Before or after leverage?
The larger you get the more you run into liquidity issues rendering the supposed exponential growth of strategies a moot point. Big traders are essentially going to have fixed income.
How much can a retail algo trader expect to earn?
- Thread starter nemesis45
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Before or after leverage?
The larger you get the more you run into liquidity issues rendering the supposed exponential growth of strategies a moot point. Big traders are essentially going to have fixed income.
Actually, plenty of systematic people produce these kinds of numbers. What really matters is that it's usually fairly capacity constrained and the technology costs start eating into your costs.
It's much easier for a retail trader to produce nice ROC at good Sharpe than for a guy managing half a yard. You don't even need to find anything unique, for example any run of the mill cross-sectional strategy works much better when you only need to deploy a million.
Personally, I think there is ALMOST NO trader with annual 20%.
I hope to be a trader with consistent annual 10% compounded. (after tax+comm)
Furthermore, ALL of my return curve is HOPEFULLY between 8% and 12% ALWAYS. / No more.
PS) This is better (stable) than curve between 7% and 13%.
I hope to be a trader with consistent annual 10% compounded. (after tax+comm)
Furthermore, ALL of my return curve is HOPEFULLY between 8% and 12% ALWAYS. / No more.
PS) This is better (stable) than curve between 7% and 13%.
20%(even after tax) is on the very low end of the spectrum among the traders i know personally. If you can't net 200k on say a mil you probably shouldn't even bother at this as a full time endeavor.
As Santa already said, consistently earning 500k on 1m isn't all that rare, earning 5m on 10m and beyond, on the other hand, very much so.
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Recall that stock market was running for the last 400 years at Netherlands.
If there was any SINGLE trading logic with consistent 20% compounded, then he(his grandson) now has all the asset in the world, by 1.2^400 >= world population.
So empirically there was NO trading logic with 20% for 400 years.
It is like there was NO person with length of 2 meter, since there was NO single person with 2 meter for the last 400 years.
PS) Of course, there exsit trading logic with 10% or more. I saw it myself.
PS2) For the lifespan of 50 years (30 to 80), note that 1.2^50 = 9100.438 and 1.1^50 = 117.3909 and 1.15^50 = 1083.657
@jk90029 what you are ignoring is the capacity. Think of it this way - a guy working in a bodega on my corner has infinite return on capital. After all, he’s investing nothing and gets $10 (or whatever the minimum wage is). Yet I don’t see people lining up to be that guy.
There are a lot of little dusty dark corners in the market where you can make 100% annual return on tiny capital if you are willing to invest some effort. The question is “is it worth it?”. For a institutional trader, the answer is almost always “nope, it has to be bigger”. To quote Linda Evangelista, “I don't get out of bed for less than $10000 a day.” For à retail trader, on the other hand, making 50k on a capital of 50k might be a great business.
There are a lot of little dusty dark corners in the market where you can make 100% annual return on tiny capital if you are willing to invest some effort. The question is “is it worth it?”. For a institutional trader, the answer is almost always “nope, it has to be bigger”. To quote Linda Evangelista, “I don't get out of bed for less than $10000 a day.” For à retail trader, on the other hand, making 50k on a capital of 50k might be a great business.
I think you might want to google the concepts of marginal cost and marginal utility
LOL, this is actually the point I am trying to make. The banker very rightfully would want to pay you a lower rate for a small account. You're asking a bank to provide you a service, i.e. take your money and lend them to someone else. The banks revenue is the spread, e.g. borrow from you at 1% but lend it at 2%. However, the costs per account (paperwork, bankers time etc) are mostly fixed and that makes smaller account less profitable. So the banker wants a minimal capacity to justify his time and costs.
I agree banker need equal time, for 10K customer and 1000K customer.
Likewise, we (traders) pay same time and risk to run account with 10K and 1000K.
Thanks for easy writing for me whose English is below average.
PS) If we run and expect 10% with 10K account, then we should expect annual 10% for 1000K account too.
The same is reasonable for the reverse too.
Likewise, we (traders) pay same time and risk to run account with 10K and 1000K.
Thanks for easy writing for me whose English is below average.
PS) If we run and expect 10% with 10K account, then we should expect annual 10% for 1000K account too.
The same is reasonable for the reverse too.
Not true. Iceberg orders exist for a reason. There are funds who operate on weekly bars because they can’t stop out