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

[Deep Algorithms]

Well, if you double a dollar every year for 20 years, you will end up with $1,048,576

Of course. But you're taking what I said out of context.

Commodity_Trader implied that compounding returns had something to do with being able to double his/her investment every year. I take this to imply the idea that after n years, there will have been an average doubling of the amount of initial investment per year, measured at year n, resulting from compounding returns. So, for example, investing $1 will lead to $20 after 10 years, or $40 after 20 years, or $60 after 30 years, etc. (i.e., essentially $2/year for n years). I know this is somewhat of a convoluted concept. But it is nonetheless a well-posed problem with a simple solution: the amount of annual returns (x) necessary to achieve this at year n is x = (2n)^(1/n)-1.

 

[deaddog]

20% a year swing trading stocks is not an unreasonable target.
You have to make 1 trade per week. That doesn’t mean you have to trade each week or close out a trade each week, only that you need to make 50 transactions a year.

Only take trades that will give you a 3 to 1 reward to risk to reward ratio.

Risk 1% of your account on each trade. (Your risk is the amount you lose when your stop is hit)

Let each trade hit the stop or the target.

You have to win 36% of the time to make your 20% return.

If you only win 25% of the time you break even and should probably take a long hard look at your strategy.

 

[Commodity_Trader]

20% a year swing trading stocks is not an unreasonable target.
You have to make 1 trade per week. That doesn’t mean you have to trade each week or close out a trade each week, only that you need to make 50 transactions a year.

Only take trades that will give you a 3 to 1 reward to risk to reward ratio.

Risk 1% of your account on each trade. (Your risk is the amount you lose when your stop is hit)

Let each trade hit the stop or the target.

You have to win 36% of the time to make your 20% return.

If you only win 25% of the time you break even and should probably take a long hard look at your strategy.

completely right .the trend followers usually have 20-30 % winning rate .in TF, the best riward/risk is 10:1 (in intraday CME commodities it's possible ) because say in a GC contract in 5 minute timeframe a typical candle length is 10 points which may be used as stop loss stop and a 100 point trend occurs almost two times per week in average.so even if only 25% of time you can take the trend you will be in a proper profit .(0.25 *100 - 0.75*10 ).
all depends on trading timeframe and strategy .an intraday trader
may have number of trades in one year that a position trader have in 10 years .so opportunity factor comes in.if 100% return after ten years of stock trading is possible and someone can achieve that ,in the same scale, some one can have same return in intraday trading in one year.

 

[Sergio77]

20% on the average is possible but not consistently otherwise you have to look for some junk bond that pays 20%. You may make 60% in a year and then -20% the next year and end up with some mean return. According to the cumulative distribution in this blog for SPY it would be an extreme tail event, about 5-6 stdev from the mean. Possible but difficult.

 

[Commodity_Trader]

Here is a longer back test.

20% can easily be done in a year and even a month if the account is small enough to get in and out of trades. Hedge funds are like a whale carcass that just dies. When they place a order every predator is feeding on them and that makes returns difficult.

Satan's Helper
i guess you may be interested in these charts .just look at winning percent profits and equity curve this system is capable of generating .

i included currencies with low volatility intentionally to show it's performance.

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[Scataphagos]

"... How likely would this be for an average person not a professional or insider to make 20%?

Not only possible, but reasonable.

However... you must take sensible, risk-limited trades + have the discipline to take proper losses to protect capital when it appears your play was wrong.

(When I was young, had little money and was trying to "make a name for myself".... I ran a mutual fund timing service as a RIA and traded mutual funds for a 41% average, compound rate of return for 18 years.... Got some ink from IBD and Barrons for my efforts. I know of what I speak.)

Today we have Long, Short, Leveraged "everything" possibilities. LOTS more potential than 20 years ago, but lots more risk as well if you are a noob or don't practice sensible loss-control discipline.

 

[Satan's Helper]

Satan's Helper
i guess you may be interested in these charts .just look at winning percent profits and equity curve this system is capable of generating .

i included currencies with low volatility intentionally to show it's performance.

Damn, you are hitting at 70 + percent! That is pretty good..

My only hits at about 45% but the average trade is high enough for commissions and slippage. I just tweaked it and the average trade is over $70 net. Average winning trade is 439.23 and the average losing trade is ($221.30). This is a day trading the system.

 

[Satan's Helper]

Include spread and commissions and most seemingly winning systems (like yours) become losing systems, or mediocre at best. And if your indicator is working why do you want to sell it and kill the golden goose?

The way I see it is. If I have the only indicator that actually works then there is a lot more money to be made on books, selling the indicator and videos. I am yet to find any indicators that works besides the ones I built. They all suck and no matter how you flip the numbers they all lose money very quickly.

Since I am not rich and don't have a large account. My last back test says I can make 300% + a year on a leveraged mini account. With my my risk tolerance (huge draw downs due to the leverage) I am lucky to make a decent salary with that.

But if I net $100 for the indicator and sell 2500 of them a year then I have $250,000 without any real risk and brokers will promote it to get their fees. That will keep their customer accounts churning and everyone is happy. How many people do you think that are on here that would spent $150 on a indicator that can get them to break even or even become profitable? A lot I bet.

It is a better deal and less stressful!

 

[ronblack]

The least serious looking Guru whose website looked the most like a scam ended up being the best. He had a method that I hated and refused to use, until 3 years of losing money changed my mind :eek:

Any hints? (You may send a pm)

 

[Wide Tailz]

"wizard training course"