"I want to be able to sustain my life going forward because I trust and believe in the platform you’re using i.e Red Hot Storm Trader.
Please kindly advise with what I need to do to be able to make 50k a month, I'm tired of the depressive life I'm living"
In today’s article I’ll be answering this question in more detail and with the relevant steps you’ll need to calculate how to make R50,000 a month with trading.
7 out of 9 Winning Trades and Counting!
That's right, since the 1st of January 2019 this system has pulled in 7 out of 9 winning trades!
The rate of winners over losers currently stands at an unbelievable 77.78% for the year and it's about to get better... News from the market indicates our most recent trade is set to take off.
What you’ll need to make R50,000 a month trading
To calculate how to make R50,000 a month trading, you'll need to know what portfolio value you'll need to start with, based on the historical track record's performance on your trading strategy.
You and I both know we can't guarantee future results based on historical data. But with a historical track record of 10 years or so, it will give you more of a likelihood of what you can expect to earn per month.
When you have a proven historical record, you’ll need the following metrics to calculate how much money you’ll need in your portfolio to make R50,000 a month.
Metric 1: Risk percentage per trade
Metric 2: Gain percentage per trade
Metric 3: Number of expected winning trades per month
Metric 4: Number of expected losing trades per month
Here is an example with a few normal trading metrics…
Metric #1: 2% Risk per trade
Metric #2: 4% Gain per trade
Metric #3: 5 Expected winning trades per month
Metric #4: 3 Expected losing trades per month
First we know the win rate on this trading system is 62.5% (5 Winners ÷ 8 Total trades)
Next, we’ll use the four metrics to calculate what the average net percentage gain, you can earn a month.
Total expected gains and losses a month
Total gain percentage per month = (5 Winning trades X 4% Gain per trade)
= 20% expected gain in a month
Total loss percentage per month = (3 Losing trades X 2% Loss per trade)
= 6% expected loss in a month
With these metrics your net average gain on your portfolio will be around 14% a month (20% monthly gain – 6% monthly loss).
What portfolio value you’ll need to bank R50,000 a month
Finally, you’ll need just one more formula to calculate the portfolio value you’ll need to bank R50,000 a month.
Portfolio value = (Expected amount ÷ Net average gain % a month)
= (R50,000 ÷ 14%)
This means, to make an average R50,000 a month trading, with the above metrics, you’ll roughly need around R357,142 in your portfolio.
You could be one step ahead of the average investor every time you make a decision
Look around you. Taxes are rising, independent, unbiased financial advice is disappearing, and mis-sold pensions and equities are taking their toll on people’s savings. In any given year, less than 20% of the more than 800 unit trusts in South Africa beat the market for their investors. So much for the abilities of ‘experts’.
Now more than ever, due to the current economic landscape, it’s only those with access to specialised knowledge and expertise who will really prosper in 2019 and in years to come…
What if you don’t have R357,142 to deposit?
You can use the above steps to calculate any amount you can expect to make per month…
Maybe you’d like to bank just R5,000 or R2,000 a month. Either way, we all have different portfolio values, trading systems and expectations.
“Wisdom yields Wealth”
Analyst, Red Hot Storm Trader
Know how much money you’d like to make per month? Great, join Red Hot Storm Trader
to start banking your profits on a monthly basis.
If you have an in-depth trading question that you believe will not only help you but many other traders, feel free to email me at email@example.com
and you’ll stand a chance to be featured in one of the Trading Tips