Educate me. I thought 50% a year was good

ElectricSavant

ElectricSavant

I recently got a PM telling me what some people are making trading their own systems, working for prop shops. Those days are over for rebate traders/scalpers, but there are probably new ways exploited now.

It set me back a notch. I am told I am trading an "investment grade" system, not a "trading grade" system.

Should I be pursuing triple digit returns or should I continue plodding along with controlling drawdown and setting my goals at 1:4 max risk to cumulative profit ratio?

I guess what I am asking, is what is considered a good system? I realize this has been asked before, and I have even answered some people in those threads, thinking I knew the answers, for which I apologize now, in light of this new information I have received.

To get into the insiders club/circle, how much do I need to produce? 50%?....100%......1000%....9000%...I think drawdown should max 20% right? with a minimum of 2 years track record right?

What is Traders Grade? and What is Investment Grade?

Michael B.

P.S. I do not have a degree and I am not a quant...just a pure trader. So HF's will not have me, I don't think. Now don't laugh, I trade Retail Spot Forex.
 
I'm at 41% for this year doing Forex only (I go August to August). Though I'm not a full time trader (having a regular day job) I consider this just peachy for me. If everyone says it sucks, then it sucks. I'm happy.

What's important to me is that you hit whatever goal (reasonable goal) you set out for in the beginning of the year.
 
Well, Ivanovich, I am in the same boat, I have a day job too, but I work on the phone from home, so I have freedom to glance at the charts throughout the day here in Denver, CO.

But, There is real money to be made, with access to capital. And liquidity is not a probem in Retail Spot Forex up to 10 million per trade as far as I know.

Michael B.


Quote from Ivanovich:

I'm at 41% for this year doing Forex only (I go August to August). Though I'm not a full time trader (having a regular day job) I consider this just peachy for me. If everyone says it sucks, then it sucks. I'm happy.

What's important to me is that you hit whatever goal (reasonable goal) you set out for in the beginning of the year.
More...
 
Your system is fine. There might be a few individuals whom are making more than that on there money but they are most likely accepting more risk and working harder than you. When it comes to returns, compare your results to the index's for risk vs reward. Your system is returning 5X that of the avg S&P return, and those are good numbers. There is always some guy making more, don't worry about them, just keep focused on your own systems and trading.

On the other hand, I have seen too many one hit wonder guys come and go as well, so while you should be excited about your success don't become complacent. Successful trading is about being consistent, making money year after year, IMO!
 
ES

Do you have a system that you use or is a discretionary?

The issue is that if you have system, brokerage firms will promote for you you simply get registered with the NFA and then only question they ask is your track record

On the other had... if you are a discretionary trader... than OH MY GOD, you can't be any good without an Ivy league degree...

So to be taken seriously you need BA, MBA, Phd, you name it the more the merrier.

Now as for your original question... To me 80%+ is what I aim for. The nice thing is that I can attain it on a system that makes about 50%. So as you know the remaining is money management.

And then there are your goals that are not performance based. Retire, Travel, etc...
 
Quote from ElectricSavant:

To get into the insiders club/circle, how much do I need to produce? 50%?....100%......1000%....9000%...I think drawdown should max 20% right? with a minimum of 2 years track record right?
More...

Percentages can offer misleading results. A 200% return on a $10,000 USD account provides fewer real dollars than a 30% return on a $100,000 account. In this example using percentages as a benchmark results in comparing apples to oranges.

If you want to join a club, try Kiwanis, Moose or Knights of Columbus. Comparing yourself to another trader offers little in the form of useable benefits. Comparing your current status to your own goals fosters growth and shows achievement (or required improvement).

Determine a dollar value for living the life of an independent trader (without answering to a supervisor) and the freedom obtained from such an endeavor. Add to that value your living expenses and costs for travel or other hobbies. Lastly, determine dollars required for account growth and retirement savings. If your system meets or exceeds the total dollars required, then you already have achieved greater success than the majority of posters on this board.

- Spydertrader
 
seems like good advice...but you would not believe the "filthy" amount of money some traders are making!

Quote from mschey:

Your system is fine. There might be a few individuals whom are making more than that on there money but they are most likely accepting more risk and working harder than you. When it comes to returns, compare your results to the index's for risk vs reward. Your system is returning 5X that of the avg S&P return, and those are good numbers. There is always some guy making more, don't worry about them, just keep focused on your own systems and trading.

On the other hand, I have seen too many one hit wonder guys come and go as well, so while you should be excited about your success don't become complacent. Successful trading is about being consistent, making money year after year, IMO!
More...
 
Micheal, unless you aspire to billionaire status you can do very well just trading your own small capitol year after year and save yourself a lot of pressure and headaches (you have read Marty's book i am sure).

I have been offered OPM many times but I have made a good return and I don't even trade all my own just a small fraction each year so have not found it to be worth it.

Good luck and happy that things are going well for you and yes 50% a year is very good, esepcially if you can repeat year after year.
 
I am demonstrating my system here and it is a system. I can improve it through discretionary experience because I wrote it, but I have just about covered all the rules and am trading it publicly here in ET and building my track record:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=51992

It seems everytime I post this sort of thread, it appears I end up posting my thread. It really was not my intention on selling myself. I just want to know how hard I need to push myself and what "traders grade" is with Forex?

I am a former CTA and am licensed with the CFTC, but not registered with the NFA currently, as I did not want to pay the 1k because I do not trade other peoples money any more. I am told to trade Forex I do not even need to be registered. But I pay my license every year to the CFTC anyways, so that I do not need to take that horrible series 3 again (it was very hard for me and I had to take it three times to pass).

Michael B.


Quote from protrader-2K5:

ES

Do you have a system that you use or is a discretionary?

The issue is that if you have system, brokerage firms will promote for you you simply get registered with the NFA and then only question they ask is your track record

On the other had... if you are a discretionary trader... than OH MY GOD, you can't be any good without an Ivy league degree...

So to be taken seriously you need BA, MBA, Phd, you name it the more the merrier.

Now as for your original question... To me 80%+ is what I aim for. The nice thing is that I can attain it on a system that makes about 50%. So as you know the remaining is money management.

And then there are your goals that are not performance based. Retire, Travel, etc...
More...
 
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