Why Most Traders Can Make $1,000 But Not $100,000 (2024)

Despite being able to make $1,000 or $5,000—depending on starting account size—over and over again, most day traders end up being like a recreational fisherman who catches a fish but then throws it back. Professionals, on the other hand, make $1,000 and then make another $1,000, and another, drawing an income from their trading or growing their account. The primary difference between the two may come down to overcoming common pitfalls and going from inconsistent to consistent.

Key Takeaways

  • Most traders are more effective when they’re focused on each trade at hand rather than always keeping an eye on big picture.
  • Day traders should only trade for up to two hours a day to avoid becoming mentally tired and making mistakes.
  • Focus on the immediate task during those two hours. Don’t daydream and fantasize about huge returns or making a killing.
  • Consistency is key. Gains in small increments are more likely and can be just as profitable over the long term as a roll-the-dice windfall.

Focusing on the Wrong Thing

As a trader, your goal is to focus on the task at hand and not get caught up thinking about how big your account is or isn't. In trading, your purpose is to execute the entry exactly as practiced, place your stop loss where it is supposed to be, and adjust it accordingly—if needed—and take profit when your trading plan dictates.

As soon as you start thinking about money, your emotions get involved. You take profits too early, or losses to late. You may avoid valid trades or take trades that aren't valid. Your focus may shift away from the only thing that can consistently make you money—following your plan.

The following problems are all related to being focused on the wrong thing but may disguise themselves in other ways.

Short-Sighted Thinking

Traders lose focus because they get stuck in a short-sighted mode. Suppose you want to get in shape, so you start going to the gym. You go for a few days but don't notice any results. You're sore, but you don't look any better. So, you stop going—you don't see the results you want. A few months go by, and you do the same thing, then quit. This routine repeats until you give up altogether or eliminate your short-sighted thinking.

When your focus is on immediate trading results—not process—you'll continually lose whatever money you make. If you start trading to make some quick cash, and do, you're still in trouble. As discussed above, your focus is still on the wrong thing. Whether it's the gym or the markets, your focus needs to be on implementing and managing your plan on every single trade, every day.

If you do the right thing (follow your trading plan and make it your sole purpose to execute that plan flawlessly), your long-term goals will take care of themselves.

Fear, Greed, and Other Psychological Issues

It takes less than five seconds of actual physical activity to open and manage a trade (set orders and adjust them if needed). Make five trades in two hours, and you have spent probably about 25 seconds doing "actual work." The rest of the time, you're tinkering around or thinking. That's almost 7,200 seconds where you aren't trading but have the opportunity to mess up if you're not focused (and that's only for two hours; trade all day, and you have loads of seconds of where a slight lapse in focus can ruin a trading day).

This extreme focus is why we recommend day traders only trade for about one to two hours at a time; holding your focus for two hours is hard enough. Try to do it all day, and you'll start making mistakes.

Thinking is good while trading, but it should be laser-focused on how you will implement your plan under current market conditions. If you start thinking about how much money you are up or down, that car you want to buy, overdue bills, your losing day yesterday, or the insane winning streak you're on, you're already off track. It doesn't mean you'll lose your next trade—the market can produce lots of random winners—but you are in a state where you're more likely to give the money back.

Nearly all psychological trading issues can be handled by removing other thoughts except for implementing the plan. Make no mistake, this is also very difficult to do. The mind is constantly wandering. As soon as it does, bring it back to focus on the task at hand. The more you do this, the better you'll get at it, the more focused you'll be, and the less likely you'll be to give back your gains.

Research, Plan, Repeat

Most trading issues can be linked back to focusing on the wrong thing. Traders get overwhelmed thinking about various things—often money or immediate results. Many of us are taught that thinking about these things is good—it keeps us motivated.However, it is all just mental wheel-spinning.

As a trader, your only job is to research and test a plan as best you can. When you prove to yourself that you can trade it properly, focus solely on implementing that plan. In your off time, you can think about anything you want, but when you sit down in front of your computer to trade, continually bring your mind back to implementing your plan precisely. Doing that is the only way to continually produce the income your plan is capable of producing.

Frequently Asked Questions (FAQs)

How much does the average day trader make?

The amount that a day trader can make in a day is mainly dependent on their strategies, how they handle risk, and how much time and energy they can devote to it. It's entirely possible to make 5%-15% per month or more, but it isn't always easy. Developing and refining your strategy so that you have winning trades more often is the first step to making more as a day trader.

How can I get better at day trading?

Three actionable steps you can take today include creating a trading plan, adding in a routine, and consistently reviewing trades. As with any goal, creating a plan maps out where you want to be and how you will get there, and a trading plan is that plan for day traders. If you know what you need to do to get to where you want to be, you'll be able to focus and keep yourself from being distracted. After making a trading plan, combine it with a daily routine to have a solid base where you can consistently get into day trading mode and work toward that big goal from your plan. Part of this routine needs to include reviewing your trades, which can help you identify what is and isn't working so you can make the appropriate changes.

What is the S.C.O.R.E. Method?

