How much money can you earn daytrading?
Many ask us how much you can earn daytrading. Of course, there is not only one answer to that.
But let’s do a calculated example:
If you can earn 10-20% a year in return, with ordinary equity investments, it will cost you a million kroner to give you an annual return of 100,000-200,000 kroner. It’s a great return and a lot of money, but not enough to survive for most people.
As a good daytrader, it is not impossible to earn 5-15% in returns per month (resulting in greater risk), which in one million gives about 50,000-150,000 a month. Conversely, most people will be able to survive on a monthly income at that level.
The big difference between returns on equity investments and daytrading makes it possible to live off the capital at much lower levels.
Is it unrealistic to make a return of 5-15% per month?
It’s far from all daytraders that perform in that earnings class, but with the right tools and a concentrated and long-lasting effort to learn the subject over at least 6-12 months, it’s not impossible at all. But it probably costs some tuition along the way.
In our article series about Danish daytraders, several have mentioned that they are on this monthly level. Our writer at DaytraderLand.com – Hans Henrik Nielsen – also made 134.7% return in 2015 with the 5/1 method by just daydreading a couple of times a week.
Gearing makes a big difference
The advantage of daytrading is that you can gear your capital and thus have the opportunity to trade for, say, 1 million kroner, although you only have 100,000 DKK to invest for.
Your risk profile thus becomes paramount for your return.
This kind of gearing is of course also subject to great risk as you risk losing more money than you have. Unfortunately, there are many examples of people who have completely overridden their finances by dealing with excessive gearing and overtaking risks. It is therefore important that you always check with your broker and trading platform if you can risk losing more money than you have deposited in your account. We recommend that you trade only with brokers where you are sure that you cannot lose more money than your account balance.
We recommend that you read this article to see what compound interests can be over time.