Link: $400 per day – Luxury!

Sep 22, 2007: 7:47 PM CST

Dr. Bruce Hong at the Trader Psychology blog recently provided the interesting thought on what it’s like to live on $400 per day – did you know you could live just like a typical physician?!

That’s right. Dr. Hong details what a median physician salary breaks down to daily terms, and arrives at the figure $400 per day. Could you live on that? What would your life be like if you could attain that amount?

In trading, we tend to get lost in the forest, especially when thinking about profits and annual goals. We may think in terms of percentages or dollar figures, but very few traders actually break down their profit goals to daily goals – at the same time, not all traders need to do so (why would an investor or position trader need to know this?).

However, if you are an active trader trading reasonable size, it might be feasible to analyze what your returns equate to in terms of comparable salaries, broken down to daily values.

How might you make $400 per day?

  • Net 20 cents trading 2,000 shares through one or more positions per day
  • Net 40 cents trading 1,000 shares through one or more positions per day
  • Net 80 cents trading 500 shares through one or more positions per day
  • Net 80 Dow Points trading only one @YM Dow-Mini futures contract (at $5 per tick)
  • Net 80 Dow Points trading two @YM Dow-Mini futures contracts per day
  • Net 20 Dow Points trading four @YM Dow-Mini futures contracts

These are just a small number of ways you can achieve $400 per day consistently. Netting 20 cents in any stock or ETF per day is extremely easy – let’s be realistic. It’s ‘slinging’ around that ‘two thousand’ share part that really plays with our fears and psychology. I know I feel ‘better’ trading 500 shares rather than 2,000 shares in a position, though the position and set-ups I use are the same. That’s part of the reason they say “trading is a head-game”. We must first learn the basic concepts and master them, and then size should not bother us, provided we’re managing risk properly.

I have heard one major trader education say that a beginning trader can make a living only trading bull flags. Perhaps, and indeed it could be done. All you need is to know your particular set-up inside and out and trade reasonably with risk management (meaning don’t “bet the farm” and don’t hold onto, or average losers).

Go over to the Trader Psychology blog and see what $400 per day means (it means roughly $120,000 per year!).

Also, review Dr. Hong’s follow-up article to $400 per day, including numerous brief bullet-points that assist you in this line of thought.

1 Comment

One Response to “Link: $400 per day – Luxury!”

  1. psychology websites Says:

    thanks for this good resource!