Anyone actually make living from trading?

[globalarbtrader]

All well and good, but I still ask what is the point of someone full time trading to make 25% on say $100k (if they even have that much to speculate with in the first place). I mean that is $25k. The newbie trader would be better off being employed somewhere.

That's why I say a small trader must try to make 100% or more on whatever capital he has. That's not to say risk management should not be employed, of course it should.

Someone with $100K shouldn't be full time trading, full stop. I thought I'd made that clear already.

And, to reiterate: you can't consistently make 100% a year without taking insane risks unless you are an extraordinarily good trader (say in the top 0.0001% - since to expect to make profits in a 95% expectation range of say 100% to 200% a year your Sharpe ratio must be around 6.0, which would make you better than every single hedge fund in the world except for the top half a dozen HFT firms). The corollary of this is that there is a 99.999% chance that someone who tries to consistently make 100% a year will be taking insane risks.

GAT

 

[Turveyd]

All well and good, but I still ask what is the point of someone full time trading to make 25% on say $100k (if they even have that much to speculate with in the first place). I mean that is $25k. The newbie trader would be better off being employed somewhere.

That's why I say a small trader must try to make 100% or more on whatever capital he has. That's not to say risk management should not be employed, of course it should.

For most of us me included, 1,000% is required year 1 of profitable.

Forex and 100:1 margin, put 25% a week into easily acheiveable, IF your good, for a small sub 10K account. Wouldn't trade that much risk with a 250K account mind, hell no, still want 50% min on that mind per year.

 

[SoesWasBetter]

Disagree. The smaller the account the more aggressive a trader should be. I trade anything that moves and if bitcoin is moving, I'll trade it. The market for bitcoin is over 100 billion. Unless you have billions, why wouldn't you trade it? The reasons you have given are not good enough for anyone under a billion to trade.

Bitcoin is pure speculation, there is no S/R, no real historical data to go on and macro news like interest rates does not affect it.

If you are not up over 100% year to date on a small account under 1 million, you don't know what you are doing.

No excuses

Try cutting off the other ear.

 

[Overnight]

...

If you are not up over 100% year to date on a small account under 1 million, you don't know what you are doing.

No excuses

Are you out of your Gauguin-deluded mind?

You should eat your severed ear, so you can hear yourself speak.

 

[Turveyd]

Are you out of your Gauguin-deluded mind?

You should eat your severed ear, so you can hear yourself speak.

I know a lad going back 20+ years trading stocks on ClearStation, started with 10K lost down to 3K pretty quick, stopped trading to research it, found a method got very good and switched on, million air inside of 2 to 3 years, it's very very very rare, but it can and does happen.

Keep the dream alive, without that, working rest of my life and barely getting by, kill me already!!!

 

[ironchef]

Sorry, I really don't buy the argument that there are limited capacity strategies that only small traders can use. Any given high frequency strategy has limited capacity, but big HFT shops diversify across thousands of instruments, making it economic for them to use that strategy. Yes, small cap stocks have limited capacity, but decent sized small and micro cap funds exist that hold hundreds of stocks.

The reason bitcoin isn't attractive to professional investors isn't because they're large investors; it's because they're not stupid. There are a significant number of reasons why trading bitcoin makes almost no sense whatsoever. It's also a poor example since BTC etc has only been around for a few years, but this nonsense that small investors can outperform larger ones has been around much longer. Give me another example.

I'm not doubting that there are small number of retail traders who can achieve returns much better than the average institutional trader (and about as good as the best institutions, although not as good as HFT shops), but they are a tiny fraction of the trading population, and nearly all of the people who claim to be in this bracket are (a) lying or (b) have a relatively short track record which isn't statistically meaningful (and are probably trading something with latent blow up risk).

The second part of your post illustrates exactly why small investors shouldn't be aiming to make large returns. In doing so they'll probably take on too much leverage or trade too often. Unless they are in the tiny percentage of elite traders (sorry for the pun) who can actually consistently achieve a SR of 1.0 or more they're going to be over betting (significantly higher than full Kelly) and end up blowing up.

Even very good retail traders are unlikely to be making 25% a year; since they're probably running at a more conservative risk / return target (because they're not morons). The best guy on fundseeder.com with a track record that is actually meaningful has a Sharpe of just over 2.0 with nearly 5 years of trading on an average 250K account (and looking at their account she's regularly withdrawing her profits rather than leveraging up). But she's running at a mere 15% vol which means her annual returns are 67%, 27%, 15%, 16% and 35%.


GAT

May I ask where you obtained the statistics on returns by professionals and small mom and pop retail traders?

 

[VincentvanG]

Are you out of your Gauguin-deluded mind?

You should eat your severed ear, so you can hear yourself speak.

Not everyone trades as poorly as you noob

 

[VincentvanG]

Try cutting off the other ear.

Again noob.
If you cannot achieve those returns you are so far behind from those that do noob

so many noobs on ET

Repeat if you haven't returned at least 100% on a small account less than 1 million so far this year, you are a NOOB

Raise your standards noobs

 

[globalarbtrader]

May I ask where you obtained the statistics on returns by professionals and small mom and pop retail traders?

It's well known that the average retail trader loses money. The performance of retail traders is strongly skewed, with a big fat bunch of losers and then a thin tail of winners.

I assume that the people on the leaderboard at fundseeder.com represent a selection of the very best retail traders. Unfortunately they only have five year track records max.

Average SR in the industry are much lower than people realise. Rentech are probably the most successful hedge fund in the world. Their Sharpe is about 2.5. It's incredibly rare to find a manager with a meaningful track record (say 20 years plus) with a Sharpe Ratio over 1.0, never mind 2.0.

From public filings by listed HFT firms we know that they can achieve high single digit SR.

GAT

 

[murray t turtle]

The 1st sentence is incorrect...small traders should be trying at least to make very significant percentage gains, strategies/tactics/instruments can be used by 'small' money that 'big' money has no interest in. An obvious example is bitcoin and other cryptocurrencies...small traders can particpate and make serious percentage gains, at least some big money is not interested (see Jamie Dimon warning against any of his traders playing with bitcoin)

The 2nd statement is true...the world is not full, however there are those small number who do make significant percentage increases on small amounts of capital.

%%
Good points, about JPM warning of bitcon fraud + JPM chief compared it to tulip mania.That's in the past however, looks like the bitcon fraud is going to battle it out with bitcon shorts, shortly.
NOT sure it is as good as tulip mania; with tulip mania @ least you had an good looking overpriced tulips when you got caught holding the bag.
I do like the bitcon ads/pics even though bitcoins coins look real easy to counterfiet; but having never sen a real bit con coin, maybe wrong on the counterfiet ease?? LOL[Source MODERN TRADER magazine NOV 17 issue]