$72,400.

That's the correct answer.

If a trader would be able to consistently make $100 per week per contract, and applied proper money management techniques, then his trading account would grow from $10,000 to $72,400 in only two years.

Here's the spreadsheet:

Too good to be true? Impossible?

For most traders - unfortunately yes.

There's nothing wrong with the logic: Even if a trader would not achieve his goal of making $100 per week and miss it 2-3 weeks in a row, it would simply take a month longer to grow his trading account to $72,400.

The reason why traders fail is because of their emotions. Like the trader I mentioned in my previous blog post: He was unhappy with the results. "Only $600 in 6 weeks", he complained. So he wrote me to let me know that he decided to increase his contract size. And make more trades. And that's when it happens...

As humans, we have to be introduced to new situations and circumstances slowly. Very few people like being thrown into cold water. Most of us like to get in with our feet first, then, when our feet got used to the cold water, get into the water up to our knee... you know what I mean. A perfect example are gas prices: We tolerate a slow increase of $0.05 per month, but if gas prices jump from $3.50 to $4.10 in a day, then we would definitely get emotionally involved. It's too much "pain" introduced too quickly.

Same in trading: 

If you trade 1 contract, then you might risk $100 to make $150. So if you increased the position size from 1 contract to 10 contracts, you would risk $1,000 to make $1,500. Same ratio. But there's a difference.

If you just started day trading and have been trading 1 contract for six weeks, then you trained your brain to get used to the idea of winning $150 on a profitable trade and losing $100 on a losing trade. If you now suddenly increased your position size to 10 contracts, your brain might have difficulties adjusting to the new stop loss and profit amounts. 

Previously the $100 stop loss was the equivalent to a nice dinner for two. Now suddenly the stop loss becomes the equivalent of a washing machine (or a trip to Las Vegas, if you prefer). We can't help: Though it shouldn't make a difference, suddenly we treat a trade on which we risk $1,000 different than a trade in which we risked only $100. Like in the previous gas price example: Too much "pain" is introduced too quickly. You might experience emotions that you haven't experienced before, and these emotions let you abandon your trading plan. And the minute you abandon your trading plan and let emotions take over, you're doomed. 

That's when many traders just "lose it", go nuts and lose 60% of their trading account in only one day.

The solution: Though it might be tough to slowly build your trading account - THAT is the way to go.

Start increasing your position size slowly from 1 contract to 2 contracts. Make sure that you are still consistently profitable when trading 2 contracts. And then again increase your position size from 2 to 3 contracts. Go in single steps, don't "jump" from 2 to 4. Increasing the position size slowly will help your brain to adjust to increasing stop loss and profit amounts, without getting emotional.

And THAT is the Art of Growing A Trading Account - PATIENTLY!

Feel free to share your experiences and leave a comment.

Happy trading!