prop firm trader P+L swings

Discussion in 'Prop Firms' started by SethArb, Apr 13, 2007.

  1. can anyone comment on the following

    for a prof. trader ( futures , stocks etc )

    what type of swings does one see

    in a typical traders acct. ?

    is it common for a trader to have swings sometimes of
    a few % up and down in a given week and yet still be profitable
    over time ... or do the real money earners grind it out
    and make those % count ... but without much of a drawdown

    case in point ...

    trader A ... makes a few % this week and did not have any major
    drawdown ... just steady wins and small losses

    trader B has a wild week with a combined % swing of 5-15 %
    in his acct. ( if one counts the up and down and up and down
    movements in his P+L as a % of acct )
    and ends the week with little profits to show for it

    I know in the long run traders like "B" probably will not cut it
    but am curious if even trader "A" sometimes have weeks like
    trader "B" did?
  2. vikana

    vikana Moderator

    For my retail stock trading I've managed to keep the annual returns around 100% with a maximum drawdown of 5% (2006 and 2005). That is MUCH better than the backtested results of my models, so I'm expecting to see DD of up to 15% without anything being out of the ordinary.

    In 2005 i had a currency futures system give me a 17% DD in just two days. That was right in line with what the models predicted, so irritating but still acceptable.

    For retail stock trading, if you can keep your max DD to approximately your average monthly return, you're doing well.

    If you want to see an example of consistency unlike anything I though possible, study PatrickQ's P&L posts. This is mastery at a high level.
  3. Dustin


    My answer would be YES to all of the above. Profitable prop traders vary quite a bit. Even the grinders have some bad weeks, but the really good weeks even it all out.
  4. It obviously depends greatly on the trading strategy and techniques employed. The "day" trader will rarely have too big of a loss (unless he's really not disciplined). Our portfolio manager types will have swings, usually not more than 1 or 2 percent.

    Something to consider, profits tend to come back in spurts, for example, our portfolio group (Family stuff), brought in a lot of $$ the last 2 days. This generally happens when we have a "leveling off" of the market, or a downturn (since we are generally long Value and Short growth stocks). I don't think we have never been down more than $200K or so, early in the year, and are nicely ahead at this point.

    Having several hundred pairs on tends to flatten out the risk enough to be manageable by just a few of us.


  5. I second the "profit in spurts" comment by Don. I swing trade futures and currencies and for much of the time I lose or have no movements to the positive and then all of a sudden you have days and weeks that make up for all the losses and then some.

    Approx. 30% down for approx 100-200% up. This type of trading won't fit everyone's personality, but it works for me.