can you make/compound 30% a month trading futures?

#1
I was looking at some excel sheet calculation . if you start with a capital of rs 1 lakh and trade only tata steel futures and keep on compounding 30% each month you will make over rs 5 crore in 24 months/2years. Now i know this is in any way not realistic because making 30% month after month is highly unlikely and 99% chances are bankrupting the account but just lets assume if you are only trading tata steel futures which requires you to have rs68,000 (approx) for trading 1 lot. 1 lot will give us 1000rs /profit loss on each point so you will require to gain 68 point each month to make 100% percent return and to gain 30% you would require 20 points each point to make 30%. but i don't think compounding will work here because of the leverage provided by nse. Suppose the first month you gain 30% on rs 68,000 so your total gross profit will be rs 88,000(lets exclude commision and tax). but the problem is in order to compound you need to trade more than 1 lot on this rs88,000 to compound but you can't trade more than 1 lot until you reach rs 1,36,000(2 lot) because to trade 1 lot u need = 68k and 2 lot 68 x 2 = 1.36 lakh. So how is compounding possible ? when you have to make 100% return on 68k to trade 2 lots

compounding 30% each month on 1 lakh

130,000 24,706,453
169,000 32,118,389
219,700 41,753,905
285,610 54,280,077
371,293
482,681
627,485
815,731
1,060,450
1,378,585
1,792,160
2,329,809
3,028,751
3,937,376
5,118,589
6,654,166
8,650,416
11,245,541
14,619,203
19,004,964
 
#2
................... ohhh god one more excel ................... :fatigue: ................... here we go again ...................








but if you want to do it ................... why stop at 2 years ................... use compounding for minimum 20 years ...................and see the fun
 

chilgu

Active Member
#4
................... Ohhh god one more excel ................... :fatigue: ................... Here we go again ...................

But if you want to do it ................... Why stop at 2 years ................... Use compounding for minimum 20 years ...................and see the fun
how one can control his emotions after 3 consective months or when stop loss triggered after series of profitable trades.
 
#6
................... ohhh god one more excel ................... :fatigue: ................... here we go again ...................








but if you want to do it ................... why stop at 2 years ................... use compounding for minimum 20 years ...................and see the fun
In 20 years we will probably have more wealth than the entire real estate of the world.....with Bill Gates,Warren Buffet and all Indian tycoons coming as free gifts....:D

Smart_trade
 

sumosanammain

Well-Known Member
#8
There are two types of traders , one who counts money in excel , other counts money in bank ;)
But there is only one kind of successful trader.

The one who first counts his money in excel.

Without a goal, you arent going to reach anywhere.

And " I want to make 5 crores by 2014 " is not a goal.

Trades marked in excel, when kept at sensible levels, at least make you answerable to yourself.
 

onlinegtrash

Well-Known Member
#9
classic excel blindness of excel-traders :)

they count how compounding takes you forward but
totally fail to see how reverse compounding drains their wealth
faster than compounding forward movement!

if it takes 24 months 30% compounding of 1lac to reach 5 crores

how many months it will take you to travel back to 1 lac from 5 crores, with 30% losing everymonth!

its 17.654 months. i.e 6.5 months faster... to travel backwards.

In practice its way way way worse... with 2 yrs time if you make any blunder
losing more than 50% capital in any month its only 15 months backward walk...
if you commit two such blunders for 2 years its only 13 months backward walk
negating your 24 month forward walk!

so... just like how compounding is super sexy and enticing we have
more devilish reverse compounding waiting to happen, if you don't know how to
walk the ropes!

Ofcourse no one is going to win or lose continuously for 12 months,
above example is just a comparison between two forces (i.e forward and reverse compounding) keeping everything else constant.
Reverse compounding keeps the stray excel sheet traders from buying out the planet :)!
Thanks for reverse compounding!
 
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