Average % return for profitable traders

Discussion in 'Trading' started by Daal, Apr 26, 2003.

  1. omcate

    omcate

    I swing trade options only. Currently, the return is 2.5 to 3% of my account value per month. Have a tough time trying to increase the monthly return to 3.5%.

    :p :p :p
    :D :D :D
     
    #11     Apr 27, 2003

  2. I think it depends on the year... in some years 500% is doable... this is tempered by other years with double digit returns... the main thing is to trade with consistency, be willing to adapt and keep your stops... once you have reached a certain account size, you don't need to do more than 50% to have a less frantic trading life and still maintain a good living...
     
    #12     Apr 27, 2003
  3. qdz5

    qdz5

    Maybe the problem is that you are trading OPTIONS. There are many other places to put your money. Illiquid plans to make 10% a week with NQ. Why don't you consider switching?

    NO MORE OPTIONS!! :p :p :p
     
    #13     Apr 27, 2003

  4. Bingo! Isn't that the point? :)

    Tongue-in-cheek aside, the market has no clue whether you are trading 50 contracts with a 55k account or a 5mil account -- the trade is the same, just a matter of what you're personally comfortable with.

    In any case, getting back to the point of the original thread, there is no purpose in thinking in terms of "avg returns" -- a valid edge combined with rock steady discipline won't give you avg returns, it should give you extraordinary returns, so don't ever be satisfied with average -- find that true edge!
     
    #14     Apr 27, 2003
  5. Many thanks Illiquid for your insignful comment!
     
    #15     Apr 27, 2003
  6. I kind of think the original point of the thread actually was perhaps to compare the rates of return between daytraders and swingtraders.

    I do think the ability to hold positions overnight is useful, you can't always be absolutely perfect in your timing, but patience is a real virtue in profitable trading.
     
    #16     Apr 27, 2003
  7. It also depends on how much capital you are talking about. The more capital - the harder to get the higher percentage returns.

    I'm not sure why this is, but I suspect that a system that is being employed with a positive expectancy has only so many opportunities and so much liquidity (on the other side of your trades) to be able to take advantage of those opportunities.

    I will chime in here and say that while measuring success by percentage return on capital is useful for the mutual fund manager, it is unhelpful and misleading for the daytrader.

    I can go to a prop firm and put up nothing and if I make a profit, what is my return - infinity? High leverage at prop firms can typically make your percentage returns seem staggering. I find a much more useful measure - profit in dollars.
     
    #17     Apr 27, 2003
  8. Daal

    Daal

    thanks everybody for the opinions

    D
     
    #18     Apr 29, 2003
  9. I think this is the point, some years you can do much more/less.

    It is not that hard to hit about 10% a month daytrading. This works out somewhere in the neighborhood of 100-200% a year. Key is low drawdowns.
     
    #19     Apr 29, 2003
  10. For daytrading under 3 digits % it is not worth. If one do not daytrade 2 digits % is honorable.
     
    #20     Apr 29, 2003