Lucias, just open an account with Covestor. Gmst, you might want to do that as well.
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The Perfect Prop Firm
- Thread starter Maverick74
- Start date
If I take this literally "thousands" means at least 2000% and "a years" implies some consistency. Is there reality to this Mav, Don and any others that care to chime in?
How many guys trading prop really do 2000% or better on their own cash? Is it a handful of guys in the entire industry or is it way more than that making me quite naive as to the reality out there?
How many guys trading prop really do 2000% or better on their own cash? Is it a handful of guys in the entire industry or is it way more than that making me quite naive as to the reality out there?
Quote from PARACLESE:
Good prop traders can make thousands of percents in a year.
Quote from Swan Noir:
If I take this literally "thousands" means at least 2000% and "a years" implies some consistency. Is there reality to this Mav, Don and any others that care to chime in?
How many guys trading prop really do 2000% or better on their own cash? Is it a handful of guys in the entire industry or is it way more than that making me quite naive as to the reality out there?
You can't really look at return on cash, no prop trader really does. You have to look at return on risk or return on buying power. For example, we'll use Bright Trading as an example. If you put up 20k with Bright and Don gives you 300k in buying power (hedged), you can probably make 50% to 100% on that buying power. That's 300k in profits on a 20k account. That's 1500% return on cash but nobody measures it that way. They look at your return on buying power. In general, I think an average competent trader (not rockstar) can make 20% on their buying power. So in this example, that would be 60k return on a 20k account or 300%. That's only averaging $240 a day in profits on 300k in buying power. That is not terribly hard to do.
I already have an account at C2.. I already have 2 of the top ranked futures systems. Not sure what covestor would add... anybody who wants can go and see my capability and where they compare to me.
If Don B or anyone else wants to subscribe they can already do that.
If Don B or anyone else wants to subscribe they can already do that.
Quote from Maverick74:
Lucias, just open an account with Covestor. Gmst, you might want to do that as well.
Ultimately every trader has to use return on cash as "a" benchmark even if not "the" benchmark. The 300% on cash does not surprise me nor would 600% but it is fair to say that 2000% is another league entirely.
The math in your example assumes a 100% return on buying power yet you say an average competent trader does 20% on buying power ... again a whole other league. I'm not suggesting that there are not traders that do 2000% on their cash, I'm just trying to get a read from guys that know that world inside out that if a "good" trader (his word not mine) typically puts up those kind of numbers.
And, if they do does a great prop trader do 4000% and do the legendary prop guys do 8000%? I am not suggesting I know that world -- I do not -- and that is why I turned to you, Don and anyone else who knows.
The math in your example assumes a 100% return on buying power yet you say an average competent trader does 20% on buying power ... again a whole other league. I'm not suggesting that there are not traders that do 2000% on their cash, I'm just trying to get a read from guys that know that world inside out that if a "good" trader (his word not mine) typically puts up those kind of numbers.
And, if they do does a great prop trader do 4000% and do the legendary prop guys do 8000%? I am not suggesting I know that world -- I do not -- and that is why I turned to you, Don and anyone else who knows.
Quote from Maverick74:
You can't really look at return on cash, no prop trader really does. You have to look at return on risk or return on buying power. For example, we'll use Bright Trading as an example. If you put up 20k with Bright and Don gives you 300k in buying power (hedged), you can probably make 50% to 100% on that buying power. That's 300k in profits on a 20k account. That's 1500% return on cash but nobody measures it that way. They look at your return on buying power. In general, I think an average competent trader (not rockstar) can make 20% on their buying power. So in this example, that would be 60k return on a 20k account or 300%. That's only averaging $240 a day in profits on 300k in buying power. That is not terribly hard to do.
Mike B. says he puts up thousands of percents per month.. lol
The problem is not buying power anyway. The problem is most don't have risk/adjusted return to produce such strong returns. I use myself a max of 4x leverage and could see going up to 6x.
How these prop firms get around it? They either have much higher sharpe then me.. but there is another factor which is the # of trades made.. More trades allows for faster compounding.. a subtle but important effect.
For example on 300k buying power, a 25k is only a 12% drawdown!! How many people can do 100% with less then a 12% drawdown.. you can't unless you're trading higher frequency.
The problem is not buying power anyway. The problem is most don't have risk/adjusted return to produce such strong returns. I use myself a max of 4x leverage and could see going up to 6x.
How these prop firms get around it? They either have much higher sharpe then me.. but there is another factor which is the # of trades made.. More trades allows for faster compounding.. a subtle but important effect.
For example on 300k buying power, a 25k is only a 12% drawdown!! How many people can do 100% with less then a 12% drawdown.. you can't unless you're trading higher frequency.
Quote from Swan Noir:
Ultimately every trader has to use return on cash as "a" benchmark even if not "the" benchmark. The 300% on cash does not surprise me nor would 600% but it is fair to say that 2000% is another league entirely.
The math in your example assumes a 100% return on buying power yet you say an average competent trader does 20% on buying power ... again a whole other league. I'm not suggesting that there are not traders that do 2000% on their cash, I'm just trying to get a read from guys that know that world inside out that if a "good" trader (his word not mine) typically puts up those kind of numbers.
And, if they do does a great prop trader do 4000% and do the legendary prop guys do 8000%? I am not suggesting I know that world -- I do not -- and that is why I turned to you and Don.
Quote from Swan Noir:
Ultimately every trader has to use return on cash as "a" benchmark even if not "the" benchmark. The 300% on cash does not surprise me nor would 600% but it is fair to say that 2000% is another league entirely.
The math in your example assumes a 100% return on buying power yet you say an average competent trader does 20% on buying power ... again a whole other league. I'm not suggesting that there are not traders that do 2000% on their cash, I'm just trying to get a read from guys that know that world inside out that if a "good" trader (his word not mine) typically puts up those kind of numbers.
And, if they do does a great prop trader do 4000% and do the legendary prop guys do 8000%? I am not suggesting I know that world -- I do not -- and that is why I turned to you and Don.
I think 20% return on buying power is where the meat of the distribution is. The top 5% make 100% return on buying power. Guys who don't make money at all fall out of the sample pool as they will run out of cash pretty fast. So we are measuring the winners here, keep that in mind.
Percent return as mav points out means nothing but percent return on buying means nothing either.
What means something.. the 2 figures that determine everything are
1. Max daily loss limit
2. CALMAR or Return/MAX DD
If you go to a shop that offers capital the #1 should be first question and you want to know your max loss before getting cut. As I note in another post, the buying power isn't that important because with futures you can get more then enough leverage anyway...
The only way a guy is making 300k on a 20k without busting if he's doing a very higher frequency trading.. which allows him to compound multiple times intra-year. This is the only way thats going to happen.
What means something.. the 2 figures that determine everything are
1. Max daily loss limit
2. CALMAR or Return/MAX DD
If you go to a shop that offers capital the #1 should be first question and you want to know your max loss before getting cut. As I note in another post, the buying power isn't that important because with futures you can get more then enough leverage anyway...
The only way a guy is making 300k on a 20k without busting if he's doing a very higher frequency trading.. which allows him to compound multiple times intra-year. This is the only way thats going to happen.