bps matters because you are quoting percentage returns. 100x or 200x is a percent return. You scaled your position up because the notional went up. If you are earning the same number of points your are earning fewer basis points. But my point originally about the bps was to show the lower volatility of the spx which means to earn 200x you would have to capture 100 days of the average spx daily volatility perfectly right out of 250 every year and compound those gains. And have no losing trades.
How do you determine your denominator (capital invested) as a day trader?
The way it works for me is very simple:
- I invest $xxx in an account to trade ES futures.
- I also invest $xxx in an account to trade BTC.
I watch how much money there is in both accounts in 2021 and see that the amount in the ES account is much bigger than the amount in the BTC acccount. That's clear and hard proof, and the only thing that matters. In both accounts the starting capital was the same and each account could maximize the specific advantages of that account to make money.
ES has advantages from compounding, leverage, small margins and high frequency of trading. ES demands however more screen hours and size is limited (so no endless compounding).
BTC has the advantage that market can go crazy and explode. But it can also implode, or needs years to recover from a drawdown (happened twice). During these recovery periods the ES continues to make money every day.
You scaled your position up because the notional went up.
The notional of BTC went up too. So no difference.
But my point originally about the bps was to show the lower volatility of the spx which means to earn 200x you would have to capture 100 days of the average spx daily volatility perfectly right out of 250 every year and compound those gains. And have no losing trades.
I daytrade the ES, so several trades each day. Your point is only valid if I would trade only one time a day. Because of leverage I don't need to take average spx daily volatility perfectly as at (for example) leverage 10 I need only 10% of it instead of 100%. Leverage facilitates to get the needed daily returns. It is however working against you in a losing trade at the same speed. All depends of your daytrading skills.
Volatility is just one aspect, there is also margins, leverage, compounding, frequency...
To calculate the profits in ES you need to know:
- margin used
- account size
- maximum position you take
- expectancy
- compounding used or not
As you don't have that information you cannot calculate in any way what the returns of ES futures would be.
