ROI - Top ETs vs. SAC traders / Golman Sachs prop vs. Bright prop

Discussion in 'Professional Trading' started by digdeep, Oct 28, 2007.

  1. digdeep


    So at some point account size / capital is a key variable that can't be ignored or factored out of the equation.

    Would you say skill level aside - that capital managed is the biggest difference between the top traders on both sides of the equation?

    On some level - a good trader is a good trader? Right? A good trader should be able to scale up or down, and adapt his/her strategy with increased size. Steve Cohen was forced to do it at some point - was he not? He started to take longer-time frame setups because his shorter-term setups ran into the liquidity restraints.

    A basic assumption I am making when asking this question is that both hedge fund traders and retail/small prop traders are trying to build their account size... not simply crank out the same P/L year in and year out.
    #11     Oct 28, 2007
  2. Digdeep - about $5-7m. I've started trading my strategy on forex which will increase my capacity significantly, but I expect my risk-adjusted returns to be not quite as good, though still very respectable.

    Quantplus - I probably miscalculated Sharpe, my equity curve is very smooth. I've only kept detailed records of $ PnL, so it is hard to accurately convert to % figures.
    #12     Oct 28, 2007
  3. digdeep


    thanks for sharing... best of luck increasing your capacity.

    and the topic has been brought up a couple times now - as capacity/capital traded increases, return expectations generally decrease.

    I realize that it requires different strategies and an entirely different mentality to trade $50M then it does 50K. I didn't intend to ignore this fact in my post - so if people feel that account size/capital is the key difference between the large hedge fund/Wall Street traders and the off-street retail and prop traders, then feel free to point that out.

    I'm still interested in the difference in quality and skill between both groups of traders. If capital traded as well as %return need to be considered - then I'd be curious about people's opinions regarding both factors and how they come into play when trying to make this comparison.
    #13     Oct 28, 2007