Projections... a little more realistic

The following makes the basic premise that I can daytrade as successful as my testing would indicate. There are a lot of mind games involved...more than I anticipated, but that is another topic.

I like to run spreadsheets and forecasts based on minimum expectations so I have some goals in mind that look very good. I was going to try to put some of that here but it gets too messy without just seeing the sheets. Suffice it to say that by this year's end if all goes as expected I will have increased my portfolio by 80% or more after taxes. I plan on using the Tax Free Savings Account as my primary trading account next year so anything over $5K in my account at year end is really just a bonus. I figure that will be my "carrot".


I know I posted a previous "projection" but I consider it flawed and a little outside of my real expectation as it was based on heavy margin use. My goal is to not have to use margin.

Next year is the roll out of the Tax Free Savings Account which can be traded like a regular account, except with no margin use. $5K can be added each year and all earnings are tax free if withdrawn or allowed to accumulate. So I plop $5K in Jan and run my 1% per day based on the value of the trade (so a $5K trade is $50 and a $10K trade is $100 etc.). I increase my trade size by even $5K increments as the account can handle it. I double my money in 26 trading weeks and triple it by week 40, the end of the trading year if I so choose...tax free. By the end of year two I will have increased my portfolio by $1160%, capped my trade size at $35K, be pulling in $1400 per week tax free.

Full margin account as a comparison and using only double margin would see me double my money in 14 trading weeks and 6x by week 40, then cometh the tax man and drop the real return to 443%. By the end of year two I will have increased my after tax portfolio by 1332% capped my trade size at $50K and be pulling in $1300 per week after taxes.

Year three is the interesting year and shows the power of tax free accumulation assuming the same trade cap is applied as the margin account, $50K.

TFSA: 2856% return, $2000 weekly net income,
Margin: 2932% return, $1300 weekly net income

I prefer the higher tax free income as I can skim the excess over the 1% per day and see some play money. With margin and taxes the income gets eaten up and the TFSA pulls ahead in net income after 1.7 years or so...with a $35K trade value. Just plain easier money as my goal is income rather than mass cash accumulation, although it will come along with the income anyway.




For the record I would consider any gains over the 1% goal as "bonus" money and, if I am consistant enough, this could be skimmed for use outside of the trading account.



JD.