TL;DR: This blog discusses how retail traders can achieve high returns through one good trade per day, emphasizing the importance of risk management, market knowledge, goal setting, and practice.

What is your annual return on investment this year?

The S&P 500 has had an annual return of about 11% since 1957.

If you are making more than 11% per year, you are already outperforming 95% of traders, considering that 90% of traders actually lose money in the market.

But can you believe that there are retail traders who have achieved over +10,000% return in just one year from trading?

The numbers may sound surreal, and it does come with a high risk.

However, with the right risk management and trading mindset, you can achieve the same.

Let’s delve into the details of how.

Step 1: Know Your Product and Market

There are thousands of different trading assets and products available for retail traders to choose from. Before diving into a particular market, you should conduct thorough research on what the market can offer and the risks involved.

The easiest and relatively safe types of investments, such as bonds and stocks, are simple and straightforward. You choose companies with a strong financial foundation, pay some exchange commissions, and as the companies grow, so does your investment. You may even receive dividends.

On the other hand, there is the derivatives market (including forex, futures, options), which offers high leverage.

For example, you can use just 1% of your assets to borrow 500 times the value of your assets. It may seem like a great deal, but exchanges in the derivatives market charge commissions, withdrawal fees, and hidden fees in various ways.

Therefore, the derivatives market is a high-risk, high-reward trading market. The high leverage in this market presents opportunities for traders with a well-established trading strategy and a strong mindset to achieve significant growth.

Step 2: Break Down Your Goals

Let’s quantify your goal. Assuming you start with an initial investment of $1,000 and only risk 2% of your portfolio for each trade. If you can win a 20% trade on each day over the 250 trading days this year, you will see a 171.3% growth in your portfolio by the end of the year.

Now, let’s assume you take a 100x leverage on your trades. This means you only need to capture a 0.2% move on an asset to achieve your goal.

Step 3: Control Your Risk

Once you understand the basic framework of almost tripling your account every year, you can start adjusting your risk by changing your percentage of risk in each trade, your leverage, or your reward ratio.

These three elements significantly impact your expected profit and the power of compound interest.

For example, if you decide to risk 50% of your portfolio every time for a 0.2% move with 200x leverage on each trade, it means you are achieving a daily return of 20%. Consequently, one year from now, your return would be tremendous.

However, the greater the reward, the greater the potential loss. Increasing your leverage and risk makes you more susceptible to blowing your account when emotions come into play.

Step 4: Practice

This is perhaps the most crucial part, as good traders require experience. The more experience you have, the more adaptable you become during shifts in market trends or crashes.

Always start with minimal risk at the beginning to learn valuable lessons. Overtrading and forcing trades can easily lead to losing your entire account.

Start small with an amount that you can afford to lose.

Trading is a marathon, not a sprint. It tests your ability to endure and stay in the game for the long haul.

If you want to learn more about trading strategies for achieving high growth, read our other blogs and subscribe to our YouTube channel for different trading ideas that will help you find success in trading.

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Disclaimer: The information provided in this article is for educational purposes only and should not be considered as financial advice. Trading involves risk, and it is important to conduct thorough research and seek professional guidance before making any investment decisions. Prospective investors are encouraged to perform their own due diligence or consult a financial advisor before making investment decisions.