Professional profits

[Buy1Sell2]

20 to 25% is very reasonable using 1 to 1 leverage and just weekly charts in fx futures. Selling option premium helps get the return into that range.

 

[risktaker]

Show some statements to back up this claim. Point to a reputable firm that made that in the last 1-2-3 years. We're waiting.

Quote from Buy1Sell2:

20 to 25% is very reasonable using 1 to 1 leverage and just weekly charts in fx futures. Selling option premium helps get the return into that range.

 

[Buy1Sell2]

Quote from risktaker:

Show some statements to back up this claim. Point to a reputable firm that made that in the last 1-2-3 years. We're waiting.

On a conservative 20% to 25% annual return ??? I could understand if I made a 200% claim using weekly charts, but 20% -25%??? Those returns are extemely reasonable. FX futures(majors) have one or two huge trending moves on weeklies every year!

 

[FXPimp]

Quote from Buy1Sell2:

On a conservative 20% to 25% annual return ??? I could understand if I made a 200% claim using weekly charts, but 20% -25%??? Those returns are extemely reasonable. FX futures(majors) have one or two huge trending moves on weeklies every year!

20-25% is not unreasonable for a professional trader. Managed funds are never going to consistently return those kind of profits because its not their gameplan to. A few percent here and there on millions is their only strategy. As for my own experience, I used to make about 25-50% annually on leveraged money. Which equates to about 2.5%-5% unleveraged.

 

[OddTrader]

Quote from OddTrader:

"Life of Program Allocation Performance Comparison through 10/6/06 "
http://www.fx-forex-trading.com/sys_stats.htm

Highly profitable every year for every one of them! Unbelievable!

 

[misha7]

Quote from OddTrader:

"Forget about 25%. "
I think it would depend on the leverage you use, within acceptable MaxDD.

Q

The Parker FX Index is a performance-based benchmark that measures both the reported and the risk adjusted returns of global currency managers. It is the first Index to analyze unleveraged (risk adjusted) performance in order to calculate pure currency alpha, or manager skill.

UQ

well in the long-run leverage should be irrelevant in a sense that expected return cannot be increased by increasing leverage..

 

[misha7]

Quote from OddTrader:

Highly profitable every year for every one of them! Unbelievable!

right..

 

[OddTrader]

Quote from misha7:

well in the long-run leverage should be irrelevant in a sense that expected return cannot be increased by increasing leverage..

imo, certainly not irrelevant, particularly when compounding is applied for a profitable trader/ manger year after year, as we can see the public records specifying used leverages of so many hedge funds and CTAs.

 

[FXPimp]

Quote from misha7:

well in the long-run leverage should be irrelevant in a sense that expected return cannot be increased by increasing leverage..

Incorrect. Every day and every month are not the same. If a fund manager normally trades approximately X size, there will be occasions where volatility and potentially profitability may dramatically increase to the point where the manager may trade 2X size. Instead of using more "real" capital, simply increasing leverage allows the manager to exponentially improve profits when the opportunity presents itself.

Simply put, the best traders commonly change their "bet" size based on market conditions.

 

[misha7]

Quote from FXPimp:

Incorrect. Every day and every month are not the same. If a fund manager normally trades approximately X size, there will be occasions where volatility and potentially profitability may dramatically increase to the point where the manager may trade 2X size. Instead of using more "real" capital, simply increasing leverage allows the manager to exponentially improve profits when the opportunity presents itself.

Simply put, the best traders commonly change their "bet" size based on market conditions.

note that I said "in the long run" (Modigliani-Miller world if you want), which does not mean that you cannot have a profitable strategy utilizing leverage.
Look, retail traders get 200x1 leverage and you know their "profitability". Obviously professionals (whatever that means) use leverage, but it's wrong to say that you can make XXX instead of XX if you use leverage. Of course you CAN but you can as well lose as much.
Anyhow, if you believe this then I recomment finding an FX strategy that yields 0.001% and leverage it up to the wazoo..