Professional profits

Discussion in 'Forex' started by drasfs, Oct 19, 2006.

  1. drasfs


    Im just wondering what profits proffesionals usually achieve in the forex market?

    Not in terms of pips, but rather in percentage(annual return on investment)

    Do the professionals for example just achieve 25% in return on their investment?

    I do however understand that this isnt an easy question, and i suspect that no survey on the matter has been done. But someone here might know it from experience, or is a proffessional themselves.
  2. liger


    Why not ask what a professional makes a monthly basis also? I would like to hear something on both.
  3. misha7


    Forget about 25%. For typical returns you can take a look at the Parker global currency manager index... I believe the results have been less than impressive lately.

    Bank dealing desks are profitable of course, but that's mostly a function of customer order flow
  4. dac8555


    it is tough to make a buck in forex....or in any trading for that matter.

    As stated above "professionals" get paid on order flow...not nesecarily taking risk.
  5. i think that would also depends on what type of professional we are talking about.

    I'd imagine many big funds linked to big banks could make a lot of money off 'insider information' (which of course is legal in fx). You get an order from some fund you know if profitable for 100 million Euros, well why not just put in your smaller order ahead of that one. It seems like a lot of managers make money off that kind of inside track. Perhaps I am wrong, but I hear goldman-sachs big fund trading desks sits next do their dealing desks. Hmmmm. - For those guys profitability would be based on the amount of order flow. I hear markets are moving this fall, so maybe their profits are too.

    I'd be curious how funds without insider info can profit. I suppose upon the realization that markets move in the long term due to fundamentals that are often hard to predict, and intra-day near solely to thousands of buyers and sellers like us - if your trader had a keen sense for what market partisipants were thinking and why, you would do well in the same way the same poker players keep ending up at the world poker series. - These guy's profitability would be more eratic, how can you possibly expect stable returns.

    I'd like to hear good thoughts on this.
  6. "Forget about 25%. "
    I think it would depend on the leverage you use, within acceptable MaxDD.


    The Parker FX Index is a performance-based benchmark that measures both the reported and the risk adjusted returns of global currency managers. It is the first Index to analyze unleveraged (risk adjusted) performance in order to calculate pure currency alpha, or manager skill.

  7. FXPimp


    I am a junior trader at a managed forex "fund." Generally, the leverage chosen by the firm ranges from 6:1 - 30:1. You can expect the top managers to average around 1-3% per month on the total BP allocated. So, this basically means that on a 10:1 leverage, and a 1.5% return in a month = a 15% return on the real equity value. No one at my firms uses any insider info or gets any news before the general public. They are just primarily really good traders. Hope this answers your question.
  8. I think large size would be associated with lower leverage. What size is your overall 'forex fund'? TIA.
  9. FXPimp


    Smallest "fund" is 17MM
    Largest "fund" is 200MM+

    You are correct, the bigger the amount of assents under management, the lower the leverage (gearing) used. Once they get big, they just want to maintain and make small stable gains. Unfortunately, due to the lack of regulatory involvement there are a lot of managed forex firms that just churn accounts and never make any $ for there clients, then they just keep changing the name of the managed product every few months and show some bs "theoretical" gains. They give a bad name to the real managed currency firms. But, don't get me wrong, I am never in favor of increased regulatory involvement, its just something to watch out for in the fx industry. For the average investor, a good way to see where your $ is going early, is to see how many trades are being executed a day. Depending on the strategy, most legitimate funds do less than 10 trades a day. Granted, there may be quality firms that do more, but, in general, the bad ones just trade and trade all day. Like I said before, I am new to the firm that I am with, but I have been trading professionally for 10 years (mostly futures).
  10. Any links/ sources to the above info/ list?
    #10     Oct 28, 2006