“Compound interest is the eighth wonder of the world. He who understands it, earns it... He who doesn’t... Pays it”.
The idea of compound interest is simple, use your profit to make more profit instead of spending it... You can do this whilst making small regular withdrawals!
BUT
Too many traders try to get-rich-quick and in turn blow their trading account.
Instead of focusing on medium to long term returns and make their profits do the work.
Every trader knows that it is possible to turn a small amount of capital into 6 or 7 figures if they trade patiently. However, most of them always look for a faster way to become wealthy by oversizing positions to seek out a lottery win. In fact many traders repeat this process multiple times, with the exact same end result... Blowing their account.
This is why I have written this post, which is primarily aimed at all of the traders starting with a small amount of capital £1,000 or less... You need to start setting monthly % targets.
Everyone wants to make a million, that's a common fact but how are you going to get there? What monthly % do you need to grow your account at and over how many years?
You need to start mapping out your journey, track your progress and be measurable.
The illustration shown highlights the potential growth within a 12 month period using a starting capital of £1,000, growing your account by 20% per month and withdrawing £50 every single month.
If you can maintain this level of growth throughout the year, you will have withdrawn £600 and have a trading account value of £6,937.
And it all started with £1,000 :)
To round off this post I truly hope this explained the power of compound interest.
I am available via private message for any questions you may have.
This is now my way of trading. I prefer less short times (1-3 days) with lesser % gains.
I absolutely agree with your thoughts ! :-)
LewisGlasgow
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@mdomanin, that's a great way to manage your account, thank you for commenting!
Adap5ive
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Its a stsrting point to work with
LewisGlasgow
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@Tims3ch0, indeed! It's a shame it's not as easy as just setting targets :)
NKS1313
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LOVE THIS “Compound interest is the eighth wonder of the world. He who understands it, earns it... He who doesn’t... Pays it”. This is the first wonder of the world that I visit in my life. :P Thanks for sharing.
LewisGlasgow
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@KAH Shiuan Chin, I love it too! You're more than welcome, thanks for commenting :)
TraderFX1980
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Great post! My goal is to grow my account by 2-3% per day. If I am able to do that (which I have so far. I did 29.3% last week risking 2% every trade), considering there are about 250 trading days in a year, at the end of the year, if you deposited say $500 into an account, your account balance would be around $70,500 to $809,500, respectively. That's true power!
LewisGlasgow
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@jhmcclain, appreciate it mate! It's great to see a trader who sets targets and doesn't just trade blindly, congrats on your results so far.
It would be interesting to see how your account develops over a 6 month period. But I agree, that is true power!
TraderFX1980
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@lewglasgow, Thank you. It sounds like you have a solid grasp on this idea as well. It takes a lot of discipline and knowing how to use proper lot sizes. If I remember, I will post results in 6 months. ;)
LewisGlasgow
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@jhmcclain, It's something I focus on when trading, I believe it should be utilised. I agree 100% without discipline day in day out you will not see consistent returns! Keep me posted :)
I absolutely agree with your thoughts ! :-)