pathetic again!
if you lose your entire capital 40k are you going to say your rate of return is minus20% ?
tell that number to your spouse when you apply for food stamps.
Are Any EliteTrader Users In A Prop Firm? What Are Your Returns Like?
- Thread starter RichLyons
- Start date
if you lose your entire capital 40k are you going to say your rate of return is minus20% ?
tell that number to your spouse when you apply for food stamps.
Hey, you can buy steaks with food stamps!
you are not a businessman, it is like people who buy a car on credit and only care about the monthly payment and not the rate of interest. car dealers have gotten rich off those people.
better still find a junkie who prefers a drug fix to eating. he sells you his food stamps for .50 on the dollar. now you can eat 2X of steak or you buy upgrade to filet mignon..Hey, you can buy steaks with food stamps!
Huh? In that situation you lose 100%.
pathetic.
you have to start from the same point. loss and win % are the same except one is minus and one is plus.
it is a waste of time explaining.
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Calling people pathetic is a great way to start a discussion...good one. <ignore list>
the reply is pathetic not the person. i should have made it crystal clear.
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I think there are two aspects of this, and this may be where the English language lets us down a bit with regards to nomenclature:
Return, suggests how you made off of how much you invested. It is slightly misleading to refer to the base cash amount as opposed to the actual leverage amount when you want to talk returns.
Income, suggests how much you actually made. Regardless of how much deposited or leveraged.
So for example:
40k deposited, 10:1 leverage, 400k capital used.
Profit of 90k = 22.5% return
So you could make the statements:
A 22.5% return was enjoyed on the portfolio.
A profit of 90k was made on the portfolio.
Stating 225% return (90k on a 40k investment) is slightly misleading unless you explain the full context:
A 225% return was enjoyed on an initial investment of 40k due to 10:1 leverage.
But if you want to get pedantic, it could actually be worded:
I lent 40k to a broker who lent me 400k in return. I then used this 400k to make 90k profit, resulting in a 22.5% return on investment.
The understanding of wording in this manner can be seen more clearly if we use an extreme example:
I had 0$, I borrowed 400k from a loan shark who would break my legs if I did not pay him back in one month. I made 90k profit.
Was the return 22.5% or Infinite?
Now, when it comes to measuring your success, the % return should really be based off of your total capital used (400k). The amount of leverage you get from a broker is not really relevant to your trading skills.
For example:
If you claim a 225% return, then by that argument if you were funded 100k cash without leveraging abilities you should still return 225%.
By basing it on the actual capital, comparisons can be done between those who are unleveraged, 4:1 leveraged, or 10:1 leveraged and allow for realizations of who was the more successful trader.
Return, suggests how you made off of how much you invested. It is slightly misleading to refer to the base cash amount as opposed to the actual leverage amount when you want to talk returns.
Income, suggests how much you actually made. Regardless of how much deposited or leveraged.
So for example:
40k deposited, 10:1 leverage, 400k capital used.
Profit of 90k = 22.5% return
So you could make the statements:
A 22.5% return was enjoyed on the portfolio.
A profit of 90k was made on the portfolio.
Stating 225% return (90k on a 40k investment) is slightly misleading unless you explain the full context:
A 225% return was enjoyed on an initial investment of 40k due to 10:1 leverage.
But if you want to get pedantic, it could actually be worded:
I lent 40k to a broker who lent me 400k in return. I then used this 400k to make 90k profit, resulting in a 22.5% return on investment.
The understanding of wording in this manner can be seen more clearly if we use an extreme example:
I had 0$, I borrowed 400k from a loan shark who would break my legs if I did not pay him back in one month. I made 90k profit.
Was the return 22.5% or Infinite?
Now, when it comes to measuring your success, the % return should really be based off of your total capital used (400k). The amount of leverage you get from a broker is not really relevant to your trading skills.
For example:
If you claim a 225% return, then by that argument if you were funded 100k cash without leveraging abilities you should still return 225%.
By basing it on the actual capital, comparisons can be done between those who are unleveraged, 4:1 leveraged, or 10:1 leveraged and allow for realizations of who was the more successful trader.