What are typical annual returns?

Ok, glad to hear the feedback.

In my mind I always wondered since we're all working with smaller positions (and thus able to get in/out quickly)... whether the real studs amongst us should be able to actually *out-perform* the super-duper hedge funds, and therefore gross something in the 40%-50% range.

It's comforting to know that the bar isn't quite that high. :)
 
Quote from heech:

Hi,

I'm curious what "typical" annual returns career traders are seeing.

I'm really looking for feedback from seasoned folks who've been through a few business cycles. If you've only been trading for 12 months but managed to gain 200% over that time frame... this question isn't for you.

I know, for example, that if a larger managed fund returned more than 12%-15% yoy with low volatility, to be suspicious (see Madoff). I know some of the super-duper hedge funds can return 30%-40% annualized.

But they're a different beast from the rest of us. What about smaller traders with $100k-$2 million portfolios? How well are you doing on an annual basis?
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I would guess 40-100% per year for successful, long-term daytraders during a 'normal' year, and perhaps 100-300% during exceptional years such as 2007 or 2008.

As the account balances grow much larger than the size you mentioned, these percentage returns become very difficult without taking excessive risks (which is why hedge funds cannot typically achieve these kinds of returns).
 
Quote from theDudeAbides:

What are the assumptions regarding use of leverage, if any, for the returns listed above? Thanks.
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I personally assume that it's assuming max "acceptable" leverage. Meaning, you can over-lever for short-term returns, but you'll eventually blow yourself up.

If you manage to not blow yourself up, then you're using acceptable leverage.
 
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