Depends on how you figure the 100%
I think he is basing it on a 50k return on the 50k account.
If you do the math, the 50k account is 420k notational based off a 5 lot of es
So the real return is right under 12% and not 100%.
How profitable are the traders and coaches at tst ?
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Depends on how you figure the 100%
I think he is basing it on a 50k return on the 50k account.
If you do the math, the 50k account is 420k notational based off a 5 lot of es
So the real return is right under 12% and not 100%.
On 1/1/14 if I have 50K on deposit at a futures firm and I trade 5 lots of ES (or 4 lots or 6 lots) and at the close on 12/31/14 the equity in my account is 100K in what sense have I not done a 100% return.
BTW ... I'm not in anyway suggesting that is easy to do or even doable on a consistent basis nor am I subscribing to anyones (Pekelo's) broader opinions. Just trying to figure out your math. If the risk is acceptable to me then it is acceptable.
BTW ... I'm not in anyway suggesting that is easy to do or even doable on a consistent basis nor am I subscribing to anyones (Pekelo's) broader opinions. Just trying to figure out your math. If the risk is acceptable to me then it is acceptable.
1. Correct, that's what I did. But as I mentioned, the account value is inflated, so the real account is actually much smaller.
2. Nope, the real account value is: (max. cars X daily margin per car) + max DD + min. required balance
So in the case of ES, depending on the broker (let's say 500$ daily margin per car): (5 cars X 500$) + 2000$ + 1000$= 5500$
But let's say the broker has a 1000$ margin per car, that is still only a 10K account, not a 50K.
3. So the real return is actually much higher, not lower, because you make way more money on a much smaller account.
Of course, the math is different for other futures like oil, gold.
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I think I was generous with the 420K profit with 20 profitable traders, since we know that by last year none made at least 30K. That might have changed in the last 12 months, but I don't think more than a few traders reached that level...
Return on what ?
capital ?
or investment ?
If I make $250 every week for a year trading 1 es contract using $500 day trade margin what is my return ?
This very thing is what makes the account values on the combine pointless because you are not holding overnight so the only thing being traded is intraday margin for max contracts plus the max drawdown they give you.
I went through the math before. The most logical way to deduce your equity value is to solve backwards from your daily risk. I think it's pretty standard to use a 2% daily risk allowance give or take and this is how TST came up with the account values. So based on 2% daily risk, that would be a $1000 daily loss which corresponds to a 50k account. I've been trading for 16 years and I've used the 2% metric for as long as I can remember. I even error on the more risk averse side and say 1% daily risk with a 2% max with the max being rare.
So the easiest way to do this is to ask, if you had a 50k account you were managing, what would be your daily risk as a daytrader? In other words, what would be your stated risk parameter. And let's assume for arguments sake the investor wants you to have one. Are you going to risk $500 a day, 1k,10k?
Notional is irrelevant and so is margin. Fund managers get graded on risk on capital, not anything else. Stick to the industry standards.
Your math is correct. And it's the only math that matters. If I invested in your fund with 50k and after one year you said to me, we had a great year, we made 1000% on margin. And then you told me my 50k account is now worth 52k, that's only a 4% return. I could care less about return on margin.
So if you front me $2500 and I return $4000 back to you in 10 trading days what would you say the return is back to you ?
First of all I would be quite pleased if the risk parameter was within the agreed limits and I would say there is only one number to describe the return: 62.5% over a 10 day period. You could obviously annualize that return on a compounded basis to a stratospheric number but that would be warping reality for you would have no reasonable expectationsof anyone repeating that performance multiple times.
But the return is 62.5% over 10 days. To simplify the math if you gave me $5,000 back it would be a 100% return over 10 days.
But the return is 62.5% over 10 days. To simplify the math if you gave me $5,000 back it would be a 100% return over 10 days.
