Presumably it is possible to double an account in a year but it only works for smaller accounts because the strategies do not scale. I am looking for opinions on the upper limit on the account that could be doubled with a reasonable certainty in a year. By "a reasonable certainty" I mean something like this: each year you start with 10K, in 5/6 years you make 10K or more, in 1/6 years you make less than 10K but don't bust your account.
A $1 million account can easily be doubled yearly, with the right risk management and trade plan. Traders in the pits like myself trade with only enough to cover normal performance bond requirements. Returns on what we have in the accounts (normally at least $150k+ secured with clearing firm) exceed between 400 to 1,000% a year. For the retail trader, with higher margin requirements, due to commissions, getting a doubled account is less likely than having an exchange membership or trading directly on the exchange. But it can and does happen.
A million dollar account can be easily doubled in a year? LOL Higher margin requirements are not due to commissions LOL. Being a market maker on any floor means trading the order flow not taking positions and sitting back like a retail trader. Less likely then having an exchange membership? All it takes is a little time and some money to lease a seat on any exchange and in many cases these days there is almost no wait for a seat and there are plenty of them for lease.
I think futuresRX meant that it is less likely for a retail trader than for a pit trader to double his account.
And what is the percentage of pit traders that run their accounts down to zero? My guess is that it's about 95% of them. Is that right?
True, some do run them to zero and even negative. These traders generally can't keep up pace with the volume and activity. Smart traders will use order flow and volume in the pit (institutions still send most volume to the pit, especially in Hogs) to see where the market's going. You have to know when to stop and when to choose a different market. I didn't just start going to the Hog pit and making a fortune. I tried out in the S&P, Corn pit at the CBOT, Eurodollar, Pork Bellies, and Live Cattle before coming to Hogs. Now I've traded them full time for the past 13 years. For the retail trader, I meant that due to higher margin requirements AND higher commissions, not that higher margin requirements are due to higher commissions.
I agree with that comment but its not really relevant. You're talking about two different games who just happen to use similar playing fields.
Your clearing firm would not allow you to run it below zero in all but the more rare cases. Those cases would be in the extrodinary event cases. There is no need to keep saying or implying that you make a fortune. Its ET its assumed everyone makes a fortune trading however and where ever they say. Being a mm in a futures pit is a lot about relationships with floor brokers and all about order flow. It has almost nothing in common with being a retail trader, which I believe was the implication of the original poster.