2% daily compounded gives 5248% in a year

Discussion in 'Risk Management' started by castor_t, Jun 19, 2013.

  1. castor_t


    I made an excel sheet with some calculations, here's what I found.

    If you have an initial capital of 650$, and if you earn 2% consistently on a daily basis compounded for a year (200 trading days), your return will be 5248%.

    $650 @ 1% daily - 732% - $4731
    $650 @ 2% daily - 5248% - $33940

    Of course, the main problem is to consistently earn and making up of losses the next day.
  2. Eight


    nitpicking maybe, but: assume 220 trading days per year. Assume you leave all the money in the account.

    1.02 to the 220th power is ~77 on my HP15C calculator.
  3. luisHK


    Lol, and indeed.
  4. Jeepers, why settle for so little? Somebody was suggeting 6%/day was really easy to do. :D
  5. Short-changing yourself... 365 days, -104 weekend days -7 officially closed holidays = 254 trading days.

    Compound more!
  6. southall


    Compounding is the key to riches.

    You might be able to average 2% a day during the dot com bubble, or during the crash of 2008 etc.

    But most other years you will be very lucky to average 0.5% a day.

    Ofcourse you can always try and leverage up gains, but the risk of blowing up increases to.
  7. That's only 254% annual return. Shoot, any trader worth his salt should do that standing on his head, right?

    Let's see a show of hands... Who has averaged less than 254% per year? Come on, we're all friends here. You can admit it... we promise not to sneer too much.
  8. castor_t


    I understand the saracastic comments, was just trying to make a point.... Only one useful comment so far though..

    Even at 0.5%, the return would be $1753 at 271%.
  9. vinc


    so how much do I need to compound daily to make this miserable 15-20% yearly ?? :)
  10. vinc


    52 transactions and I'm only 12 % up for the year.. jeezes, I feel so small..

    give up on all those big figures, the sooner the better :)
    #10     Jun 19, 2013