Now we are getting somewhere...thank you.
NiN
Average daily profit with $50K account?
- Thread starter fcg007
- Start date
Now we are getting somewhere...thank you.
NiN
Basically.
For #1, consider if you and I both trade 2 ES contracts a day and we sit side by side and we always take the same entries and exits and we always make $500 per day, but your account has $1M in it and mine has $10k in it. After a year, we've both made the same amount of money on the same amount of contracts, yet my % gain is much bigger. But that's pointless, because our performance was identical. So if I were to go around bragging about how I'm so much better of a trader than you because I made so much more percentage that you, it wouldn't actually be true because we actually had the same trading performance.
Percentage matters if we're a fund investing other people's money, not if we're traders for ourself.
No I disagree with this. I believe percentage does matter for traders. Because trading performance is a measure of a trader's efficiency in utilizing his resources (mainly capital), whether the money is managed money or one's own money.
If you have only access to $10k and you can make $100,000 profit out of it, you are much more efficient than me trading with $1million to make $100,000. You are 100 times more efficient than me.
If I have one million dollars, I can probably find some very-minimum risk bonds to make 4%-5% a year. This equates to $40k-$50k. That's income to me without lifting a finger. Would I be using this capital to trade everyday, risking the capital, to get a $100,000 profit?
And with $1million at my disposal, would you think I will be only trading 2 ES contracts at a time?
I believe that trading skills are not directly scalable. Meaning that the way I trade if I use $10k as trading capital is very different from the way I trade if I use $1million. Part of it is because of risk tolerance. Others are the market impact costs and speed of trading activities, etc.. It is a lot quicker to buy/sell 2 ES contracts than to buy/sell 100,000 shares of stocks. Steering a cargo ship is much more difficult than steering a jetski.
I think the discussion is a little off - and the lats remark was ok. Traders in general dont work for % - although percentage is definitely a sign of efficient capital allocation.
A trader is not paid for his money, but for his time and skill. The percentages may look crazy, but if I see waht I get paid for in my current gig I make about, taking costs for travel etc. as investment, 500% monthly. But like a trader I am not so much paid for my ability to finance the job, but for my skill and time.
Traders at one point either get uncomfortable with the size they have to move (so they take money out and stay at the same size) or hit a saturation limit (as in: you can not trade unlimited amounts of money - the market is just not liquid enough).
As for reasonable returns...
for USD 500 I would expect to see the use of a maximum of 3 contracts ES, and that is pretty conservative (assuming 3-4 trades per day, average 50 USD profit each). There are some simple strategies that can do that.
Three ES one can trade intraday SAFELY with around 15.000 - having PLENTY of reserves for drawdowns. Depending on broker you may need up to 6000 USD actually, some would allow that for less than 1000 (i have seeen 300 USD per contract as intraday margin). Now, DOING that is anothe rmatter - but if one has the skill and a prooven system that is about what I would expect in numbers.
Forex would be pretty similar in returns.
A trader is not paid for his money, but for his time and skill. The percentages may look crazy, but if I see waht I get paid for in my current gig I make about, taking costs for travel etc. as investment, 500% monthly. But like a trader I am not so much paid for my ability to finance the job, but for my skill and time.
Traders at one point either get uncomfortable with the size they have to move (so they take money out and stay at the same size) or hit a saturation limit (as in: you can not trade unlimited amounts of money - the market is just not liquid enough).
As for reasonable returns...
for USD 500 I would expect to see the use of a maximum of 3 contracts ES, and that is pretty conservative (assuming 3-4 trades per day, average 50 USD profit each). There are some simple strategies that can do that.
Three ES one can trade intraday SAFELY with around 15.000 - having PLENTY of reserves for drawdowns. Depending on broker you may need up to 6000 USD actually, some would allow that for less than 1000 (i have seeen 300 USD per contract as intraday margin). Now, DOING that is anothe rmatter - but if one has the skill and a prooven system that is about what I would expect in numbers.
Forex would be pretty similar in returns.
Piggy, there are two different tasks:
1) Earn 10% per year
2) Earn 10% per year with maximum 2% DD. Under the restriction of 2%DD!
Again it is REGARDLESS of your leverage. The ratio remains the same, 10%/2% = 5. Or 250 000 / 50 000 = 5, period. If you leverage less you experience less DD but you DO NOT reach your profit target, period.
Let me give you another example.
There is a single stock on the market which you can buy. If you buy it and hold till the end of year you receive 100%, but meanwhile you experience a DD of 33%.
Now you want to make 200%, is it possible? Yes, you buy that stock with the leverage of 2:1 and at the end of year you receive 200% but your DD will be 66%.
Now you want to make 300%, is it possible? NOT. Because of when you buy this stock with the leverage of 3:1 you aim to receive 300% but your DD is 100% and you loss the entire position.
Is it so complex? I just have no other words, only swearing.
Now I know somebody will tell me that trading is different. That you not buy and hold but rather buy different assets and divercify your position. You might say you would sell the position during the DD and buy it back when stock will be in the UP trend. But I know what would be my reply. Stupidity is endless.
Discretionary traders live for the money from market. It is hard to calculate the % return because of they have multiple withdraws. They do not see the forest behind the trees.
But system traders test their system based on history. They understand the statistics, the historical DD and expected DD. The daily average PnL. The ratio of yearly return / DD.
System traders think of % return. The ES market is very liquid and you may trade hundreds of contracts before you reach your limit.
Again you post your expected returns but without exact value of DD. You post that "15 000 is safe level". I read history of your posts. You just opened an account and want to go live. I believe that when you start trading live you will forget about this statement "3-4 trades per day, average $50 profit per each". This is a complete BS.
Your believes, sadly, are irrelevant stupid ramblings. Sorry to say 
Quote from NetTecture:
Your believes, sadly, are irrelevant stupid ramblings. Sorry to say
Ok could you please post a screenshot of your daily PnL and amount of ES traded? Or may be you will be so kind to share these "very simple strategies" which allow you to make $150 per day per ES contract? I am away, there is a long queue buying popcorn and waiting for show.