If I start with $100 and make $150, that's 50% reutrn. Easy to calculate. But if I start with $25K (the required capital maintenance amount) and make $500,000 this year, my reutrn can NOT be calculated as $475,000/$25,000 = 1900% return. Any ideas? Somebody told me once that I should use intrad day average (or highest) open $$$ amt at any given moment to use as my base.....Not sure whats right. ========================= ROI or performance is barely usefull to tell about a trader's proficiency, IMO. Even the mutual funds info providers add at least the Sharpe ratio, Beta, and category indicators. I think you can only compare traders with similar risk management parameters, and similar use of compounding, money management, ia allocation, exposure etc. To compute your perf, consider your capital as 25k + the amount of losses you can sustain before being fired. If you never put at risk (under normal conditions) more than (25k+max loss)/100, you can compare yourself to a futures trader using (K-IM*nbr contracts)/100 as a max risk per trade (under normal conditions) Then your perf is = to 100*(annual gains-(25k+max loss))/(25k+max loss) >But if I start with $25K (the required capital maintenance >amount) and make $500,000 this year, my reutrn can NOT be >calculated as $475,000/$25,000 = 1900% return. Congrats if you did ! The best people I know can go up to 100% /mo (1200% /yr since they dont compound) OHLC
You said the best traders make 100% per month. How much to typical, competent but profitable traders make a month?
My 100% figure applies mostly to professional daytraders with their trading as their main income source. The kind that keep just what is required to fit their risk management in their account and do not compound. Others with other sources of income and large assets aside can use compounding on appropriate time-frames and much more, then the perf is no longer a matter of comparison with other traders since they reach absolute exposure levels insane to most people. So, for regular daytraders, I believe a TOP day trader can do 100% /mo, a good daytrader about 30-40%, a proficient and dedicated trader on the first years about 20%. A position trader (someone preparing orders with a limit buy/sell/short, stop that does not act during trading hours) can do about 10% /mo (average leverage like 2.75) My figures are really just indications, since performances are highly correlated to liquidity and volatility. BTW, I'm more on the European side of the markets, so things might be different in the US...) OHLC
I don't think there is any at this amount. You would have to trade much more all at once to move the market for the futures contracts. There is deep liquidity in these futures.
Good job, Canadian_dude. Nice trading! Please post an update in a month. You can get a look at the performance of the top traders each month in Futures magazine. In the "Managed Money Review" column the monthly returns for the top CTA's and public funds are given. For example, in the upcoming July issue of Futures magazine you'll see that the top CTA program with under $10 million in assets returned +26.1% in April. You would only have needed to beat +8.19% to get on the top 10 list. Keep in mind that the returns listed are net of fees, so a net return of 26.1% probably means a gross return of about 33%. These rankings are also given at the Barclay Group website (www.barclaygrp.com) but you have to be registered to access them. This is how I know what is going to be published in Futures!
you can forget most of those rankings, they in no way depict the true picture of the industry that in reality is pretty dismal, as funds that blow up are simply no longer included in rankings etc etc. one of the most comprehensive studies on hedge funds was written by William N. Goetzmann, Roger G. Ibbotson, and Stephen J. Brown, called *Offshore Hedge Funds: Survival & Performance 1989-1995*, here is an excerpt: Most hedge funds are private partnerships; many are offshore and thus unregulated by the SEC. The most authoritative work in the field is Offshore Hedge Funds: Survival & Performance 1989-1995 by William N. Goetzmann, Roger G. Ibbotson, and Stephen J. Brown. They found "high attrition rates of funds, low covariance with the U.S. stock market, evidence consistent with positive risk-adjusted returns over the time, but little evidence of differential manager skill." In other words, sure, theyâre great diversification vehicles, but trying to pick a manager who can do it consistently well is a crap shoot. Tracking investor returns was complicated by severe survivorship bias: Only 25 of the original 108 funds survived the six-year period of the study! Investor returns were not available in the year a partnership was merged, terminated, or went bankrupt. cheers
"So, for regular daytraders, I believe a TOP day trader can do 100% /mo, a good daytrader about 30-40%, a proficient and dedicated trader on the first years about 20%. " some of these numbers being thrown around are silly.its not possible to do 100% a month for any length of time.here is why.1 penny doubled 30 times is over 5 million.so how much would an account of say $100000 doubled 30 months be?the numbers are so large its astounding. http://ultimate-home-based-business.com/penny.html
>some of these numbers being thrown around are silly I guess the reality is silly ?! Reread my posts. I wrote : =============================== My 100% figure applies mostly to professional daytraders with their trading as their main income source. The kind that keep just what is required to fit their risk management in their account and do not compound. Others with other sources of income and large assets aside can use compounding on appropriate time-frames and much more, then the perf is no longer a matter of comparison with other traders since they reach absolute exposure levels insane to most people. ========================== I wrote this just because I was expecting someone to try being a smart*** with compounding effects ! >its not possible to do 100% a month for any length of time.here is why Maybe you should call Bright, LGT and Schonfeld to tell them that their traders are doing something impossible.... When in doubt, check the reality, it might do you more good than speculating on wether something is possible or not... OHLC
but, the point is that without compounding all numbers are irrelevant and don't tell you anything worth knowing... ie, who really cares if somebody manages crazy percentage numbers as long as they cannot compound them... that is the difference between a salary that from a risk/reward point of view isn't all that attractive, vs earning some real big money by compounding. it really comes down to the basic question, what would you rather be, the best swinging trader around who can catch every fluctuation but still isn't moving forward equity wise much, or a wizard of compounding like soros who famously missed many more swings than he caught but still became one of the very few bilionaire traders around because he understood compounding a "meagre", hmm, irony here, but annualised compounding rate of return over decades of around 30%. cheers