What is a Realistic Return for a Day Trader?

To earn 5 percent consistently while day trading or get a job at McDonald’s, that is the question. A realistic return can be difficult to pin down, as 'realistic' hangs upon many factors such as market movements and trader skill. As one trader put it, getting 5 percent a day is not impossible but only few traders earn this percentage consistently. Another viewed 5 percent as too high, and that 0.1% is a more realistic figure.

Consider the following factors that affect day trading as well: market volatility, your attitude to risk, and your market experience. Sometimes the market trades in a very narrow range, which is not good for day share trading. You may gain 2 percent today, but lose 3 percent tomorrow. Then you make 1 percent the next day, and lose 10 percent the day after.

One trader recommended having a monthly goal rather than a daily one, as the profit distribution curve is abnormal for day traders (with the vast majority of traders making around less than 5 percent daily and 0.01 percent profiting). Often, realistic return boils down to 'the best risk manager wins'.

A trading plan will help you set returns. Figure out how much money you want to earn to make a living out of day trading. Next, identify which markets you want to trade, and the average daily market movement. Work out what percentage you need to take from the range to meet your goals (or if you can consistently take that much).

Set specific goals if you want to measure yourself, then adjust your trading plan accordingly.