Hey

Today's message is a bit different from the normal

I wanted to share some thoughts on a topic I'm passionate about: treating trading as the business it is because there's huge financial impact from doing this

A Core Concern:  Selling Yourself Short

Setting appropriate profit expectations for your trading business is critical

Recently, I was speaking with a trader who was frustrated after being told that “making 10% a year is doing well.” This sparked an interesting conversation about reasonable profit targets, and I realized many traders have limiting beliefs about what's possible.

Years ago, I encountered forum members claiming that “anyone making more than 1% per month is lying.” My immediate reaction was: if you're only making 1% monthly, what are you living on? That's essentially zero margin.

Think Like a Business Owner

In any business, 6% profit is considered the absolute minimum – and that's for any business, from small business operations to large corporations with significant capital. Companies like Facebook operate on 40%+ margins. While trading isn't selling products or services in the traditional sense, we should apply similar performance standards.

If you're not making at least 5-6% monthly from your active trading, you may want reassess your approach – because trading is NOT passive income. You are investing your time, which has monetary value, and the profits from your trading should provide return on your capital PLUS return on your time invested.

The True Formula for Trading Profits

Along with keeping in mind account ROI percentages, I encourage you to also think about your trading like any other business. When thinking about revenue, for any business, it depends on two just key factors:

– Transaction volume: How many trades are you executing monthly?
– Transaction size: How much profit per trade are you capturing?

This simple formula explains why different trading approaches can produce dramatically different results.

I worked with a trader who wanted to make $3,000 monthly with just a $5,000 account – a 60% monthly return! Initially, this might sound unrealistic. However, after analyzing his trading style, we discovered he was day trading with conservative 1% risk per trade but executing 8-10 trades daily. Even with modest profits per trade, his high volume made 60% monthly returns achievable without excessive risk.

Aligning Your Approach With Your Goals

When determining what's realistic for your trading:

If you have ambitious profit targets but want conservative risk management, you'll need higher trading frequency or a larger account.

If you prefer a more relaxed approach with fewer trades, you'll need to adjust your capital base or profit expectations accordingly.

Your account ROI ultimately depends on your trading frequency and position sizing – just like any business. With proper planning and strategy, ambitious goals are absolutely achievable.

Let's Get You Past What's Holding You Back

If you'd like your trading to be preforming better and more up to your goals and expectations, book a call with me so we can explore what's holding you back and figure out the best path forward for you

Trading is one of the few businesses that can thrive regardless of economic conditions.

Let's get your trading business working exactly the way you want it to.

Enjoy

Cheers

Brian McAboy