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Summary of the Week: How to Earn 100,000.00 Per Year on a 10,000.00 Account

September 10, 2010

Now we have posted actual trades and results for the past 5 days this week, February 11 through February 16. The results attest to the premise stated at the outset of formulation of this blog. We have presented the outline of a very simple trading method, structured in a format which emphasizes ease of execution, with facilitation of perception of the overall context of the trading day. Utilizing a very conservative strategy with priority given to “never letting a winner turn into a loser”, we are showing examples of actual real time trading,  with an extremely high degree of accuracy (long term, in the 98-99% range), and the capability for attaining a 6 figure income, trading only 2 contracts per trade, on a very small account.  We approach this goal with a plan based on a realistic and conservative framework, capping our trading each day when the modest goal of 600.00 is attained. This allows for some sessions to end early, completing our “work day” sometimes within the first 2 or 3 hours of trading. All aspects of the plan and trading strategy are designed to expend minimum effort, on each trade, and on each day, and over the long term. This framework is employed to make the annual goal more realistically attainable.

The 6 figure income is shown to be feasible without adding to risk size at any time. The same 2 contract strategy is employed, with the very attainable target of only 600.00 gross per day. After commissions, we expect approximately 480.00 to 500.00 per day, for a net of approximately 2500.00 per week. (Note, some days, profits will exceed 600.00, as the last trade may result in a “bonus” profit.)  Factoring in holidays, 47 trading weeks add up to 117,500.00 annually. Or 240 trading days add up to 120,000.00. Or some mistakes, leading to more trades, and commissions, might lower the net to 110,000.00. All these things are variable, depending on personal objectives, but the method offers the realistic outstanding outcome. It does so with an ease and absence of stress, in contrast to many other approaches to trading. These claims and possibilities are supported by our real time results, as demonstrated in the charts with all executed orders, posted here each day this week, after trading.

Monday: 14 trades on 28 contracts, no losers, 600.00
Tuesday: 16 trades on 32 contracts, no losers, 750.00 (Last trade, exited for excess profit.)
Wednesday: 12 trades on 24 contracts, no losers, 600.00
Thursday: 14 trades on 28 contracts, no losers, 650.00 (Note added trade after post.)
Friday: 13 trades on 26 contracts, no losers, 600.00

Results for the week:
69 trades, on 138 contracts, with no losers.
Gross profits total: 3200.00

Net after commissions: 2609.36 (4.28 per round turn) (Note, typical example of how the 2500..00 target can be exceeded)

Some further clarification of our method. An examination of the trade by trade order execution will reveal the entries and exits each day. An astute observer will notice some orders with consecutive trades on the same side at different price levels. A small part of this trading strategy allows for “scaling” into some entry zones. This might occur on average once every day or so. This means the exit will be at a point which ensures profit on the entire averaged position, which may include 2 or 3 entries of 2 contracts each. We consider that to be one trade, as the strategy incorporates that as an entry with an intended objective. (This also means the earliest contracts may be exited at a deficit, but the overall trade will be profitable.) This also can be construed as aggressive money management, if the account is only 10,000.00. Even though most firms will allow 20 contracts on day trade margin, for a 10,000.00 account, 6 contracts can be considered quite aggressive by conservative standards. If one feels that way, starting with 20,000.00 should ease that concern. If so, then you have to settle for a 6 figure income on a 20,000.00 account, still not so bad. (But again, this entry strategy is employed with less frequency, and time in trades is usually very brief. The bottom line is evaluated based on 1000′s of real time trades, giving me personal confidence in the method. Everyone should backtest and possibly simulate trades for that same confidence.)

On  another positive note, examination of the trade by trade order execution will reveal no losses, and also only 2 or 3 break evens, for the week. On average the method only incurs about 1 or 2 break even trades per week. That means very few “wasted” trades, with attendant expense of commissions. Many trades are exited with 2 ticks profit, 50.00 on 2 contracts, minus 8.56 commission. Most days will also include trades exited with 4-8 ticks profit, in the 100.00- 200.00 range. When those occur, the trading day ends quickly. Again, the method is designed for ease of every phase of the plan, trade by trade and day by day. Time in trades, exposure to market risk, is very brief, with the decision making process minimal, very focused, and free of stress. All in the context of a perception of the day as a whole, guiding the specific entries and exits.

Finally, we started the blog last week, with Friday’s trades. As you can see, it was more of the same, so don’t think this week is some fluke. Part of the motivation to put up this blog is just a reaction against the constant inundation of marketing stuff, I get in my email box each day. They say things like, “follow the trend”, “you have to learn to take lots of losses”, “be willing to take lots of losses, but let your profits run”, “even a losing percentage system can be quite profitable”, “compound your trade size for the real secret of trading riches”, etc. All kinds of things that I could never do. All the system vendors, trading mentors, forecasters, and all other assorted experts make so many claims and pronouncements about what is the “right way to trade”.

I disagree with so much of what I see out there, I became motivated to put up some real time substance to get in my own two cents worth. I like trading to be fun, not stressful. I don’t like having lots of losses, and steeling my will to persevere for the grand overall outcome. I don’t like to be up in a trade and have it turn around and run against me. Especially i don’t like to watch this happen frequently, so I can ride the rare long runners. I don’t like to enter on stop, get filled , and watch my fill be the exact place the market turns. I don’t like to have to figure out what is the trend in the constantly gyrating indexes. In fact, I don’t like to have to be a genius, use complex indicators, and figure out where the market is going all the time. I do like to just plug in, make money almost every trade, and every day, with new equity highs each day, with minimal anxiety and stress. It doesn’t have to be so hard. Just use a plan which eliminates fear and greed, and emphasizes the most obvious variables identifiable, and settle for very modest objectives on every trade, and on every day. Before you know it, high accuracy, low risk, with new equity highs each day, add up to a great way to make a living.

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