Average % return for profitable traders
- Thread starter Daal
- Start date
I think it depends on the year... in some years 500% is doable... this is tempered by other years with double digit returns... the main thing is to trade with consistency, be willing to adapt and keep your stops... once you have reached a certain account size, you don't need to do more than 50% to have a less frantic trading life and still maintain a good living...
Bingo! Isn't that the point?
Tongue-in-cheek aside, the market has no clue whether you are trading 50 contracts with a 55k account or a 5mil account -- the trade is the same, just a matter of what you're personally comfortable with.
In any case, getting back to the point of the original thread, there is no purpose in thinking in terms of "avg returns" -- a valid edge combined with rock steady discipline won't give you avg returns, it should give you extraordinary returns, so don't ever be satisfied with average -- find that true edge!
I kind of think the original point of the thread actually was perhaps to compare the rates of return between daytraders and swingtraders.
I do think the ability to hold positions overnight is useful, you can't always be absolutely perfect in your timing, but patience is a real virtue in profitable trading.
I do think the ability to hold positions overnight is useful, you can't always be absolutely perfect in your timing, but patience is a real virtue in profitable trading.
It also depends on how much capital you are talking about. The more capital - the harder to get the higher percentage returns.
I'm not sure why this is, but I suspect that a system that is being employed with a positive expectancy has only so many opportunities and so much liquidity (on the other side of your trades) to be able to take advantage of those opportunities.
I will chime in here and say that while measuring success by percentage return on capital is useful for the mutual fund manager, it is unhelpful and misleading for the daytrader.
I can go to a prop firm and put up nothing and if I make a profit, what is my return - infinity? High leverage at prop firms can typically make your percentage returns seem staggering. I find a much more useful measure - profit in dollars.
I'm not sure why this is, but I suspect that a system that is being employed with a positive expectancy has only so many opportunities and so much liquidity (on the other side of your trades) to be able to take advantage of those opportunities.
I will chime in here and say that while measuring success by percentage return on capital is useful for the mutual fund manager, it is unhelpful and misleading for the daytrader.
I can go to a prop firm and put up nothing and if I make a profit, what is my return - infinity? High leverage at prop firms can typically make your percentage returns seem staggering. I find a much more useful measure - profit in dollars.
I think this is the point, some years you can do much more/less.
It is not that hard to hit about 10% a month daytrading. This works out somewhere in the neighborhood of 100-200% a year. Key is low drawdowns.
For daytrading under 3 digits % it is not worth. If one do not daytrade 2 digits % is honorable.