How Profitable Should You Aim to Be?
I’m reaching out with a serious question about trading profitability. I recently got back into trading after having previously dabbled in crypto a couple of years ago. My experiences were mixed; the volatility of crypto made it challenging for me. I’ve since transitioned to trading CFDs, primarily focusing on the Nasdaq 100.
Since I started in early March, I’ve achieved a profit of 40.1% relative to my initial balance. I’m curious—how does that measure up? Is it considered good, bad, or just average? Personally, I think it’s not too shabby, especially since I primarily engage in very short-term trades with relatively small amounts compared to my overall capital.
My uncertainty stems from my previous experiences with the significant volatility and extreme percentage swings in crypto, especially when leveraging trades.
I’d love to hear from others about what is considered a reasonable profit margin. At this point, I’m not looking to rely on trading as my primary source of income; I’m still figuring out what a sustainable profit ratio is and how much capital I’ll need, since I’m currently only using my own funds.
One response
First of all, congratulations on your trading success so far! A 40.1% return in such a short period is impressive, especially considering you’re trading CFDs on the Nasdaq 100. It’s perfectly normal to feel uncertain about your performance, especially when you’ve come from the highly volatile world of crypto trading.
In the context of CFD trading and traditional markets, a return between 5% to 15% per month can be considered good, with higher returns being possible but generally accompanied by increased risk. Your current returns significantly exceed that range, which suggests that you’re doing well. However, it’s also essential to be aware of the risks involved, especially when trading on leverage, which can magnify losses as much as gains.
Here are some points to consider as you navigate your trading journey:
Risk Management: Ensure you have solid risk management practices in place. This means not risking more than a small percentage of your capital on any single trade.
Sustainability: While a high percentage return is enticing, focus on consistency. The aim is to develop strategies that yield reliable, sustainable profits over time, rather than chasing high short-term gains that may not be repeatable.
Volatility: Moving from crypto to traditional markets like the Nasdaq can feel less volatile, but that doesn’t mean lower returns are unattainable. Finding the right balance between risk and reward is crucial.
Long-term vs. Short-term: If your goal is not to rely on trading as your main income yet, that’s completely fine. As you gain experience, you may also find your comfort level with risk and return evolves.
Peer Insights: Engaging with other traders, whether on forums or in trading communities, can give you more perspective on performance benchmarks and practices.
Ultimately, your primary should be continuous learning and improvement rather than solely comparing your returns to others. If you’re feeling good about your approach and keeping your emotions in check, you’re on the right track! Keep it going, and best of luck with your trading!