right now. Your losses here are negative 50, whereas the early example is about five percent. So again the more you risk in terms of percentage, the more you can potentially lose as well, and one final thing to share with you is that average return right is misleading.

So, for example, let me give an example, so this is actually a screenshot of one of my uh portfolio that i a current that i trade right. You can see over here this strategy. In the long run, it does about 20 a year okay, but you can see that over here the past one year it has been up 10, so you can see that it's actually, you know uh below the 20 historical average right that i would expect from this Strategy and here's another account that i trade this one here historically does about 30 a year and for the past one year this one over here has been up about 97, almost 97. So again it's more than uh the historical average.

So, what's the key thing that i'm trying to share over here - and it's quite simple actually is that and no return? Let's say you have a strategy that makes an average of 20 a year. You shouldn't expect right for the next 10 years. 20. 20.

20. 20. 20 under year 10., it doesn't happen that way. It doesn't work that way.

In fact, what would happen is that year, one maybe you're up, let's say ten percent year, two, you might be down five percent year. Three is break even year. Four you're up fifty percent year - five, you might be down, let's say another: two percent year six you're up, let's say seventy percent. Then year seven yada yada, you know the returns fluctuate right from a year to year basis.

Some year you might be down 10 20. You never know, and in the long run when you average out all this return right. That's how you get your 20 average return and that's the truth about trading. So don't expect you know how much someone say you know you can make from trading.

Let's say 20 a year and you think oh man dc i'm going to make 20 for sure right or 21 or 19. No, it's usually pretty far away from the average. That's why we call it variance okay, so so bear this in mind. This is important.

So as a quick recap right, how much money can a retail trader make and the truth is that it depends on a number of factors like how much money a doctor can make how much money an online business can make. How much money trading can make number one depends on the size of your account number two, the frequency of your trades number, three, your risk per trade and finally number four average returns right can be misleading all right. So with that said right, i hope you got some value out of this training. It opened up your mind right to see uh trading in a slightly different light, and with that said, i wish you good luck and good trading.

I will talk to you soon. You.