Small time Daytraders - what is a good return?

[central park]

good points, wutang.

the worst thing about daytrading business are the skills are not transferable to anything else. market changes, lose your edge, and you lose your livelihood.

good return is not losing everything.


CPW

 

[stock777]

Quote from central park:

good points, wutang.

the worst thing about daytrading business are the skills are not transferable to anything else. market changes, lose your edge, and you lose your livelihood.

good return is not losing everything.


CPW

whaddya mean not transferable.

petty thief is good in many venues.

 

[ehorn]

Quote from ninety:

How do you define a "good" ROI in Day Trading. I know there are numerous definitions of ROI in books, magazines, ,webinars etc . But for small time traders, what is your expectation and actual experience?

Hi ninety,

IMHO, It makes sense to look at what the market offers. This can be measured by the range (i.e. daily ATR) of the instrument being traded. The trader should continually focus on improving his/her skill, experience, and knowledge while using the baseline of the daily range. As these improve, so too should the ROI relative to what the market offers each day.

 

[jonbig04]

Quote from central park:

good points, wutang.

the worst thing about daytrading business are the skills are not transferable to anything else. market changes, lose your edge, and you lose your livelihood.

good return is not losing everything.


CPW

I disagree. Poker in an honest trade.

 

[JORGE]

Quote from wutangfinancial:

basically, daytrading is a stupid business. Capital doesn't scale. You have huge variance in your expected earnings. You face gambler's ruin. Unlike most businesses, the longer you're profitable, your business isn't any financially stronger. You're just as likely to blow out.

As stated, I'd rather offer a 10%/year absolute return strategy, manage a cool billion with a 2-20 fee structure and sleep at night. I'd take my annual earnings and invest in real estate and other assets with no correlation or exposure to my strategy. If you take basic finance, you learn to create a balanced portfolio, that is to underweight the industry you already work in. When you daytrade, you concentrate your wealth entirely into your profession, by definition; it's like holding all your wealth in company stock.

Let's pretend you somehow round up a cool Billion, why is your business any stronger than an experienced trader managing his own funds. The fact that you are being held accountable by accredited investors who will pull their funds the moment you have a bad month doesn't exactly help one sleep well at night.

It might be hard to believe, but you can actually make a good living daytrading, go home in cash every night, and sleep just fine.

To the OP, it's possible to make 1% a day on a 4-1 retail account (sweeping profits, not compounding). It obviously becomes increasingly difficult to hit this target on large accounts, but on a sub 250k acct it is definitely attainable for an experienced trader.

 

[stock777]

So how many traders do you know that consistently make 200% a year (1% a day).

I know 2,454, maybe you know a few more.


By the way 'attainable ' is considered a weasel word and banned in most civilized countries.

 

[magicdust]

There are day traders who make returns in % terms that would be considered unbelievable to most on this site (I'm not one of them). But they are there, and they are tight-lipped.

 

[Mike21]

Quote from NY0BScalper:

A good daytrader can consistentl...t in front of institutional orders." ~Mike

 

[Eddiefl]

Quote from central park:

good points, wutang.

the worst thing about daytrading business are the skills are not transferable to anything else. market changes, lose your edge, and you lose your livelihood.

good return is not losing everything.


CPW

central park,

Are you telling me, discipline, being methodical, consistency and self-control do not translate other business??....


EF

 

[ProfitTakgFool]

Don't agree with you on the first part if you can manage to save cash. If you spend all your profits then yes, you are no better off because your risk of blowing up still remains. If you can shield yourself from that risk then yes, you are better off. You should have an amount equal to that of your trading account in the bank or in some liquid asset such as bonds. Over time increase your asset positions, relative to your trading account. It's all about managing risk.

Completely agree with you on your second point but you can use what I mentioned above to accomplish this goal even if you don't manage funds for a living. IMO....day trading is a respectable and admirable position because so very few can do it but I'm obviously biased.

Quote from wutangfinancial:

basically, daytrading is a stupid business. Capital doesn't scale. You have huge variance in your expected earnings. You face gambler's ruin. Unlike most businesses, the longer you're profitable, your business isn't any financially stronger. You're just as likely to blow out.

As stated, I'd rather offer a 10%/year absolute return strategy, manage a cool billion with a 2-20 fee structure and sleep at night. I'd take my annual earnings and invest in real estate and other assets with no correlation or exposure to my strategy. If you take basic finance, you learn to create a balanced portfolio, that is to underweight the industry you already work in. When you daytrade, you concentrate your wealth entirely into your profession, by definition; it's like holding all your wealth in company stock.