Ten Pennies Per Year
My friend Rob Booker who runs a great new website call Trade for Life recently posted an interesting video lesson in which he makes the following point. If you decide to play the violin for 48 hours straight, its doubtful that you will be any good. However if you practice the violin for just 1 hour per day for 48 days in a row, chances are, that you will be a markedly better player at the end of the experiment.
Success in trading depends very much on the same dynamic. It is a journey of a thousand little steps not a get rich quick scheme.
Every year I set a trading goal for myself of ten pennies.
That’s right. Ten pennies a year is all I seek. That may seem laughably small to some of you, but ten pennies is actually equal to 1000 basis points or 10% return. Do that for 6 years straight on 5:1 leverage and you’ll turn 100K into a cool million dollars.
Ten pennies may also seem like a very easy target to hit, but it is actually much harder than it looks. For example when I trade my BK Flow system I will make between 15-25 trades per month and when the dust settles I will consider myself successful if I’ve made 125 cents at the end of the month. That may sound like chump change to you, but that is what successfully trading is really all about.
Most traders enter the FX market fantasizing about turning 10K into 100K in a matter of weeks. The typical result is that they wind up at zero within three months -- which is the industry standard for how fast the accounts burn out.
This massive gap between reality and expectation is one of the principal reasons for why so many novice traders are annihilated by the market. Focusing on the small task at hand rather than the large prize you seek, is the first step to mastering the market.
Ten pennies per year is a good way to put this game into its proper context. It is a modest goal that is nevertheless much more elusive than it seems. Reach it and you will be well on your way to becoming a trading master.
Rob and I will be hosting a free two day webinar this Wednesday and Thursday Februray 15th and 16th where I’ll discuss the specifics of the Flow Strategy. Look for details on my Twitter feed @fxflow.