Home | Free Email Newsletter | Contact
 


Beginnings

  New Traders
  Compounding
  Starting Capital
  Stock Entry
  Expectancy

Money Management
   Money Management
  Kelly Formula

Newsletter
   Free Weekly Newsletter
  Daily Newsletter

E-Books
  Three Day Hammer
 
Trader's Bible

 
Trading Systems

System Development
 
Where to Start
  Trading Systems

Hall of Fame
   Richard Wyckoff
  Jesse Livermore

Resources
  
Reading List
  Unclaimed Money

Company Info
   Contact

 Free Newsletter
Receive our weekly list of  3 Day Hammer Stocks

  First Name

 
Email

Trading and Compounding

We all want to get rich. And if you want to trade for a living then you better be making money and having it grow. So what’s the secret? It is a very simple concept. You use a trading system that has a positive expectation (see expectancy), give it time and then compound the profits. With most trading methods, you will not get rich overnight. And if any of you out there in trader-land know of an overnight, get rich system … you would not be reading this. But really, given enough time, you will make money and get rich. Trading does require patience. If you have the discipline to work with your system, you will making money.

Compounding money has what is called a “snowball effect”. As your money rolls down the hill it becomes bigger and bigger. Even if you start with a small amount of money or snowball, given enough time, you can end up with an extremely large snowball indeed.

Time and compounding your money will make you rich - if you stick with your system. If you can manage to make 50% a year in your trading, you can grow an initial $10,000 account to over $170,000 in just seven years. Check the below chart for other percentage return of investments.

 

10%

20%

30%

40%

50%

Year 1

 $11,000

 $12,000

$13,000 $14,000 $15,000

Year 2

 $12,100

  $14,400 $16,900 $19,600 $22,500

Year 3

 $13,310

 $17,280

$21,970 $27,440 $33,750

Year 4

 $14,641

 $20,736

$28,561 $38,416 $50,625

Year 5

 $16,105

 $24,883

$27,129 $53,782 $75,937

Year 6

 $17,715

 $29,859

$48,268 $75,295 $113,906

Year 7

 $19,487

 $35,831

$62,748 $105,413 $170,859
$10,000 Annual Return Using Simple Compound Interest
 

I have included a compound interest calculator so that you can determine other rates of return.

COMPOUND INTEREST
Principal Months
1 = .08
2 = .17
3 = .25
4 = .33
5 = .42
6 = .50
7 = .58
8 = .67
9 = .75
10 = .83
11 = .92
Rate
Years
Amount
Interest

Provided by The JavaScript Source
 

Copyright ©2004 ARB Trading | Risk Notice & Disclaimer
Please contact us at: [email protected]


The Financial Ad Trader