• Frank Font

Phase One: Starting to Make Some Progress

I have started to diversify the total equity in the account between three or four different assets. I devote a portion of the account to selling poor man's covered calls, which could yield a return of 70% from the premium collected from selling puts. The other portion of the account goes toward executing monthly swing trades. My goal with each transaction is to achieve 10% returns within one month. Assuming I can cut losses quickly and am correct 50% of the time, I should average 5 percent per month, given that my risk to reward is 2 to 1. That would yield a 60 percent return at the end of the year would be 75%. With an average of about 70% return per year over five years, I would have an account worth $274,000. After that, I would aim to reduce overall risk, even if it is at the expense of a higher return rate. If I can perform at such a level over a five- or four-year period, I would look to see if I could intern at an investment bank to invest someone else's money along with my own. That could significantly increase the amount that I can make over my trading career. I think I am slowly starting to make some good progress in developing good trading habits. I have become much more careful with my trades and am beginning to automatically think about what I will do if the trade goes against my way, instead of just believing that a trade would always go my way.

As soon as my mom purchases a new car for herself, I will change jobs after I buy her current car from here. In that manner, I will not be restricted by the time that I can work. It would also be relativity easy for me to find a job that pays $15 an hour instead of $12.65, which is my current rate. The difference in hourly pay would lead to a difference of about $4,000 that could be used towards the trading account. Over a 50-year time frame, and if I work for five years and then achieve an average return of 20 percent, I will increase portfolio value by $2,760,000. There is another reason I will go into the personal blog category.

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