The great thing about this trading game is that fact that it allows people with more volatile drawdowns (me) and people with tiny drawdowns (Mr NBBO) to come out as winners... there are many ways to skin a cat...
Most people lie to themselves about their returns. Therefore, it should come as no surprise that they lie to others, even while they believe that they're telling the absolute truth.
Yes, that is an possible explanation. I wouldn't be suprised if FasterPussyCat, mrmarket or other internet sick freak will claim super high returns. But guys like MrNBBO, Scientist seem to be rational people.
"The speculator is not an investor. His object is not to secure a steady return on his money at a good rate of interest, but to profit by either a rise or fall in the price of whatever he is speculating in." "For three weeks my average profit was 150% per week. From then on a steadily increasing scale." Jesse Livermore
Dear Brother AAAInTheBeltway, Wise words from you. Congratulations on this great post and great topic for a thread! To the subject: It is much easier for us as small traders to make a high% return than for the "big guys". It's about the "law of diminishing returns" and I've written a very detailed post on this at this link: http://www.elitetrader.com/vb/showthread.php?s=&threadid=20180&perpage=6&pagenumber=2 -Please disregard whatever was written on that thread after that post, since it really is all nonsense. Enjoy yourself. Have Fun and Good Luck to You! ~The Scientist
And they're both probably true. 1) seems likely to me, because of the big difference in account/position sizes being traded and the subsequant effect this has on the types of strategies available. 2) You think so? ps - in the case of our esteemed Scientist, I wouldn't confuse rationality with out and out honesty, if you get what I'm saying.
Actually, I believe it's #10......I had another super small loss since the last post. It was just enough to tarnish the record.
I realized I was comparing apples to oranges in using mutual fund managers and hedge fund managers with huge amounts of capital. But it makes my point even more clearly. Certainly it is easier to make high returns with a small to moderate trading account, yet few seem able to do it, at least consistently. Livermore's story and insights are very interesting, but he blew up a number of times.
I agree it's easier for a trader with adequate but not enormous capital to make higher returns. In fact, this is a recognized risk factor with CTA's or hedge funds. I'm not sure where one begins to be constrained, but there certainly have been S&P traders like Paul Tudor Jones who swung a pretty big line.