Thinking of trading the markets yourself? And wondering… can I beat the market?

This is a complicated question but here are some thoughts: It depends on a couple of things:

  1. Your available capital
  2. The margins you get from your broker
  3. Your knowledge of the market and trading strategies
  4. Your discipline to treat trading as a business

Given a reasonable positive answer to those questions – there is no reason one cannot return 2-3% of capital a month. Trading is a very fluid animal. And yes, of course it is risky. A good trader will try to reduce risk as much as possible. And increase the probability of a trade as much as possible with the information available.

Money and risk management is key. Only risk 2% of capital on each trade. Only trade up to 60% of your capital or margin. Losses are expected. Also.. to find the golden goose is not practical. Building a portfolio is better, then some trade losses can be offset by winning trades.

It also depends on your needs. If you need to take profits out of the trades – that is ok of course but then you cannot expect to increase your capital. If you trade to increase capital – then you will enjoy the exponential growth because the higher the capital the more you can put in per trade.