Is 2% return per week realistic?

[tammyd549]

Hello all, newbie here

I have been trading stocks on and off for fun for about 3 years now and have been studying futures for the past 3 months. I am preparing a trading plan and am trying to decide how much equity I will need and plan out my risk management.

My question is this : With a good system that has an edge and proper money management rules is it possible to achieve a 2% per week rate of return ?

I know this is a very hard question to answer because of the variables but, I'm wondering if some of the experienced traders out there think this is a possible or impossible goal?

Thanks in advance!

 

[tammyd549]

Hi again, I may have posted this too quickly, I just noticed a very similar thread below so, I apologize in advance and will make sure that I do a better job checking previous threads for answers next time

 

[tomorton]

2% may sound modest but consider the long-term implications of what you are suggesting. Starting with only £1000, you will be a millionaire in less than 7 years.

Of course it's possible that you could do this and that many others already have, but, barring incredible luck, it seems incredibly ambitious.

 

[tammyd549]

Thank you, I've come to realize that if I manage my losses and stick with my rules, the profits will take care of themselves. I'm not going to concern myself too much with the end result right now. Just wanted to try and figure out risk/reward, etc for my trading plan.

I will be starting with 20-40K so using a risk/reward of 1:2 (risking 1% for a potential of 2%) might work for me - does that logic sound right?

 

[tomorton]

Good approach tammy: you have to be still in the game to win it.

 

[RockyRacoon]

Yes, that is a very good approach and is entirely possible.

Consider that with $30k, that is only an avg of $120 per day. That's 12 ticks/day trading CL or about 10 ticks/day with ES if you only trade 1 contract. (personally, I would not recommend trading CL)

Depending on what your trade time frame is (day trade, swing trade etc) I'm not sure risking 1% is feasible unless you enter with razor precision every trade.

You mentioned proper money management, can you please explain what you mean here?

 

[tammyd549]

I basically just mean being smart with my money and trying to keep the odds on my side (not gambling per se) basically exactly what tomorton said: I want to manage my money so that I can stay in the game long enough to win

Good point though about risking 1% - I will think about that some more.... perhaps I will need more capital... so much to sort out.

I'm enjoying this phase of my new "career" - creating a sound trading plan is much like creating a sound business plan, just as I did for my last business venture. I'm hoping my diligence pays off

 

[mb325]

2% is more than realistic. Don't listen to anyone else when it comes to setting your targets - they don't know anything about you or your system.

 

[Black Swan]

2% is more than realistic. Don't listen to anyone else when it comes to setting your targets - they don't know anything about you or your system.

correctamundo..also folk get far too hung up re. % returns, which IMHO is far more relevant for investment as opposed to trading... Discussion last week re. under-capitalisation, my tuppeneth was that with a 10K account making 200 quid a day should be the minimum aim.."shock horror, 2% a day!!? Impossible.." were some of the cries...

Honestly, if you cannot make 200 quid a day (most trading days) from a ten grand forex account then find another job or up your game..and quickly...

 

[tammyd549]

Thanks mb, you are so right!

I come here to listen to other opinions, but trading is so personal that what works for one may not work for another and I always make my own mind up

 

[RockyRacoon]

I basically just mean being smart with my money and trying to keep the odds on my side (not gambling per se) basically exactly what tomorton said: I want to manage my money so that I can stay in the game long enough to win

Good point though about risking 1% - I will think about that some more.... perhaps I will need more capital... so much to sort out.

I'm enjoying this phase of my new "career" - creating a sound trading plan is much like creating a sound business plan, just as I did for my last business venture. I'm hoping my diligence pays off

I'm basically actually doing the same thing that you are starting to do......and I've been through some of the stuff you have yet to experience lol.

Check out my journal: http://www.trade2win.com/boards/trading-journals/95794-casual-traders-journal.html

I still shoot to break 2% per trade, but sometimes that means I gotta manage the trade aka "proper money management' which sometimes means I risk well over 1% or I would get stopped out almost every trade.

See, I plan to NOT enter with razor precision, rather, I just plan to be on the right side of the trade and at a pretty good entry.

Either way, experimenting with futures is probably the highest risk I can think of (I speak from experience) - - - there are far less expensive ways to get your mojo runnin' and because it's been working for me, I suggest opening a FX micro acct, put a few hundred bucks in there and THEN start experimenting. ~ thank me later

 

[tammyd549]

I'm basically actually doing the same thing that you are starting to do......and I've been through some of the stuff you have yet to experience lol.

