Chasing Unrealistic Profits Can Destroy Your Capital — Here’s Why

15th Jul 2025
Follow Real Traders. Trade Gold, Forex & More — Automatically.
Try SMARTT – 7 Days Free

The dream of turning a few hundred dollars into thousands — in just a week — is seductive. For new traders, social media feeds are flooded with screenshots of massive wins, high-leverage gains, and “flip-my-account” challenges. And it's easy to fall into the trap of believing that chasing huge profits is the key to success.

But in reality, chasing unrealistic profit goals is one of the fastest and most common ways traders destroy their capital.

In this article, we’ll dig deep into the psychological patterns, technical risks, and long-term consequences of trading with unrealistic expectations. More importantly, we’ll show how adopting a realistic, risk-controlled approach — like the one used in SMARTT — leads to more sustainable growth.

 

The Psychological Trap of Unrealistic Profit Expectations

Every trader begins with ambition. But when that ambition turns into obsession, the damage begins.

New traders often enter the market with:

         No defined profit targets

         A belief that large profits are standard, not exceptional

         A “win fast or go home” mentality

These expectations don’t arise out of nowhere — they’re shaped by:

         YouTube traders showcasing 200% monthly returns

         Signal providers promising “guaranteed” daily profits

         Broker ads promoting fast wealth with small deposits

         Peer pressure from social media trading communities

Over time, this creates an internal performance pressure that overrides logic. Traders begin to:

         Force trades even when the setup isn’t ideal

         Increase lot sizes to “make back” what they lost

         Ignore stop-losses in hopes of “one big win”

         Measure success in days, not months or years

This isn’t trading — it’s gambling dressed up in trading software.

 

Why Unrealistic Targets Break Trading Discipline

Setting aggressive profit goals like “I want 100% this month” might sound motivating, but in practice, it:

 

1. Distorts Risk Perception

When the goal is abnormally high, your tolerance for risk shifts. Instead of risking 1–2% per trade, you start pushing 10–20% — just to “hit your goal faster.”

One losing trade in this context can wipe out weeks of progress or worse, your entire account.

 

2. Encourages Overtrading

Chasing high returns leads to overactivity. You keep opening positions even when conditions are unclear. You don’t wait for confirmation — you jump in, fearing you'll “miss the move.”

But overtrading leads to:

         Fatigue and decision fatigue

         Reduced trade quality

         Increased commissions and spreads

 

3. Eliminates Objectivity

Traders with aggressive targets tend to “hope” trades will work out rather than evaluate them based on clear criteria. Emotion replaces logic.

Instead of asking, “Is this a statistically strong setup?” they ask, “Will this get me closer to my goal today?”

 

4. Leads to Revenge Trading and Burnout

If you fall behind your self-imposed target, you’re more likely to chase losses, double your position size, or trade in unsuitable markets. This is where revenge trading begins, which is the fastest path to account blowout.

 

The Technical Consequences of Unrealistic Goals

Let’s assume a trader with a $500 account wants to make $2,000 in one week — a 300% return. To do that, they:

         Use high leverage (1:500 or more)

         Open multiple large positions

         Risk 20–30% of capital per trade

Now here’s what happens in practice:

         Even a small market move against them causes a margin call

         The account faces huge drawdowns that it can’t recover from

         The emotional toll becomes unbearable, leading to impulsive decisions

         Instead of scaling back, they often add more funds and repeat the pattern

This cycle is unsustainable, and nearly all traders who follow it either lose everything or walk away discouraged and bitter.

 

What Realistic Profit Targets Look Like in Professional Trading

Professional traders — including fund managers and prop desk professionals — aim for monthly returns between 3% and 10%. Why?

Because they:

         Focus on capital preservation first, growth second

         Trade based on statistical edges, not hope

         Understand that scalability and risk control are the real keys to success

         Know that a 6% monthly return compounded over a year results in over 100% annual growth

For instance, let’s say you grow your capital by just 6% each month:

         $500 becomes ~$950 in 12 months

         $1,000 becomes ~$1,900

         And as your capital grows, so does the dollar value of each percentage

This is the power of realistic compounding, not reckless chasing.

👉 You can simulate this yourself using the Compound Return Simulation page on SMARTT.

 

SMARTT’s Philosophy: Risk-Managed, Data-Driven Growth

SMARTT is built for traders who understand that discipline and consistency beat aggression and emotion. Instead of promising overnight riches, SMARTT connects users with:

         Verified traders who average stable monthly returns (e.g., 4%–9%)

         Transparent performance dashboards showing drawdown, volatility, and win rate

         Built-in stop-loss systems and equity protection tools

         Full automation that removes emotional execution from the process

You don’t need to manually monitor the markets or jump from signal to signal. SMARTT’s ecosystem is designed to make sure traders avoid the trap of unrealistic expectations and focus on long-term, sustainable wealth-building.

👉 Learn more about how it works on the Copy Trading page.

👉 For trusted execution environments, check out our licensed brokers on the Broker Licenses page.

 

How to Adjust Your Mindset (and Results)

Here are practical steps to escape the dangerous cycle of chasing profits:

• Set Monthly Goals, Not Daily Targets

Daily pressure leads to emotional trading. Instead, define a realistic monthly growth rate (e.g., 5%) and work backward.

• Limit Max Risk Per Trade

Stick to 1–2% risk per position. This gives you room for multiple trades even in a losing streak.

• Track Performance Over Time

Use a journal or dashboard (like SMARTT provides) to track your consistency, not just your wins.

• Accept That Losses Are Normal

Even the best traders have losing weeks. The goal is long-term profitability, not daily perfection.

• Focus on Strategy, Not Outcome

Judge yourself by whether you followed your system, not whether the trade won.

 

Final Thoughts

The desire to grow quickly is natural. But in trading, that desire — when unchecked — often leads to the exact opposite result.

Chasing unrealistic profit goals destroys capital, discipline, and confidence.

The last traders are the ones who:

         Focus on risk-adjusted returns

         Embrace slow and steady growth

         Use platforms that support automation, transparency, and risk control

SMARTT provides the tools to help traders escape the emotional trap of aggressive goals and start building a portfolio that actually survives — and thrives.

Follow Top Traders. Smart. Safe. Automated.
Try SMARTT – 7 Days Free
categories:Trading Psychology

Newest blog