A popular question asked from the Research Team is "How do I make $XXX per month?" While there are no guarantees in trading, this segment helps a trader run through the math in order to get a ballpark estimate.
There are several factors to consider:
- Amount of
- Profit targets
- Drawdowns, magnitude, and
The first thing to consider is the amount of extrinsic value needed. If we wanted to make $100 a month, we will need at least $100 in premium.2) Profit Targets
If we, we will need at least double the amount we want to make.3) Strategy Success Rate
Depending on the success rate, we will need to take that into consideration. If a strategy has a success rate of 90%, then we will only have success (on average) in 10 or 11 months of the year.4) Drawdowns, Magnitude and Frequency
Drawdowns, magnitude, and frequency of losses should always be taken into consideration.
For more information, watch the segment. Tom said, "Had we had this information when we began our trading careers, our results would have been very different."