What realistic annual % return you expect?

[efficiency]

Quote from failed_trad3r:

20% compounded return for 100 years means you will own the entire stock market.

Think about that for a second.

The stock market grows less than 20% a year.

FAILED trader? Probably appropriate.

First and foremost, there won't be ANYONE trading for 100 years. Eh......maybe a few after 60 years.

Blackstar Funds did a study of the Russell 3000, spanning 1983-2006. Results included 64% under-performing the index over the LIFE of the respective stock. Conversely, the remaining 36% out-performed to varying degrees, but only 6.1% dramatically out-performed.

That 6% is what I'm after and won't get it daytrading or NOT letting your profits ride, which commonsense dictates, takes time. Also involves manageable position size and levered only when needed. Also includes exiting and re-entry.

20%ish is attainable. Not easy, but attainable. Net net, 1.66% per month. Naturally there would be month to months variances and............losing months. How losses are dealt with separates the men from the boys.

Now that clown talking eightfold increases on his money is.........................Fill in the blank.

Lastly, the market, however that's defined, "grows less than 20% per year" is indeed correct. In fact. "grows" is a misnomer. For YOUR viewing pleasure, I've attached a table of annual returns (or lack of them) for many indices through last year.

 

[etile]

I don't aim for realistic returns, whatever that is. I aim to take as much money from the markets when I believe the opportunities present themselves. My opinion with grinding out a consistent nut from the markets in whatever timeframe is that it hampers the trader from really pressing his bets when he should. Speculating is a business in that you want to manage your risk, but I try not to fall into the false comforts of consistency.

When I'm right, I intend to press the shit out of my bets. Great success comes from being at the right place, at the right time, and squeezing the opportunity for all its worth. Not all opportunities are equal and its the ability to separate the wheat from the chaff that makes all the difference.

Let your winners ride and press them for all their worth. Time decay is the only certainty in life which makes execution the most important thing in speculating.

It would be great to have an edge that is consistent for 40 years, but like all businesses, nothing is forever. I'd rather make out like a bandit while the going is good then try and make a consistent nut.

 

[intradaybill]

Liquidity issues do not allow anyone to own the whole market. This is an empty argument..

 

[NoDoji]

Swing trading returns will likely be smaller than day trading returns because your size is smaller (relative to your account) to limit overnight risk, or if you swing trade larger size, you'll likely do some hedging to limit overnight risk and hedging costs money.

Day trading returns can be significantly higher than swing trading returns because intraday margin is normally twice that of overnight margin, and a day trader can put on many trades every day. If I swing trade a single futures contract to capture a piece of a 1-week price swing, my profit target may be $2000. A day trader trading a 5-min time frame experiences the equivalent of 70 "days" every day. You might see 10 or more tradable setups a day and with the ability to trade twice as much size, this can amount to a swing trade profit target every couple days.

Account size is a factor as well, which has already been addressed here. A smaller account will produce larger % returns, but you can't compound that % forever because you'll reach a point at which the size needed to do so moves the market or prevents entries and exits at a specific price.

All this is assuming you have a well-researched trading plan, and have mastered the ability to follow it. If you lack these basic qualifications, you can expect to lose money consistently or, at best, tread water.

 

[SkepticTrader]

Quote from efficiency:

FAILED trader? Probably appropriate.

First and foremost, there won't be ANYONE trading for 100 years. Eh......maybe a few after 60 years.

Blackstar Funds did a study of the Russell 3000, spanning 1983-2006. Results included 64% under-performing the index over the LIFE of the respective stock. Conversely, the remaining 36% out-performed to varying degrees, but only 6.1% dramatically out-performed.

That 6% is what I'm after and won't get it daytrading or NOT letting your profits ride, which commonsense dictates, takes time. Also involves manageable position size and levered only when needed. Also includes exiting and re-entry.

20%ish is attainable. Not easy, but attainable. Net net, 1.66% per month. Naturally there would be month to months variances and............losing months. How losses are dealt with separates the men from the boys.

Now that clown talking eightfold increases on his money is.........................Fill in the blank.

Lastly, the market, however that's defined, "grows less than 20% per year" is indeed correct. In fact. "grows" is a misnomer. For YOUR viewing pleasure, I've attached a table of annual returns (or lack of them) for many indices through last year.

efficiency, nice sane and realistic post, a rarity here. Letting your profits ride, indeed... And creating true trading wealth is a long term proposition and not an overnight event.

 

[cornix]

For relatively small, forex scalping account typically consider 10%+ a month to be OK.

For long term trades anything that beats 20% a year is OK.

For longest term: r/e and other "real sector" investments anything that beats inflation and brings something on top of that is OK.

 

[Fireplace]

I guess you went about things a different way that me. I focused on consistency first and built my trading from that premise.

Quote from pattern39:

What is unrealistic is expecting a realistic return. Some years, you'll be happily surprised, other years, you're in the red. Simply do not expect to make "consistent" income in this game called trading...