I am just curious what experienced senior traders out there consider to be an outstanding annual return on their money? What are the best traders you know making per year as a percentage return on their funds? Because even though I am not that experienced, I am making very good returns, better than I ever hoped for when I began. I have made a 41% return on my capital since April 24th when I started trading the Nasdaq e-mini for the first time, that was about 6 weeks ago. For the record, I made about $45,000 on a capital base of $110,000 (US funds) when I started 6 weeks ago. Before that I made money trading QQQ earlier this year, also with good results. I am not trying to brag or anything, but are other top traders making this kind of return? Because I am in disbelief that I have made this much this fast. I had a trading plan when I started, and it has worked, much to my surprise and delight. Anyway, I just wondered what other top traders out there are making annually.
Canadian, It is pretty hard to measure % returns on a relative basis because every trader uses different risk to achieve his goals... Risk and Reward as you know are proportionate to one another... When I was trading stocks, I risked 1-1.5% of my capital per play(liquidity permitting) and was able to return apporximately 17 units per month on avg at the end of the year BUT the 17% a month was not compounded due to size constraints... If you dont mind me asking what is your risk per trade on a % basis of your capital??? PEACE and good trading, Commisso
I have always used a 4 times margin factor, even when I still traded QQQ. So when I take a position, it is for 4 times my capital. When I started, I had $110,000 in capital and traded about 16 contracts. I currently traded 26 contracts this morning. So they are very large trades, but I have emergency stop losses set. My absolute loss limit is a 2% loss on the futures (so that would be an 8% loss in my capital). I have never had to use this emergency stop loss in the 6 weeks I have traded the e-mini, but I know I will have to use it one day. And that's OK, I don't mind losing 8% in a trade a couple times a year, the returns I have been making will more than cover such losses.
So with 100K in capital how much of that is on deposit with the futures broker and what is your typical position size (number of NQ contracts)?
I had $60,000 with the broker when I started April 24, with the other $50,000 on reserve in a bank account, ready to transfer if I needed it in the future. Since then, I have kept the $45,000 in profit in the brokerage account, so there is now $105,000 on deposit with them. I might remove some of it and put it in the bank, they don't need to be holding that much. The size of my trade is calculated the following way # of contracts = 4*(total amount with broker + total amount in bank account) / contract price*20 So using that formula, when I began trading, I was trading 16 contracts. This morning I traded 26, it just a way to calculate how many contracts I need to put 4 times my capital funds to work in the trade.
IMO, 6 weeks of trading is not enough to draw conclusions about one's performance. Also, risking 8% of one's capital on a single trade seems a bit too aggressive. Btw, why did you switch from QQQ's to e-Minis?
Its not 6 weeks, its 5 months of really active trading. I traded QQQ starting this January. I have been trading QQQ for a couple years, but not in this style, nor as agressively. As for 8%, well its a risk I am willing to take at this point. I make a lot too running my own business, so I always figured that I could replace any lost investment funds with my regular income stream. Its a personal decision. But if I had $1 million in capital, then yes, I agree, you would want to cut the risk a bit by risking less on each trade. But at this level I am comfortable trading this amount, the returns have been great, and now I can afford to cover such losses from the profits I have already made. As for why I switched from QQQ, it was because of this forum, everyone advised me to switch. They were correct about all the reasons - lower trading costs, greater liquidity, instant executions, smaller spreads, and best of all, no more damn partial executions where I pay full cost for the trade (i.e. pay to trade 2000 shares of QQQ but only get executed for 100 shares).
With 26 NQ emini contracts. Assumning your original 100K, you are pretty much trading close to the overnight margin limit. ($3,000 is the SPAN limit, you have $3,800 available margin per contract @ 26). That's running pretty hot, even for a pro. A floor trader might do this, but it seems too much for a remote trader. No room for mistakes.
the ability to replace what you lose is a good thing, but still if you get a run of bad trades you will be screwed. You can replace 8% but I doubt you would be happy being down 40%, which could happen to you in any given month.
Get that 45K out of your futures account and forget you ever got it. Trading with 'found money' sometimes leads to bad results.