Do you have a weekly profit target while trading on the Value Network platform? Well, I hope you do. It is proven that having one brings a lot of advantages and has a positive psychological effect. You will enter the transactions that will move you towards your goal. On the other hand, when you reach the weekly target you will know, you can take a break for the rest of the week.
In this guide, you would see you have a huge earning potential of at least 20% weekly profit using an example of trading at Value Network for 1 year with an initial sum of $1,000.
Compounding your money for 1 year
50 weeks. This is the time left after deducting holidays in the trading business from 52 weeks in a year. And this is the time to work on the well-proven science of compounding to provide 20% of the weekly return.
Assuming that everything goes according to plan, that your initial balance account is $1,000 and your weekly profit target is 20%, you should gain $200 during 5 working days of the week. The following week, you should have $1,200.
Now, the compounding concept implies adding earned profit to the capital. This way, in the second week of trading, your goal will be 20% from $1,200 that is $240. If you continue like this for 50 weeks of the year, then you will have a huge profit indeed.
However, keep in mind that there is absolutely no guarantee when trading. Even if you’re the best trader in the world, you’re bound to encounter some losses. Be very careful when trading so that you don’t lose more than you win.
Compounding strategy and Warren Buffet
Warren Buffet is one of the richest men of our time. If you haven’t heard of him, let me just tell you that his net worth is estimated at $82 billion. But what is even more interesting is how he had come there.
Warren Buffet started investing at the age of 14 with $5,000 capital. During 70 years, his wealth has grown up to $82 billion. You can calculate from these numbers that his annual return was about 25-26%.
Well, this is more than a 20% weekly profit at Value Network that will lead you to a million in one year.
What we can learn from Warren Buffet is that even with quite a small return per week when using compounding you can make a fortune over time. Of course, there is no magic wand that will make your millions true. You need to work for this. And avoid losses. This is also the lesson from Warren Buffet. Do not lose money from your account.
This won’t be always possible. You will surely experience losses. However, don’t get discouraged. Even with a few steps backward, you are still able to get 20% at the end of the week as long as you study, practice, and execute.
Trading versus investing
Warren Buffet’s wealth was made mainly by money investments. Trading is kind of a different story.
Traditional strategies based on buy and hold are bringing the profit only when the value of the stock grows. Financial derivatives trading, on the other hand, allows you to make money no matter the prices are rising or falling. As a result, your fortune can expand much faster than if you were an investor.
It is vital, that you have a strategy. If you want to make money you need to have one and know how to use it. Fortunately, there are plenty of strategies you can choose from. Make sure you pick the one that suits you best.
In 2017 the cryptocurrency bubble exploded. It could be a good example of why the buy-and-hold investing strategy is not good. In just a few months the value of bitcoin increased to more than $20,000. But today its value is around $58,000. Imagine investors who bought bitcoin at $20,000 and hold it still in hope.
And now think about cryptocurrency derivatives traders. He does not hold coins. But he still makes money trading on the coin’s price. The price is rising or falling, and he can earn a profit on those price fluctuations.
A few words about cryptos
When cryptocurrency’s value is decreasing, you have still a chance to get away with a part of your initial capital. However, some cryptos have completely collapsed.
This happened, for example, with Ifan and Pincoin. The people who put the money in them lost the entire investment. Nevertheless, there are still some who continue to invest in new cryptocurrencies. They believe those new cryptos will perform like BTC or ETH.
Warren Buffet’s golden rules
As was said earlier, losses are part of this game. Warren Buffet would say not to lose even one dollar from your funds. But we can put this in these words: never close the week with a balanced account smaller than in the beginning. Don’t stay fixated on that 20%.
Maybe one week you will only make 3%. But another week you might close at 80%. The most important thing is to make some profit at all. And you will see that consistency bears fruit.