Is it possible earn 20% a year swing trading stocks.

[Commodity_Trader]

20%, that's more than twice the average yearly return of the S&P 500.

Fact: most hedge funds cannot even beat the S&P 500.

It's still doable but you will need some leverage and a winning trading system.

it's completely possible ,and all depends on your trading strategy and it's drawdown .in FX market i made a near 100% return without using compound interest ( without increasing position size) some years ago
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i think if you want to obey ordinary strategies you will not do any better than average (which is loss).


i never been to hedge fund trading firm , but i really doubt they can all have a winning strategy , usually they manipulate market and make money ( i'm not sure about this although). you can backtest your strategy to find it out .

 

[darwin666]

20%, that's more than twice the average yearly return of the S&P 500.

Fact: most hedge funds cannot even beat the S&P 500.

It's still doable but you will need some leverage and a winning trading system.

THIS IS SUCH AN OVER LOOKED POINT>. seriously. 90% of all the folks in ET. will not even be able to Beat SPY. .in the long term....
when 90% of the damn hedge /mutual funds cant do it, with all their tools. .mathematicans/quants/ phds, semi inside edge, (go figure) connections, yada yada,, they cant do it consisstently.. then how the hell do you expect to...

buy VOO..... cheaper than SPY only 5 basis points while spy is 9.. points

 

[hoodooman]

Yes it is possible and its also possible to lose 10% in a day. I've done both. The one day loss was 24,000 bucks.

 

[Satan's Helper]

THIS IS SUCH AN OVER LOOKED POINT>. seriously. 90% of all the folks in ET. will not even be able to Beat SPY. .

Hold on there,

They will likely lose their account but please don't discourage the guests of Honer. We need them and their free will.....

 

[Commodity_Trader]

THIS IS SUCH AN OVER LOOKED POINT>. seriously. 90% of all the folks in ET. will not even be able to Beat SPY. .in the long term....
when 90% of the damn hedge /mutual funds cant do it, with all their tools. .mathematicans/quants/ phds, semi inside edge, (go figure) connections, yada yada,, they cant do it consisstently.. then how the hell do you expect to...

buy VOO..... cheaper than SPY only 5 basis points while spy is 9.. points

first quants / mathematicans /PHD's have some irrelated skills . Nasim Nicholas Taleb which holds Phd. in probabilities & math (who was capable of 115% return only in one month in october 2008 in middle of economic crisis ) says : even in the best financial engineering departments , "false sciense" is widely practiced .i had a chance to wok online with an australian quant in order to make an academic paper .what i saw during that 6 month was that they don' know anything practical about trading and especially charting.they would rather now more about programming and automation .
it's like achieving an skill , there are some people who can walk on a rope and even they make money from that .most of people can not . it takes years and many many many hours and a lot more mental power .99.9 % of people can not walk on rope even after years of practise.i think that's same.but it's DOABLE.

 

[Deep Algorithms]

20%, that's more than twice the average yearly return of the S&P 500.

Fact: most hedge funds cannot even beat the S&P 500.

It's still doable but you will need some leverage and a winning trading system.

This is a good point that is often overlooked. I just wanted to point out some additional information though, because once you consider everything behind this fact, it is a bit more illuminating.

Based on a study of a number of mutual funds and hedge funds over an extended period of time, the breakdown of returns is roughly as follows:

Before expenses:
- 10% earned excess risk-adjusted returns
- 85% earned zero excess returns
- 5% underperformed

After expenses:
- 0.5% earned excess
- 75% earned zero
- 24.5% underperformed

I am not sure these statistics are all that surprising though, since institutions make up such a large fraction of the market itself.

So is it possible for an individual trader to "beat the market" and make 20% returns (no leverage) consistently? Sure, as long as they are savvy enough to trade as well as the top hedge funds (with armies of talented people), since their expenses are certainly lower. This is where I think that in general the answer to this question actually becomes "possible yes, probable no". And claims of consistent returns beyond this I start to find a bit suspicious. With the use of leverage though (e.g., portfolio margin), I don't see a 20% return on the original investment as big of a deal.

 

[llIHeroic]

I always figured that the liquidity constraints are the only reason hedge funds are putting up the returns that they do.

I would be extremely surprised if a hedge fund full of educated people and high-end trading platforms/infrastructure couldn't double 100k in a year.

You can literally pull up a monthly bar chart of a few major indices, sketch in the current trends, and rotate through them buying at the bottom of the channel and dumping them at the top and you will blow away 10%-20% a year or whatever it is hedge funds are putting up now days.

I don't understand how whether or not beating 20% a year is even a legitimate debate on a site full of supposed traders.

 

[Wide Tailz]

+ to all the above. Small traders have the huge advantage of anonymity, especially if they scale in. :eek:

 

[xelite777]

I would be extremely surprised if a hedge fund full of educated people and high-end trading platforms/infrastructure couldn't double 100k in a year..

My friend, you are day-dreaming, NOBODY can consistently double his money every year.

At that rate you could turn $10,000 into $10,485,760,000 in 20 years.

Another 10 years and you now have more than 10 TRILLIONS dollars.

 

[Commodity_Trader]

My friend, you are day-dreaming, NOBODY can consistently double his money every year.

At that rate you could turn $10,000 into $10,485,760,000 in 20 years.

Another 10 years and you now have more than 10 TRILLIONS dollars.

it's possible and depends on trading strategy,etc.. .after a specific amount of capital , the trading time frame and liquidity will be an issue .
a Eurex (successful ) trader claims in his interview that he had problem with liquidity in intraday trading because he trades big contracts .even the best traders have some years (even in row) drawdowns. the consistency is not only consistency in profits , whether it may be tolerating loss periods and continue game .what you mentioned is exactly what Warren Buffet did. he trades from age of 15 and used compound interest .after 70 years he is the richest.