Tons of Money Day Trading in a Cash Account
Now, let's see what happens if we don't trade with margin, and only trade our own cash:
- Year 0: $2,000 ($2,000 x 1.678 =
- Year 1: $3,356 ($3,356 x 1.678 =
- Year 9: $210,939 (Increase of $85,230 from Year 8)
Without using margin, in only 8 years
we turned $2,000 into $125,709. From this point on, in year 9 you
would be able to turn that money into $210,939. Compared to year 8,
that's a $85,230 gain which means that if you spent that $85,230
(because you decided to quit your job and just day trade once per
week instead), then you would be able to generate that $85,230 every
year from your $125,709 account balance.
And this is without using margin!
While actual results will vary
significantly, theorizing day trading gains with an effective
strategy like aiming for only 1% gain per week shows how long-term
professional day traders are able to make a living and earn a
significant yearly income just from day trading.
What About Trading Fees?
Most brokers charge anywhere from $5 to
$10 per trade, which would reduce how much you actually gained on the
trade (it would be less than 1% once you took out the fees). However,
these calculations ignore the cost of trading fees because there is a broker that offers $0 Commission.
Stocks vs Forex: Why Trade Forex?
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