Professional profits

[OddTrader]

Quote from misha7:

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..

I believe most professional/ experienced FX traders would only apply adequate leveregae to a system that has been proved with very robust, reliable and consistent performance. Just my 2 cents.

 

[illiquid]

Quote from OddTrader:

I believe most professional/ experienced FX traders would only apply adequate leveregae to a system that has been proved with very robust, reliable and consistent performance. Just my 2 cents.

The question is, do funds generally raise leverage as opportunities decrease or increase? Do they play safer when a good performance can be locked, or go for the home run? Or do they do the opposite and get more desperate as opportunities shrink and they try to maintain past performance?

 

[OddTrader]

Quote from illiquid:

The question is, do funds generally raise leverage as opportunities decrease or increase? Do they play safer when a good performance can be locked, or go for the home run? Or do they do the opposite and get more desperate as opportunities shrink and they try to maintain past performance?

I think they should strcitly follow their original plans except certain well-tested improvements, otherwise who knows what will happen to them?

 

[OddTrader]

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.

Do you believe that some traders would mix up practical reality with visual delution?

 

[ADX_trader]

Quote from FXPimp:

So, this basically means that on a 10:1 leverage, and a 1.5% return in a month = a 15% return on the real equity value.

Is 15% the norm for Pro FX traders? It is not very impressive.

 

[FXPimp]

Quote from ADX_trader:

Is 15% the norm for Pro FX traders? It is not very impressive.

You are a tough customer. 15% return/month is very, very good in the managed world. Remember, that on a 100:1 account that is 150% return/month. Fund managers dont go for the home run anyway, they just plug away. And truthfully, no funds want to show a huge number in a month like 50%. It gives potential customers the wrong idea and too high expectations. Generally speaking, a fund that has a track record of a few % a month are going to make investors more comfortable than one that has a potentially eratic pattern with a few huge months. Clients like stable and steady. Throughout this thread, I have been referring to "funds" or managed accounts, and not individual, professional fx traders.

 

[Jackjones]

And when comparing returns you should always factor the risk needed to get them. 100% for 100% or 2% for 1% ??