I've been reading this board for a few months and I've been trading for a few months. I am too much of an amateur to post because I really connot add to the body of knowledge, but there is something I finally need to know. I have a 50K account with 4:1 margin. How much should I be earning each day? From reading posts here I cannot tell what a good jouneyman trader should make. I work from home, and need a reasonable daily goal in order to perform. What is truly reasonable for someone in my circumstances. Please do not express in percent, because someone with a 25k account can earn a much higher percent than someone with a million dollar account. I'm not asking what the most brilliant traders make, but how much do the guys in those trading rooms make with this amount of capital. I keep raising my personal goal $100 day at first, now I try for $600 per day net, but I can't tell from this board what it should be, and when I should be content. I feel like I'm up against a glass ceiling, but I need to know what I should be doing. Thank you very much for your advice.
You can't think about this business in those terms, % of return on capital. It will make you focus on a goal of numbers instead of focusing on the trade. Taking the play you're in to it's t/a or environmental limits is the key. ROI is only a measure of what the market makes availabe in any given time period. You can't trade what isn't there just because you're looking for a number at the end of the day.
You asked the wrong question, its hard to get numbers out of anyone, they all like to talk in generalities. If you were reasonably good you would be doing much better than $600 a day with 50,000 capital. Easy for me to say. Prop houses are different because they have 10/1 margin. Its hard to get the truth out of their traders, they always tell you about the superstars. Keep working.
Iregargless of leverage, if you can AVERAGE 1 % profit per day you will find yourself amongst the trading elite no matter how long or short you have been a trader.
What are you saying? In my experience and observation, consistently managing to break even is already a significant accomplishment for someone who has been actively trading for only a few months. Averaging better than 1%/day, consistently, would be considered by many to be very impressive. Of course, a few months might not be a long enough period to make a fair assessment. Without knowing any of the other details about the trading approach under discussion, it's hard to say anything concrete about what the trader should be aiming for, but, generally speaking, I think that it can be easy to underestimate the effect of alterations in a heretofore successful trading method. Any changes with goal of substantially higher returns - through increasing frequency, position size, exposure, holding period, etc. - should be examined carefully.
Don't think in terms of days. Think in terms of months. My account rutinely jumps around 5% a day. Often swings of 10-30% aren't unheard of in a week's period. I honestly trade an account very similar to yours. It has 60k in capital in it, 4:1 leverage. I sweep out (buy thv with... lol) all gains back down to 60k after they get to 80k. I usually make or loose 10k+ in a week. I find myself sweeping my account about once every month or maybe every 5-6 weeks. In reality it's closer to making a 30k windfall and sweeping out 30k, then loosing 20k the next week, then making it back in the next, then loosing it the next, and then making 10k for two straight weeks, or something of that nature. It's not regular profits. I hadn't swept it in 3 months before last week when I swept 35k out of it. The extreme volatility is the reason I have to keep sweeping it. I don't want my equity to bounce around 30% in a week. That account is now only a small part of my total funds. If you think in terms of total % return on a "trading account" as opposed to "investing account," you should expect to make 200-500% a year on it. So on 50k, you should definately make 6-figs and most likely much more because of compounding (until the grim reaper of taxes kills your account of course). Good luck, and remember that you should just try to do your own best. Many people have many different appetities for risk. It may be better for you to take less risk and not blow your account.
Don't get me wrong, I think you are doing great. But your question was what should your profit goal be to be considered a good trader, (not a star, but really good!) As a GOAL....., $600 on 50,000 is not enough. As a average result, well its great. Praetorian2 makes it clear with your account size you should be thinking bigger. Thanks for the numbers praetorian, you inspired me too.
Lets think about it this way....if you have some other income (spouse etc) and/or money to live on you can try to make expenses and plus $300-500 a day on average. BUT remember more money you shoot for you risk will have to go up commensurably. IT IS THE LAW OF RISK MANAGEMENT AND TRADING! Try to think about this very seriously..... So what is more important to you make money in 2-3 years in a row enough to live on want to shoot for the riches or bust? Ultimately the risk and the rewards are yours so the decision must be too. May want to consider time-frame and length of position. How much do you pay for commissions?
600 x 5 days x 50 weeks= $150,000 / year. http://tiger.berkeley.edu/sohrab/politics/income_00.txt You have nothing to complain about.
Why do you think this? Are you trading illiquid securities that a large account would have inordinate slippage in trading? If you are trading liquid securities it is just as easy to take a position of 40 units as it is to take a position of 1 unit. In fact, I say you'll get a better return on a larger account because you'll have better leverage in negotiating commissions and your fixed costs (data feed, computers, etc.) will be spread over a larger revenue base. Larger accounts also get a better interest rate on cash balances and short sale proceeds. Maybe I've been spoiled by the incredible liquidity in the stock index futures. You can trade hundreds of contracts in a few minutes and the market won't bat an eyelash.