I find it's an inverse relationship. The correlation of the two variables is changed as the $ amount goes up. So, if you have 50k in account A, a reasonable person could make 25% in a year. 500k in account B, a reasonable person would not be able to handle the risk, or some other factor relating, so he/she could only realize a 15% return. I could be dead wrong though. -Kastro
Hi Kastro, It has nothing to do with not being able to handle the risk (assuming you are prepared psychologically and have iron discipline). Paul Tudor Jones said, that getting 100% is absolutely doable if you trade small, and I am sure that his definition of small is different from most people. Turning 100K into 200K, or 500K into 1MIL is the same because there are a lot of instruments out there where volume can absorb such trades, but 10mil to 20mil is very different, and 100mil into 200mil is one verge of impossibility. Regards, redduke
I understand what you are saying and I agree with you 100% The two variables I stated are not just limited to risk, but to what you are saying also. Turning 100k into 200k is quite possible, but like you said, turning 100m into 200m is quite hard, if not impossible. If it was possible, I am sure someone would have done it. If that person did happen to exist, he or she could buy the world Heck, why no turn 100T into 200T? Or 100S into 200S? -Kastro
What about the time you spend? I make a rate of 36-84% per year on my initial capital placed in my account, adjusted for withdrawals and deposits during the year. Else I need more capital or I need to improve, because I spend more time than anyone on this board to make it. Wifey and I split the two trading shifts! In the quest to control risk, often the yield is tamed to the point where I have relaized there must be a balancing of time. Increase the risk...or....decrease the time.... We have a small 9k account. Now add some zero's to this and it can make sense. Its the same with Retail Spot Forex as it is with Futures. You must be well capitalized and risk a microscopic amount of capital. As far as liquidity there is never problem in Forex and it would take years for us to pyramid the numbers up large enough to break out of Retail. Michael B.
I personally stay away from goals. Some systems have wild roller coaster rides where other systems produce a smooth upward sloping equity curve. Electric will tell you he prefers smooth upward sloping equity curves with no jagged edges, even if they yield less. Where I prefer the excitment of catching the spikes. When I work my shift, I am waiting for those spikes with my finger on the trigger. This is why I can only scalp/arb for 4 hours at a time, as it is impossible to keep focused longer. Everybody has a different personality. Do not limit yourself. Wifey
Hey, I am just thankful to have a system that has an edge. If you really want to improve, find and rank your set ups and increase and decrease your trade size accordingly. This is the most valid method of money managment in my opinion...toss Kelly, Optimal F and FRM out the window. Forget goals...the market has no idea what they are....As far as a benchmark for what to do....compete with yourself and constantly improve. You must start somewhere. You might end up someday outperforming the pro's...don't give up... Good trading to all of you and see you out there Michael B.
I love threads like this - How much can you make? What do I need to get to XYZ% returns? When does liquidity start to affect my trading? Setting these goals and working towards them is important and it was goals such as this that forced me to consider FOREX as my primary market. Best of luck to you all, Granville