Compound Your Trading
There is only one way to profit in the market. You must apply a systematic approach over time, compounding as you go. Don’t be so naive to expect you will get rich overnight. Remind yourself that patience is a virtue when it comes to trend following.
You must have the discipline to work within the structure of your system. For example, if you can manage to make 50% a year in your trading, you can grow an initial $20,000 account to over $616,000 in just seven years. Trust that time and the power of compounding will take over if you stick with your system. You think 50% is too unrealistic for you? Do the math again using 25%. In other words, compounding is essential.
|
30% |
40% |
50% |
|
|
Year 1 |
$26,897 |
$29,642 |
$32,641 |
|
Year 2 |
$36,174 |
$43,933 |
$53,274 |
|
Year 3 |
$48,650 |
$65,115 |
$86,949 |
|
Year 4 |
$65,429 |
$96,509 |
$141,909 |
|
Year 5 |
$87,995 |
$143,039 |
$231,609 |
|
Year 6 |
$118,344 |
$212,002 |
$378,008 |
|
Year 7 |
$159,160 |
$314,214 |
$616,944 |
Successful traders and investors are psychologically prepared to stick with their system through good times and bad. You will never reach your goal as a trader if you can not maintain the self discipline to trust the rules you have chosen. Follow your trading rules. Rules that work mean your trading goals can be achieved. If the rules don’t work for you then change the rule to make it work for you.
