Realistic weekly or monthly returns of a top pro trader

Flipside, you are the only one who has addressed the question straight on. I specifically posted that there are numerous other threads where a beginner asks a vague question and others answer it with vague thoughts. Please dont answer if you dont have a stright shooter answer like flipside.

Actually the details i gave is not really necessary to answer the question of "what percentage a good prod trader makes". I seached the web and could not find anything other than hedge fund returns. The theoretical account size or postion at risk and leverage etc. are just to elicit answers from those who started with a similar account size.

I have heard of marty schwartz, and if i remember correctly, he made most of that 25% yearly return during the bull years of 90s. Impressive return, when u consider Berkshire Hathaway A shares have delivered an annualized total return of 25% since 1976. But i beleive small traders with under a million in assets can outperform this level of achievement and that was the motivation of my curiosity.

Maybe someone who has been around this forum a long time can answer this question, because that person would have seen some top traders who hang out in elite trader discuss their performance.

FYI - top hedge funds produced more than 25% last year, even though they had to manage billions in assets.

PS: Beginners (or those who think they are answering a beginner) need not post a reply to this thread.
 
Quote from seekingbuddha:



PS: Beginners (or those who think they are answering a beginner) need not post a reply to this thread.
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Sorry. No post history means you are a noob here.

I've done 96% with 6.8% drawdown this year (3.5 months), with matching funds on a month end close to close basis.

This much is certain: If that's good enough to be second in this years World Cup Championship, that is the creme de le creme of as much as you can ever possibly expect to make as a professional top trader.

Now, I trade futures for those returns, but my equities trading is impossible to make that kind of return. The difference is between 3:1 and 5 to 8:1. You can't expect to make as much trading ETF's as you can in futures. Never mind the public record isn't profitable, because it will be, but when it comes to futures, that's as awesome as it'll ever get for anybody.

Even though the World Cup Trading Championships are for forex and futures trading, you can't ever expect to make much more than that unless you have a very solid plan, models with multi-thousand percent returns, and backtested drawdowns less than 35%.
 
It depends on the size of your account and whose money it is. If you're trading a 5 - 10k account 100% per month in the futures market is doable. If you're trading 5M then not a chance.

If you're trading OPM then 20 - 50% is a very respectable return.

If you're trading prop (with the right firm) you really have no idea how much your account size is. You generally have position limits that increase with your experience and productivity but you tend not to think about it in terms of money so if you're allowed a 20 lot line you don't think much about putting a 10 lot position on the market because you're 1/2 of your lot size, not 1/2 of your account size. On a psychological level this is a monumental difference so you can generate some serious profits in the world of prop.

If you trade with a firm that requires a deposit then you go back to trading $'s, not lots and you lose that psychological edge.
 
Quote from bwolinsky:

Sorry. No post history means you are a noob here.

I've done 96% with 6.8% drawdown this year (3.5 months), with matching funds on a month end close to close basis.

This much is certain: If that's good enough to be second in this years World Cup Championship, that is the creme de le creme of as much as you can ever possibly expect to make as a professional top trader.

Now, I trade futures for those returns, but my equities trading is impossible to make that kind of return. The difference is between 3:1 and 5 to 8:1. You can't expect to make as much trading ETF's as you can in futures. Never mind the public record isn't profitable, because it will be, but when it comes to futures, that's as awesome as it'll ever get for anybody.

Even though the World Cup Trading Championships are for forex and futures trading, you can't ever expect to make much more than that unless you have a very solid plan, models with multi-thousand percent returns, and backtested drawdowns less than 35%.
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Bwolinsky - thanks for the reply. i searched on the net for trading competition returns, but could not find any. This post implies that you came in second in a world championship ? You have awesome returns, and the other top level competitions i have seen produced winners with 100% or more for 3 months. I am wondering about an average monthly return for atleast 2 or 3 year period because 3 months is too short a timeframe to make judgements.

I made a mistake in the earlier post comparing Schwartz to Buffet, because i didnt realize that 25% was per month (thought that was per year).
 