Check out my journal: http://www.trade2win.com/boards/trading-journals/95794-casual-traders-journal.html

I still shoot to break 2% per trade, but sometimes that means I gotta manage the trade aka "proper money management' which sometimes means I risk well over 1% or I would get stopped out almost every trade.

See, I plan to NOT enter with razor precision, rather, I just plan to be on the right side of the trade and at a pretty good entry.

Either way, experimenting with futures is probably the highest risk I can think of (I speak from experience) - - - there are far less expensive ways to get your mojo runnin' and because it's been working for me, I suggest opening a FX micro acct, put a few hundred bucks in there and THEN start experimenting. ~ thank me later

Thanks for the insight, I will check out your journal - take care!

 

[Scotty2Cues]

40k compounded at 2% per week in 10 years youll have £1186176477 (ignoring tax etc).

Am I correct in saying good hedfunds make 20-30% per year?

What are your results in stocks?

 

[tammyd549]

40k compounded at 2% per week in 10 years youll have £1186176477 (ignoring tax etc).

Am I correct in saying good hedfunds make 20-30% per year?

What are your results in stocks?

My results with stocks are average about 20% per year for the past 3 years...got lucky with AAPL and a few IPOs several times :clap:

I think compounding is what makes 2% return a week seem crazy...

 

[NewThought]

40k compounded at 2% per week in 10 years youll have £1,186,176,477 (ignoring tax etc).

Many fund managers who found it easy to outperform with small amounts of money then go on to under perform when they move to larger funds. The key problem is that the more money you are trading with, the more you move the market against yourself when you try to trade.

 

[advfntrader]

I would say of course its possible. the reason why you won't become a millionaire is becasue it doesn't scale like that - with higher trade size more emotions come in, it is different from trading small size. also you will want to take money out etc.

 

[Black Swan]

40k compounded at 2% per week in 10 years youll have £1186176477 (ignoring tax etc).

Am I correct in saying good hedfunds make 20-30% per year?

What are your results in stocks?

Jeez...I reckon I'll lose the will to live if I see this childish math of; "well if you compound that over 2 years...blah, blah, blah..." statement again...

Fact No1; if you're trading for a living you might prefer to take the profits out and re-invest it on/in other stuff, oh and pay the bills...

Fact No2; anyone who thinks you start of with ten cents pp/1k lot and then suddenly you're up to 100k..1000k..is seriously deluded, it just doesn't *work* that way. Try having a day were you lose a couple of grand and you'll understand why...

This compounding urban myth really needs killing, I reckon it started off from 5hite hawk system sellers trying to entrap the gullible, to see it quoted so much is absurd..

 

[scose-no-doubt]

Jeez...I reckon I'll lose the will to live if I see this childish math of; "well if you compound that over 2 years...blah, blah, blah..." statement again...

Fact No1; if you're trading for a living you might prefer to take the profits out and re-invest it on/in other stuff, oh and pay the bills...

Fact No2; anyone who thinks you start of with ten cents pp/1k lot and then suddenly you're up to 100k..1000k..is seriously deluded, it just doesn't *work* that way. Try having a day were you lose a couple of grand and you'll understand why...

This compounding urban myth really needs killing, I reckon it started off from 5hite hawk system sellers trying to entrap the gullible, to see it quoted so much is absurd..

Why is 2% a week compounding a myth? You were banging on about 10% a week from a 10k account the other day so given that, how is 2% compounding no do-able?

 

[Splitlink]

Hello all, newbie here

I have been trading stocks on and off for fun for about 3 years now and have been studying futures for the past 3 months. I am preparing a trading plan and am trying to decide how much equity I will need and plan out my risk management.

My question is this : With a good system that has an edge and proper money management rules is it possible to achieve a 2% per week rate of return ?

I know this is a very hard question to answer because of the variables but, I'm wondering if some of the experienced traders out there think this is a possible or impossible goal?

Thanks in advance!

This depends on who is asking the question because many new guys just WILL trade the wrong way! The length of time before they teach themselves to trade the right way varies. Some never get it right. If you can get it right, the answer is yes.

 

[advfntrader]

what is the right way ?