The S.C.O.R.E. Method comes from Jim Fannin's book "S.C.O.R.E. for Life." It focuses on five traits that can help better your life. While the book doesn't concentrate on day trading, the methods can apply to day trading. The acronym stands for Self-Discipline, Concentration, Optimism, Relaxation, and Enjoyment. These are all mindsets that a day trader should try to adopt into their day-to-day practice to improve their experience and outcomes.

Why Most Traders Can Make $1,000 But Not $100,000 (2024)


How much can I make trading with 100k? ›

It's common for experienced traders to aim for a monthly return of 3-5%, although this can vary significantly. For the purpose of this example, let's consider a conservative estimate of aiming for a 1% return in a week. 1% of $100,000 is $1,000. Therefore, the trader's goal would be to earn $1,000 in a week.

Why do day traders make great returns but aren't millionaires? ›

Another reason there are few day trading millionaires is that very few succeed at day trading in the first place, and it takes a long time to master. Aside from the statistical improbability that all good traders can be millionaires, there are other more tangible reasons why even great day traders aren't millionaires.

Is 1000 dollars enough to start trading? ›

Believe it or not, you can start forex day trading with $1,000 or even less. It requires mastering position sizing and managing risks, but if you navigate your way to success, the rewards can be significant.

Why 90% of traders lose money? ›

One of the biggest reasons traders lose money is a lack of knowledge and education. Many people are drawn to trading because they believe it's a way to make quick money without investing much time or effort. However, this is a dangerous misconception that often leads to losses.

Can you make $5000 day trading? ›

It is theoretically possible to make $5,000 a day in day trading, but it's essential to understand that day trading is highly risky and not a guaranteed way to make money. Many day traders incur significant losses, and only a small percentage of them consistently profit from day trading.

Can I be a millionaire by trading? ›

In conclusion, while it is possible to become a millionaire through forex trading, it is not a guaranteed path to wealth. Achieving such financial success requires a combination of education, skills, strategies, dedication, and effective risk management.

Has anyone ever gotten rich from day trading? ›

In summary, if you want to make a living from day trading, your odds are probably around 4% with adequate capital and investing multiple hours every day honing your method over six months or more (once you have a method to even work on).

Why do 95% of day traders lose money? ›

The emotional aspect of trading often leads to irrational decisions like panic selling. When the market moves unfavourably, many traders, especially those who are inexperienced, tend to panic and exit their positions hastily. This panic selling often occurs at the worst possible time, leading to significant losses.

Why are most traders not profitable? ›

Not having and not following a trading plan is a big reason most traders fail. People without a plan are making an assumption that they are smarter than people who do this for a living, and therefore they don't need to prepare, plan, or practice.

Can I make 1k a day trading? ›

Is it truly possible to earn 1000 rupees per day from the stock market with a capital of 100,000? If you go for 1k profit daily you will most probably end up losing money. I would urge to focus on not to lose 1k daily. Possible ,but not easy.

What is a good amount to start day trading with? ›

A risk/reward ratio of 1-to-1.5 is fairly conservative and reflects the opportunities that occur all day, every day, in the stock market. The starting capital of $30,000 is also just an example of a balance with which to start day-trading stocks. You will need more if you wish to trade higher-priced stocks.

Is $10 enough to start trading? ›

It is possible to begin Forex trading with as little as $10 and, in certain cases, even less. Brokers require $1,000 minimum account balance requirements. Some are available for as little as $5. Unfortunately, if your starting amount is $10, this may prevent you from getting the higher quality, regulated brokers.

How many traders go broke? ›

Risks of day trading

Success rates among average traders are even lower, with some estimates suggesting the number of people that lose money is as high as 95%.

Which type of trading is most profitable? ›

The defining feature of day trading is that traders do not hold positions overnight; instead, they seek to profit from short-term price movements occurring during the trading session.It can be considered one of the most profitable trading methods available to investors.

Why 99% of traders fail? ›

The most common reason for failure in trading is the lack of discipline. Most traders trade without a proper strategic approach to the market. Successful trading depends on three practices.

How long does it take to turn 100K into a million in stocks? ›

That's a result of price appreciation and reinvesting dividends. If you take your $100,000 and put it in an S&P 500 index fund, you could end up with over $1 million within 24 years if the index produces returns in line with its historical average. If you keep saving, you can get there even faster.

Is 100K enough to start investing? ›

A $100K windfall can help you secure your financial future, but not everyone is comfortable deciding what to do with that much money. If you don't have the time, interest, experience, or confidence to build a diversified investment portfolio, a robo-advisor or financial advisor can help.

How much can I make if I invest 100000? ›

Annual compound interest earnings:

At 4.25%, your $100,000 would earn $4,250 per year. At 4.50%, your $100,000 would earn $4,500 per year. At 4.75%, your $100,000 would earn $4,750 per year. At 5.00%, your $100,000 would earn $5,000 per year.

Can you make $1000 a day with day trading? ›

Even a price increase of 10% in a single day is very uncommon. In order to make $1,000 in a day on a stock that increases 10% in a day, you would have to invest $10,000 in that stock. If you wanted to trade on margin, you could invest a little more than $5,000 and still make $1,000 on that trade.


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