Now take that number and multiply it by itself an infinite number of times....when you can define infinity. Michael B.
I don't know about "most decent traders", but if you have such little money to trade with, coupled with a good commission structure, then this is indeed possible, a decent trader can return 1,000%+ a year on $10K prop account. But again, what everybody always, always and everytime again gets wrong here is the barriers of return. There is such a thing as a law of diminishing returns, and when you're making any decent amount of money, you will soon see what that means. With $10K, you have huge money velocity, in terms of invisibility and liquidity. If you turned $10K into $150K within a year trading, I wouldn't even be impressed, it's very doable, and many traders have done it before and even surpassed it (know this first-hand) But if you turned $10M into only $50M within a year's trading - Then I would be really impressed. Again *sigh* stop dreaming about turning $1M into $100B in no time, just because you have a 500% annual return on your $10K. It's not going to happen. Think about what liquidity allows for and what outstrips it. As soon as liquidity becomes a problem, you'll need to diversify. And thus you'll need more staff because you can't day trade several markets at the same time all on your own. And then, staff will make you slower again, and hard to find qualified people, and so on. There are huge institutions and investment banks out there who have more money, more leverage, more staff, more pro traders, more supercomputers, more knowledge, more databases and more intelligence than you could ever even conceptualize, trying to do exactly the same thing, with Billions of $ in their war chest, and still finding themselves in a very tough war with all the others trying to do the same thing. But yeah - We can all keep dreaming within our small little traders' world, which ranges somewhere measly between $1K - $20M, covering the vast majority of us. Scientist.
Prop traders will generally get their account up to a certain level then sweep out profits every month. They do not continuously compound their money within the prop account, so they don't run into the law of diminishing returns.