I have received this question at least 47 times today so I will answer it in one big whack! “What would you say would be the minimum account balance in order to cover the cost of the auto trader itself at the least every month?”
First and foremost, I would say… Start with DEMO!!! Don’t ever take anyone’s word for anything until you have tried it out yourself. Trying something may take a little time or a little money but then later on, you will know what works and what does not. I will give you 2 examples to look at about covering costs in a minute but first…
Many traders are looking for that edge and this is what we provide. Our auto traders have been designed in the past to take trades on your behalf and in your account with light maintenance. Sometimes, this maintenance has proven to be a bit more than expected so we set out to code almost every scenario in so that you would no longer need to maintain it every day.
This has seemed to have been accomplished with the great work of Terry, Chris, and Matthew. We now have 2 auto traders that require almost no maintenance. In other words, You can turn it on and let it run 24 hours per day… until further notice when the market changes drastically.
In November so far, you have seen that the 2 newest, hands off auto traders have produced around 1,000 pips total so the question has come about minimum account balance to cover the cost.
Lets look at 2 examples. In example #1, we push the auto trader to cover the monthly fee and in example #2, we use a more businesslike approach.
Example#1 – If a person had a $500 account, and made $100 per month from it to cover the monthly fee, this would be a 20% return per month in the account. Is this possible? Of course it’s possible but not sustainable over the long run because if you had to make 20% to break even, then you would have to make more just to make a small profit. This example would not be worth doing.
Not to mention the huge leverage you would be using. In November, they made 1,000 pips combined but will this continue? Who is to say? Maybe and maybe not. Maybe in December, they will only make 400-500 pips. We just don’t know what the market will do.
Example#2 – Now in this example, you will be taking a better approach for sustained long term growth that will allow you the opportunity to make gains more smoothly. In this example, you will be using your head, instead of worrying or becoming greedy.
I will start with this. Can you show me any business, other than trading, that you can be up and making a profit in less than a month? Me either; this is very rare. Can you walk into any college or university and demand that your tuition be paid for each month, before graduation? No. This doesn’t happen.
Think about this new venture as a long term investment. Over time, if done properly, your investment will grow….
Let your auto trader compound your gains. If you were to place $500 into an account and let the autotrader do the work for you, shoot for 10% per month or $50 in the first month. This is equal to $2.50 per trading day and at 1 microlot, or 10 cents per pips, this equals around 25 pips per day total that you need to collect. At 2 micro lots, this equals around 12.5 pips per day. This is totally doable.
Can you collect 12.5 pips per day? Let’s do the math…
The auto traders did 1,000 pips this month. Over 20 trading days, 12.5 pips is 250 pips per month. This only a quarter of what they did this month. This is a reasonable assumption that the auto traders could potentiall profit around 250 pips per month.
Now you let your account compound for about a year. Come on man! You can stand on your head for a year! When you have a solid plan and a goal, one year is small in the big picture of things…. So let’s assume you let it compound for a year at about 10% per month. This is hypothetical but just humor me for a minute…
In a year, your account now becomes $1,500. Compounding at the same rate, in 2 years, the $500 account becomes $5,000 and in 3 years, it starts to skyrocket to $15,000. In year 4, it will grow to over $48K and in year five, it will be mind boggling at $152,000. How about year 6?…$477,000
This is the power of compounding. Compounding is a wonder of the world, according to Einstein and it is! In the early stages of trading, when we don’t have jack shit, we just suck it up and do what needs to be done. Later on, the rewards start coming.
So which scenario do you like better? Both are possible. Scenario #2 is more probable. Whether or not you make it to half a million is anyone’s guess but whether you can afford to pay for the services is a moot point.
Here is another way to look at it. The auto traders cost $99. Signals cost $89. Everything we offer is $129 per month. This is less than $5 per day. Are you concerned with covering your costs now and having to make 20% per month just to get to break even, or are you going to be a bit smarter and put some education money aside each month for a potential for more, later on in life.
This is the way I look at just about anything I do. How will it benefit me in 5 years? 10 years?