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You'll see advertisements for traders make 2% a day (or more!) using some system that someone is trying to get you to sign on to. Lets do the math on this. You start off with a dollar. If you make 2% a day for 10 years, and there are about 200 trading days a year that's 1.02 to the 2000 or so, or more the 1000 times the total GNP of the entire world! Do the people making that claim realize how idiotic that is? An average of 2% a day might not sound like much, but it's way more than is possible.

If you have any urge at all to sign up with people saying such things, you should think about what is the upside for them in you signing up. If you can't find any, then you should be even warier, because it is even more likely to be some sort of trap.

So even if you make 0.2% a day trading, you'd be doing incredibly well, and this is one reason why it's so difficult to figure out how best to invest. If one day you make $1123 and the next day you lose $900 then that can still look like an incredibly high return, over 10 years. But you're just looking a statistical errors, and to estimate your true rate of return would require years of trading. In other words, it's the volatility of the market that is making hard to really figure out what's going on.

It's very very difficult to either prove or disprove that the advice sleazy hot trades offers is actually useful in making money. If you're day trading, a stock typically swings up and down around 2%. If you were always right, you'd be making 2% a day. Even if you were wrong 4 out of 10 times, you'd be making a killing. But 5 out of 10 wrong is random and completely useless. It's very hard to figure out if a strategy is wrong 4 out of 10 times, or 5 out of 10. That's one reason why there's so much snake oil. But there's no more reason to believe the sales pitch than ones touting grapefruit seeds as a cure for acne and hemorrhoids.

Hopefully now you understand that there is no way traders make 2% a day. That's the point of this site, to educate you on risk and volatility and how to use a portfolio of stocks to reduce it.