Benchmark for Daytraders

S

shortie

would this be a reasonable benchmark that characterizes an average equity daytrader with account below 1M:
yearly profit 30%, yearly drawdown 15%?

the account/profit/drawdown are per actual account size.

by daytraders i mean people doing it for living, not those who just do it sporadically or those just trying it out.
 
IMHO the question might need a time framework in order to have a better chance of yielding any kind of remotely meaningful answer. Also, it depends what markets one intends to trade - e.g., expectations for futures would be different than for equities.

VERY general benchmarks ....

Year one:
lose 10% or less and chalk it up to tuition cost; be happy to have enough left to stay in the game

Year two:
breakeven to +10% ... congratulations, you matched the market

Year three:
+15-20% .. if you've survived to this point you should start to beat the market

Years four --- > [n]
Focus on adapting your strategies to changing markets ... markets always eventually change. With any luck, you should be able to consistently net 30% after your 4th or 5th year (possibly sooner if you put in extra time and have some extra luck).
 
Quote from shortie:

would this be a reasonable benchmark that characterizes an average equity daytrader with account below 1M:
yearly profit 30%, yearly drawdown 15%?

the account/profit/drawdown are per actual account size.

by daytraders i mean people doing it for living, not those who just do it sporadically or those just trying it out.
More...

First of all, how come you are being a daytrader thinking of a yearly P&L. I am being a daytrader thinking only of my daily P&L. And only if I don’t meet me daily goals i think about my acc. as in yearly terms.
 
i think your numbers r bullshit. anyone could make money day trading. maybe it took you that long to become successful, but it really does not take thaaaaat long.

it also depends, if someone gets it quick enough, you could make 40-50% in a month. depends on what and how you trade. but it is not necessary to pay "tuition".
 
Quote from ggoyal:

i think your numbers r bullshit. anyone could make money day trading. maybe it took you that long to become successful, but it really does not take thaaaaat long.

it also depends, if someone gets it quick enough, you could make 40-50% in a month. depends on what and how you trade. but it is not necessary to pay "tuition".
More...

He was asking about the "average".

Of course nobody could ever know the true answer to his question, but it was just my best guess and I'm stickin' with it. :cool:
 
A good daytrader should average at least $1,000 daily. That's the first benchmark anyone here who daytrades and doesn't reach should aspire to. After that, the sky and the limited liquidity of the instruments traded are the limit.
 
Quote from ggoyal:

i think your numbers r bullshit. anyone could make money day trading. maybe it took you that long to become successful, but it really does not take thaaaaat long.

it also depends, if someone gets it quick enough, you could make 40-50% in a month. depends on what and how you trade. but it is not necessary to pay "tuition".
More...

I've seen a few polls (including one at ET) that any one (as in most) can not make enough money to trade for a living.

The polls also suggest it takes about two years to become profitable enough to trade for a living.

However, the problem is that most traders blow out their accounts or didn't have enough capital to endure the two years of struggle prior to finding those consistent profits.

Another problem is that the few beginner traders that are profitable...

Usually doesn't last too much longer when market conditions change because they don't have the market experience to be able to adapt to a change market environment.

Also, shortie and tomahawk seem to be talking about traders trading for a living.

Simply, of course any trader can make some money but to do it consistently along with making enough money to pay their bills, support their family and lifestyle is a completely different story.

Yep, there are some traders that can trade for a living before their 2 year anniversary...

Reality is most cannot based upon what I've read.

Note: I trade futures and my above commentary involves futures traders.

Mark
 
''Average daytrader'' The average Daytrader is probably a very desperate person- if they have to rely on day trades to pay bills ,a car, mortgage etc, unless they were already independantly wealthy of coarse . Active trader came out with an accurate break down of the ratio of winning daytraders . Only about 10%actually make a profit...green on the year- of that 10% only half clear above 50.k ....most of them work for firms., not from home . The findings came from one of the biggest firms that do trader taxes in NY. Thats real . All kinds of guys come out with these fantastic claims that they know all these day traders that consistantly make huge money ......if they really researched it they find their a ton of big talkers and only a handful of big money makers and their not talkin much.....but dont get me wrong I want to be a profitable Day trader too and would love to quit my job , but i still havent found a method to consistantly make daily profits compairable with my job .
 
The first benchmark traders should pass is to trade profitably at the smallest size possible for a period of at least two weeks. From there, scale up your size, 100 shares at a time, ensuring that you are trading profitably, and your account is growing before stepping up to new size.

You'll find that a $100 a day is a good initial target, once that is achieved, it's fairly easy to expand that multiple by adjusting your size upwards. If one can achieve $100 per day with consistency, then it is very easy to get to the $500 per day level as trading is very scalable early on.

This is a business, treat it as such. Always put time into R&D as you'll discover edges come and go, the only way to ensure consistent profitability is to constantly research, adjust, and adapt to the current markets environment.
 
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