So let's assume that a trader has indeed

[Lucas_Paul]

My profile is very conservative. I look for 8% to 12% per year with very low drawdowns for the bulk of my investing. I also look for non-correlated returns to the market. It is very easy to have a great run for long manager during an up market. That does not impress me. I can do that and do not need to pay 2/20 for that.

THAT sentence, ladies and gentelmen, pretty much concludes everything:

1) high Sharpe
2) non correlated to market
3) total return beating SP500 earnings yield+nominal growth on average long term

that's exactly what investors want from you. You can just call it Alpha. If you don't have alpha, there's no reason to pay you commissions. Everyone can buy&hold an index.

 

[SelfMadeDude]

But it was a wonderful way to run numbers of scaling, I learned a great deal, even some weeks taxed my brain on how to be creative on putting hedges on large positions.

Great life experience.

Can you expand on "putting hedges on large positions?"

You mentioned a 2,000 ES position earlier in your post. How and why would you need to hedge that? This is a completely new concept to me. I'm still at the level where I'm just looking for ta setups/probability and buying/selling.

Thank you.

 

[trend2009]

View attachment 289496

2.5m return， performance fee is 500k.

 

[virtusa]

$25mm with 2/20 and a 10% return is about $3mm/year before expense.

Your calculation was confusing.

AUM is 25MM
Fees are 2/20
Return (of the AUM in the FUND) is 10% (so not the fee of 20% that is mentioned above)

If AUM has a return of 10% the profits are 2.5 MM
Management fees are 2% on 25MM and incentive fees are 20% on 2.5MM
So total is 1MM.

Logically, return is the performance of the fund.
If you mention the fees logically people think the 10% is the return/profit on which the incentive fee (20%) is calculated. But you don't use the 20% incentive fee in your calculation.
There is a misunderstanding between Robert and the rest.
If the incentive fee is 10% why then mention 2/20. That made it confusing.

 

[virtusa]

I read your thread:
My attempt to earn a funded account with TopStep

I must say that I am not optimistic about your future performance. I even wonder if you are not just joking.
You just showed some trades and these results are to me at least far from spectacular.

Your website www.selfmadedude.com is for sale????

 

[Scataphagos]

THAT sentence, ladies and gentelmen, pretty much concludes everything:

1) high Sharpe
2) non correlated to market
3) total return beating SP500 earnings yield+nominal growth on average long term

that's exactly what investors want from you. You can just call it Alpha. If you don't have alpha, there's no reason to pay you commissions. Everyone can buy&hold an index.

If you could guarantee investors 10%/year, you couldn't handle all the money that would come pouring in!

 

[SelfMadeDude]

I read your thread:
My attempt to earn a funded account with TopStep

I must say that I am not optimistic about your future performance. I even wonder if you are not just joking.
You just showed some trades and these results are to me at least far from spectacular.

Your website www.selfmadedude.com is for sale????

Agreed. My past performance (including the stats not shared) have been sketchy. Pulled decent amount of profit from funder firms but I have to chalk that up to you luck versus skill since I gave the 5-figures back to the market within weeks. It is what it is.

I aim to show some much improved trading stats within the next few weeks. I'm in that last stage of the "pre-consistent trader" phase and am working hard to improve daily.

Thanks for your honest feedback.

 

[Robert Morse]

You are all correct on the performance fee, my bad. Sorry about that.

 

[Concinnity]

You guys either don't understand or haven't seen the gap between what most people do on here and actual pure day traders. Until you get to a certain point in day trading or unless you have substantial income coming from outside sources like another business than 20% a year as a day trader literally means you starve.

Even with 200k 20% would only be 40,000.00 income and you haven't even factored in data fee's, taxes and etc(even if you write off some things like data fee's or etc it's still not going to be a pure 40k). Don't have to believe me just saying it's a joke the way you guys talk about day trading. The fact is most people here, even the successful ones who everyone looks up to, can't day trade nearly as good as you think they can. A lot of them had large sums of money prior to entering the game or another business with good cash flow.

That's not to say what they are doing isn't smart, that I wouldn't do things exactly the way they are, or that there aren't a few exceptions on here. It's simply to say they aren't as talented and don't have the raw day trading capability that they would like you to believe they have.

 

[SunTrader]

I see his edge as mainly a time edge with some luck mixed in. But that's just me. But yeah I'll just give him 100k let him invest it, than in 30 years I'll make sure to enjoy spending it from my grave.

The biggest "edge" he has had is Geico and the rest of the insurance businesses Berkshire Hathaway own that spit out unending revenues to bankroll it all.

Meanwhile Buffett's time edge is close to expiration.