What do you consider a good yearly return? (In percent)
- Thread starter trade5656
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5% more than S&P Index and at least $10 bucks more than last year.
Always a debate on whether it is the rabbit(working at making most money) or the tortoise( concentrating on risk management of low DD). I stopped working at making most profits several years ago, and everything is geared to keeping losing % low and Drawdown very low. All I can somewhat control is risk and as far as profits, it is more being able to accept what market allows me to get.
Most of problems for me early on was greatest profits usually increased risk great deal and drawdowns of 50% to make 50 plus % profits, problems happen like you first lose 50%, you now have to do 100% to get close to breakeven on the year. Whereas if I risk 1% or lower and try to concentrate on 10% or lower losing percentages and averaging 2-4% returns on majority of monthly term targets, I won't get into situations of having to double account to do breakeven. You end up spending huge time studying risk management and hedging. And getting losing % low does not mean you nailing 90% winners and hedging does cost funds but at least gives you an idea how to keep risk tighter.
Always a debate on whether it is the rabbit(working at making most money) or the tortoise( concentrating on risk management of low DD). I stopped working at making most profits several years ago, and everything is geared to keeping losing % low and Drawdown very low. All I can somewhat control is risk and as far as profits, it is more being able to accept what market allows me to get.
Most of problems for me early on was greatest profits usually increased risk great deal and drawdowns of 50% to make 50 plus % profits, problems happen like you first lose 50%, you now have to do 100% to get close to breakeven on the year. Whereas if I risk 1% or lower and try to concentrate on 10% or lower losing percentages and averaging 2-4% returns on majority of monthly term targets, I won't get into situations of having to double account to do breakeven. You end up spending huge time studying risk management and hedging. And getting losing % low does not mean you nailing 90% winners and hedging does cost funds but at least gives you an idea how to keep risk tighter.
L
lovethetrade
Couldn't agree more with this. Why on earth would you dedicate 10 years of your life if you were only going to earn 5-10% return and your logic could expire at any time as many have suggested.
I can appreciate its different for large funds because it's more about asset allocation but futures traders should be earning 20-30% minimum.
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I'm actually surprised by the comments. Thought it would be much higher. In my IRAs, I re balance every 2 weeks (always in). I consider it pretty conservative. No leveraging. So, I'm not sure what category you would put it in. Personally, I see it as investing since I put very little thought into it except on rebalance days. Ten year average is above 30%. I'm pretty disappointed on the years it dips below that. Please note that my entire account is not in this strategy. So avg of my entire IRA is not quite that high. Tomorrow is a rebalance day, so I'll check.
I was averaging around 16%pa on trading around $800k in stocks but was doing this while working as a wage slave in a very busy full time job. (I'm talking sales with 60 to 100 work related emails per day)
Now retired from work, I'm hoping to improve on the % return, but my trading capital is also bigger.
As Handle said a couple posts back, manage the risk as a priority, as account size grows, risk managment becomes more important.
I believe the correct mindset for trading is not "how much can I make" but rather "how much can I retain of my capital when engaged"
I think I can possibly make 25%pa as now way more organized, last few months have made great strides regarding being focused.
Now retired from work, I'm hoping to improve on the % return, but my trading capital is also bigger.
As Handle said a couple posts back, manage the risk as a priority, as account size grows, risk managment becomes more important.
I believe the correct mindset for trading is not "how much can I make" but rather "how much can I retain of my capital when engaged"
I think I can possibly make 25%pa as now way more organized, last few months have made great strides regarding being focused.
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How can one say what's good or not? Your return will be commensurate with your ability, effort and approach.
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It depends on market and leverage. For stocks with no leverage 7% - 12%. For forex 10% - 30% with 5x leverage.
This is a good thread as it may put some expectations in-line with reality. Personally, I'd consider anything above 20% per anno (non-compounded average, not Warren Buffet-like returns) as good returns. But this is more of a goalpost at this stage since positive yearly returns are still hypothetical in my case (but maybe not too far off this summer). In the beginning I think 6.18% over time shows you're clearly above break-even, and should be confirmation enough that you're onto something (but nothing to quit your dayjob for). However, this process is and should be non-linear, so personally I'd never settle for sub 10% but strive for better returns.
Of course, some funds may have better returns, but it's more about luck, how much money you have in them, when they start underperforming and whatnot. If not willing to spend years to learn trading, better to just buy the index and some funds managed by professionals. Why to learn trading shouldn't just be about the money, as that is putting the focus in the entirely wrong direction. Maybe for Gekko and mythical natural cunts it works, but not for everyone else. It should ofc also be about the hookers and blow!
Of course, some funds may have better returns, but it's more about luck, how much money you have in them, when they start underperforming and whatnot. If not willing to spend years to learn trading, better to just buy the index and some funds managed by professionals. Why to learn trading shouldn't just be about the money, as that is putting the focus in the entirely wrong direction. Maybe for Gekko and mythical natural cunts it works, but not for everyone else. It should ofc also be about the hookers and blow!
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Small leverage, small risk, conservative? What capital is at stake? Making 10% is ok if you're investor with 7 figure capital. For a trader with $10k 10% would be $1000. Would you be happy making $1000 return on $10k?
If not happy, then maybe losing everything due to overtrading.