Quote from seekingbuddha:

I made a mistake in the earlier post comparing Schwartz to Buffet, because i didnt realize that 25% was per month (thought that was per year). [/B]
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Schwartz can make 25%/month, but only on a limited capital base.
Buffet was making 25%/year for decades, but accomplished that by levering it up by billions through insurance float.

I would rather earn a smaller % return on billions than a very high % return on thousands, but most people's choices are limited to choosing to trying to accomplish the later. Can't help it if one does not have the right pedigree, such as having Goldman Sachs credentials. The "Ghetto Trader" (to quote emg) must pull himself up by his bootstraps, but I have no doubt that the tiny % that can break through can probably out trade many hedge fund traders who all look good on paper, but they don't have the ability to generate the all-elusive alpha on a sustained basis.
 
Quote from seekingbuddha:

I am sure this topic has been discussed in one of the forums here before,
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It depends on how you diversify risk. You can postpone it in time, for example by selling options or doing martingale trading. That way some have made, even relatively new to trading, around 20% per month only to blow it all up in one or two very short trades. The characteristics of the market aren't just price, you can trade volatility, time decay, correlations, all sorts of things. Some of these will work for a long time and then just crash (ie correlations/hedging) and some will have minor crashes all along (price direction). There's no straight answer to your question because many of the "top" traders probably had luck on their side, however, nobody can quantify what was luck and what was skill. Even those that are consistent for years, statistically there's a good chance they are still lucky (ie 1 in 100k but it happens).

PS - my first question on ET was very similar to yours. I came along thinking that whatever the top dogs are making, i can make, since thus far in life i was successful in almost everything and top of my rank blabla. Trading will make you humble real quick, and it will take effort to reach anything close to a comfortable pro level. Your quantitative finance, math, physics, economics or whatever other knowledge you're proud of, won't help without experience. It's much like a sport, trust me.
 
Quote from seekingbuddha:

Bwolinsky - thanks for the reply. i searched on the net for trading competition returns, but could not find any. This post implies that you came in second in a world championship ?
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The World Cup Trading Championship results are here:

http://www.worldcupadvisor.com/worldcupchampionships/default_nwcc2.aspx

Beau does not appear in the list.

Beau's Coverstor account is down 14% since inception (~1yr) and down 10% in the last 30 days.
 
Quote from bwolinsky:

This much is certain: If that's good enough to be second in this years World Cup Championship, that is the creme de le creme of as much as you can ever possibly expect to make as a professional top trader.

Even though the World Cup Trading Championships are for forex and futures trading, you can't ever expect to make much more than that unless you have a very solid plan, models with multi-thousand percent returns, and backtested drawdowns less than 35%.
More...

Well, I highly respect the Robbins family = WCA team and consider them all very good friends. That said, the WCA itself is far from an ultimate measure of the top echelon traders in our profession.

Kudos to everyone in that contest regardless of standing, but only once in its history has the winner there ever been nearly creme de of the individual trader's world. That would have been Larry Williams for one year in 1987 alone.

P.S. - If they offered $500 or even $1,000 per contract daytrade margin as part of the WCA parameters, the annual winner would probably break +1,000% or more consistently.
 
Quote from austinp:

Well, I highly respect the Robbins family = WCA team and consider them all very good friends. That said, the WCA itself is far from an ultimate measure of the top echelon traders in our profession.

Kudos to everyone in that contest regardless of standing, but only once in its history has the winner there ever been nearly creme de of the individual trader's world. That would have been Larry Williams for one year in 1987 alone.

P.S. - If they offered $500 or even $1,000 per contract daytrade margin as part of the WCA parameters, the annual winner would probably break +1,000% or more consistently.
More...


Larry Williams performed like a winner among the winners with over 11,000 % return while most winners averaged around 300% in the futures category.


So, do you mean to say that there is no margin given in the futures account in the competition (which is usually the case for typical futures trader in real life; many highly lever a futures account).
 
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