Hello all,
I've generally noticed that there are traders who are able to produce some very high rates of return from small account sizes. I've read of a number of cases where traders have run up five and even four figure sums to seven figure sums in the course of 12-24 months. Granted, I don't know what their risk strategy is and if they just got lucky on a general market trend, but suffice it to say there seem to be enough such stories where we hear of over 100% returns a year.
However, once the account approaches seven figures, it seems that the rate of return is often significantly lower, and a 30% return is something to be very happy about.
I have always tried to pinpoint why this is the case (we're talking Forex, specifically). Is this because:
a) Large contracts are more subject to slippage and can't get as good of a fill, you get delayed execution.
b) Your order's size moves the market and doesn't get you a favorable entry/exit.
c) The psychological fear of losing such a large sum of money and consequently a need to take less risk.
?
Is it possible, for example, to successfully use an intraday "scalping" or "jabbing" strategy with seven figure positions? Or do traders at this point resort to swing trades/position trades only?
Also, are there any figures that represent benchmarks of difficulty here, i.e. a noticeable performance decline above a certain amount of traded contracts, etc?
Thanks for any input...
I've generally noticed that there are traders who are able to produce some very high rates of return from small account sizes. I've read of a number of cases where traders have run up five and even four figure sums to seven figure sums in the course of 12-24 months. Granted, I don't know what their risk strategy is and if they just got lucky on a general market trend, but suffice it to say there seem to be enough such stories where we hear of over 100% returns a year.
However, once the account approaches seven figures, it seems that the rate of return is often significantly lower, and a 30% return is something to be very happy about.
I have always tried to pinpoint why this is the case (we're talking Forex, specifically). Is this because:
a) Large contracts are more subject to slippage and can't get as good of a fill, you get delayed execution.
b) Your order's size moves the market and doesn't get you a favorable entry/exit.
c) The psychological fear of losing such a large sum of money and consequently a need to take less risk.
?
Is it possible, for example, to successfully use an intraday "scalping" or "jabbing" strategy with seven figure positions? Or do traders at this point resort to swing trades/position trades only?
Also, are there any figures that represent benchmarks of difficulty here, i.e. a noticeable performance decline above a certain amount of traded contracts, etc?
Thanks for any input...
