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For many new traders, the dream is straightforward: turn a small account into a much larger one by consistently making strong monthly returns. But when one trader recently asked why making 10% per month is often considered almost impossible, the responses revealed a hard truth about trading that many beginners overlook.
Posting in a popular Reddit trading forum, the trader said they had often heard that a good trader should aim for around 1% per month and wondered why 10% monthly returns are viewed as unrealistic, especially on a relatively small account.
"I've constantly heard that a good trader should aim for around 1% per month," they wrote. "If someone has a $10,000 account" and consistently makes 10% per month, "why is that often viewed as almost impossible?"
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Many experienced traders explained that the issue isn't making 10% in a single month. Plenty of traders have months where they make far more than that. The challenge is doing it consistently while keeping risk under control.
"The word 'consistently' is the part you need to focus on," one commenter wrote.
Another trader said there's no magical rule preventing someone from making 10% in a month. Instead, the problem is that higher returns usually require taking greater risks, which can result in larger losses when trades go wrong.
One commenter explained that traders often focus too much on profits and not enough on protecting their capital.
"In trading, the risk you take is much more important than the return you make," they wrote. "If you lose your capital, you can't make anything."
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Others added that targeting a specific monthly return can encourage traders to overtrade, use excessive leverage, or take positions that are too large. While it might work for a bit, one bad month can erase all the progress you've made.
While many people think of 10% per month as roughly 120% annually, compounding pushes the number much higher. A trader earning 10% every month for a full year would actually generate a return of more than 200%.
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