Welcome to The I&R Market Brief! Your weekly digest from the r/Trading community.
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This Week On Reddit
“Why is making 10% a month considered almost impossible?”
A post in r/Trading this week asked the question nearly every new trader eventually asks: if 1% a month is the "realistic" target, why is 10% treated as a fantasy? Especially on a small account, why not?
The answer is risk. 10% a month isn’t impossible for a lucky stretch. It's impossible to sustain without eventually blowing up. Here’s what the veterans had to say:
The compounding. $10,000 growing 10% a month becomes about $927 billion in ten years. Since no trader in history has ever done that, we know from raw data it can't be sustained. If it could, the richest people on earth would all be retail day traders.
Big returns demand big risk, and losses hurt more than gains. To target 10% a month, you have to size up hard. But a 50% loss requires a 100% gain just to get back to even. Take enough risk to chase 10%, and a normal losing streak, the kind every strategy eventually hits, doesn't dent you, it ends you.
Small accounts have an edge that vanishes with size. A $10k account can hit 10% in a good month precisely because it's tiny and doesn't move the market. Scale that to millions and slippage eats you alive, which is exactly why institutions target 10 to 15% a year and obsess over not losing money. Being small is a genuine advantage.
Plenty of traders insisted they'd hit 10% in a single month, and they're probably telling the truth. But as one put it, "easy to make 10% in a month, hard to make 10% every month." The people claiming they do it consistently, forever, ran into the same wall every time: the compounding says they'd own the planet by now, and they don't.
Stop asking how much you can make this month. Start asking how many bad months you can survive. That's the number that compounds.
Markets Snapshot
August opened with a bang. After a rocky July, the market rose again to start the month. The Dow surged 693 points, or 1.32%, to a record 53,178.41, while the S&P 500 gained 1.48% to 7,600.50 and the Nasdaq jumped 2.13%. The gains carried into Tuesday, with the Dow and S&P notching fresh records.
The AI trade came roaring back. The same megacaps that got punished in July led the rebound. Amazon rose more than 4% to cross a $3 trillion market cap for the first time, while Alphabet and Microsoft each climbed close to 5% and Meta jumped 6%. It's a near-total reversal of July's AI-spending panic, a reminder of how quickly a crowded trade can swing from fear back to greed.
Oil slid and fear cooled. Crude tumbled nearly 6% toward $79 as President Trump called off a strike on Iran to pursue a deal to reopen the Strait of Hormuz, and Treasury yields eased across the curve as inflation worries faded. The VIX, Wall Street's fear gauge, dropped to the mid-15s. Calm energy prices are doing quiet, heavy lifting under this rally.
What's next. The catalyst that matters most this week is Friday's July jobs report. Markets are watching the labor data closely to gauge whether a September rate cut is still on the table. With records already set and the VIX low, a soft or hot number could swing sentiment fast in either direction.
If the Reddit thread above caught you, here's where to actually start.
Survival is the edge. The tools that protect the downside:
Our editors ranked this week's best research & analysis by APY, fees, and account quality. Rates as of 2026-08-04.
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Industry-leading charting platform with a massive trader community. Backtesting is how you find your real drawdown before it finds you. Multi-timeframe charts, strategy testing, and the largest trader community anywhere. |
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• Advanced charts with 100+ indicators • Pine Script for custom strategies and alerts • Social network of 50M+ traders and ideas | ||
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Pro-grade platform with access to 150+ global markets. The pro's tool for exactly that: sophisticated margin and risk controls, position-sizing tools, and access to 150+ global markets. |
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• IBKR Lite: $0 commissions on U.S. stocks/ETFs, no account minimums • Access to 150+ markets in 34 countries and 27 currencies • Industry-lowest margin interest rates (as low as ~5.83% on IBKR Pro) | ||
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| Brokerage | ||
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Full-service brokerage with thinkorswim and 24/7 support. thinkorswim's paper trading lets you survive the drawdowns on fake money first, the single cheapest way to learn the lesson this thread is about. |
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• $0 stocks/ETFs/Schwab funds · $0.65 options • thinkorswim desktop, web, and mobile for active/options traders • 24/7 phone support and 300+ branches nationwide | ||
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Rates and offers change frequently. Verify on the provider’s site before applying. Some links are affiliate links that may earn us a commission at no cost to you.
Headlines That Matter
Source: CNBC
Palantir crushed earnings, and the stock ripped 18%. The AI-software company posted quarterly EPS of $0.41 against the $0.33 expected, its ninth straight beat, with US commercial revenue up 90% year over year. CEO Alex Karp called it an "otherworldly" quarter. Palantir had fallen roughly 40% from its high on valuation fears, so this is the market deciding, for now, that the growth justifies the price tag.
Caterpillar became an unlikely AI winner, jumping 12%. The industrial giant topped $20 billion in quarterly sales for the first time, with its power-generation unit riding the data-center building boom. It's one of the clearest signs yet that the AI trade has broadened far beyond chips: the companies selling the picks and shovels, power, cooling, construction, are now catching the same bid.
This is shaping up to be a monster earnings season. S&P 500 companies are on track for roughly 47.5% year-over-year earnings growth this quarter, blowing past the five-year average near 16% and marking the second straight quarter above 20%. Strong profits are the fuel under this record-setting rally, and they're the reason the July AI wobble didn't turn into something worse.
All eyes are on Friday's jobs report. After the Fed held rates for a fifth straight meeting, July's nonfarm payrolls have become the number traders care about most, since it will heavily shape whether a September rate cut stays in play.
Join the Conversation
Got a portfolio question? Drop it in r/trading and we might feature it next week.
This newsletter is for educational purposes only and does not constitute financial advice. The I&R team may have positions in securities mentioned. Affiliate links may be included above.