Quote from luke24.5:
You're misunderstanding alright. But math isn't your problem. Ignorance of the human psyche and its role in trading success is your mnor problem. No one is going to increase his lot size daily for 100 days from 1 to 100 lots.
CMON luke (et al.) - you're *still* dodging a very pertinent question conc. the issue of returns when trading one of the very liquid futures instruments available today to participants dealing from a professional perspective: i.e. why is it that there are no stories about funds out there managing [ < 8 figures to insure the discussion from stranding on liquidity] that doesn't consistently makes at least more than say 500 % annually? - a rather conservative whim really, as illustrated earlier in this thread by the 1 pt. a day example. Again, pre-empting another dodge attempt, as I plan to argue below surely someone approaching this with the right set and setting (psychological and financial wise) should be able to do so.
Assuming that the various practices one hear preached, if just in general terms, in "serious" trading periodicals, literature, sites etc. have *any* merit - for this discussion the measure here would simply put be the ability by *these authors* (i.e. I demand nothing from their disciples) of making consistent profits by trading es futures - then the traders should indeed be able to make annual profits equaling or exceeding the before mentioned 500 % annually.
Now, there is of-course a good deal of examples of individuals who has made > 1,000 % annual compounded profits for 2 or 3 years. But it then seems invariably that those skilled individuals, that after this initial extreme run that has provided them with a fortune (be it 1, 10 or 1000 million USD), stops rather abruptly with adding to their net-worth in that fashion, and suddently "settles" with an expansion in the range of SP500 +/- 20 % or so.
This is of-course all very fine, and we'd of-course all dream of such results. Common wisdom would also tell us that they're indeed content, and from a typical psychological viewpoint it would suggest that they at least finacially have found a sound balance in their life.
But going back to the aforementioned type of media, in particular the genre dealing with psychology, if one were to apply the basic concepts challenging all traders as outlined in books ranging from Douglas' "Trading in the Zone", Hill's "Think & Grow Rich" to NLP stuff, any fair interpretation would actually dictate that these individuals are now severely hampered by fear, or an inverted type of greed. Assuming of-course that they consciously choose to continue their trading and benefit as much as possible from this activity.
...Ok, let's simplify things now to round up - an individual having amassed a fortune of e.g. 10 m. USD, could as an annual starting point for example allocate 2 millions to continue his index futures trading activity, shuffling the remaining 8 million in fixed income products relying on the security of the fed's obligations. If he could still meet the by all means justifiable criteria we started out with, managing these 2 millions with a leverage as this was his starting point and making those minimum 500 %, he would end up with a 100 % annual profit discounting all interests he'd have made on the money mkt that year.
But again, this is not the case for the little elite group having made serious fortunes on their trading activities. To repeat, it seems they make that short explosive run over a few years and then "settle" for a steady progression from there on. Or in some cases, having an occasional extreme swing every 7 years or so in either direction. But not the consistent progression year out, year in, as advocated by the gurus.
Well this became long, but it still leaves the original question deserving the merit that a lot here apparently doesn't recognize.
ac
