Is 2% return per week realistic?

[4xpipcounter]

That's my definition of volatility. In 2007 and 2008, GBP/JPY had many strong moves in that huge DOWN. There was also a lot of volatility, but once the DOWN begun, it was very predictable what the end result was going to be. Since it hit its low in Jan. 2009, it's been pretty much a sleeper, as there has only been a 4,300-pip range since then.
BTW, I was thinking you were referring to May 6th. I got a really nice short on it aftre it came back up.

It depends on your definition of volatility. To me, volatility is when the normal daily range of a pair is around 230 and, suddenly, moves to more than 600. I referred to my GBP/JPY trading previously, when the moves were wild. Up 300 in 5 mins and then drop 200 a minute later. One day the range was 1,100 pts and swings of more than 200 pts during that day totalled 3,000 pts. Now THAT'S volatility.

 

[alan5616]

Guys,

I hope that I haven't given the impression that I have the Holy Grail of trading-I don't.

It has taken me thousands of hours testing systems, strategies, programmed EAs and live trading to get where I am now. I manage an account for a few friends and my money is in with theirs. My method of trading yields high rewards but, it is, also, very high risk. On most trades I'm leveraged at 1:400 with NO stop. Although, I have an emergency hedge strategy, to limit the damage, if the account is down by x% at any time during the trading day. I haven't had to trigger it yet but, came very close last Fri (20th)

Those friends know that, if they want 100% return per month, they have to accept the fact that one unexpected news item or, black swan event could seriously damage the account.

 

[4xpipcounter]

You still haven't defined how you came up with that. This is why we are having trouble getting around it. Also, please tell us how you can gauge it statistically.

Yes that is volatility but statistically, GY is more volatile in terms of daily range than it was in 2008.

 

[4xpipcounter]

It never dawned on me you were giving the impression you had some grail. It's just good to know you are trading profitably.
It also took me time and lots of experimentation to develop my methodology, of which I am perfectly happy with.

Guys,

I hope that I haven't given the impression that I have the Holy Grail of trading-I don't.

It has taken me thousands of hours testing systems, strategies, programmed EAs and live trading to get where I am now. I manage an account for a few friends and my money is in with theirs. My method of trading yields high rewards but, it is, also, very high risk. On most trades I'm leveraged at 1:400 with NO stop. Although, I have an emergency hedge strategy, to limit the damage, if the account is down by x% at any time during the trading day. I haven't had to trigger it yet but, came very close last Fri (20th)

Those friends know that, if they want 100% return per month, they have to accept the fact that one unexpected news item or, black swan event could seriously damage the account.

 

[4xpipcounter]

BS, I agree with you on one item, and that is I don't know the difference between average, above average, etc etc, blah, blah, blah.
But, let me "repeat myself". Why would someone have to go get another job if they are making 100 quid per day on 10K and are contented and happy doing so? How did you come up with that standard, and why is it up to you to set the standard?

An average trader? No idea what that is...sorry...but allow me to repeat myself, IMO if you are not making 200 quid a day (most days) from combined £10 grand accounts, employed in the market at any one time, then get a different job..If that exposes yours, or anyone else's limitations as to what is very achievable, then deal with your issues..not my problem....not interested...

 

[Dubai]

You still haven't defined how you came up with that. This is why we are having trouble getting around it. Also, please tell us how you can gauge it statistically.

It's called research.

http://www.mataf.net/en/tools/02-01-volatility

Enter 99 weeks and then widen chart on GBPJPY and look at average volatility.

 

[scose-no-doubt]

http://www.mataf.net/en/tools/02-01-volatility
.

owe emm geee!!

 

[4xpipcounter]

Let me say, respectfully, that is called copping out. Any 2 people can do research and their findings end up being completely polarized, so that deos not cut it. I.e--Someone did research on why infants should have their own seat on a plane. Supposedly, they proved why this needs to take place. Someone else comes along with their research and says that infants should still be able to stay on Mom's lap.
Right! The last 99 weeks has gone sideways. Not much volatility.

It's called research.

http://www.mataf.net/en/tools/02-01-volatility

Enter 99 weeks and then widen chart on GBPJPY and look at average volatility.

 

[FX Bandit]

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!

It is impossible to answer as you already realise.

That said, assuming your R is 2%, you are talking about a net return of 1R per week. In my experience, that is certainly a realistic goal.

Personally, I would prefer to think more in terms of a monthly return at least - weekly is simply far too variable. It also creates unneccessary pressures and potentially leads to forced trading - "I need to make another X% this week" etc. To my mind it is vital that you allow the market to come to you, rather than chasing after it.

One very positive thing from your post is that you are at least beyond thinking in terms of pips ("Can I make 100 pips per week?" and so on). Pips are meaningless.

 

[4xpipcounter]

Pips and % of return is correlated. I trade on 10% margining on all my trades. I shorted the AUD/JPY last night before I went to bed. I woke up and closed it for +91 pips. That also meant 9.1% gains on my account overnight. Again, % and pips are correlated.
The one point you made is good, and that is to not make goals for pips or % of return. Just trade your methodology and the pips or the % will be there.

It is impossible to answer as you already realise.

That said, assuming your R is 2%, you are talking about a net return of 1R per week. In my experience, that is certainly a realistic goal.

Personally, I would prefer to think more in terms of a monthly return at least - weekly is simply far too variable. It also creates unneccessary pressures and potentially leads to forced trading - "I need to make another X% this week" etc. To my mind it is vital that you allow the market to come to you, rather than chasing after it.

One very positive thing from your post is that you are at least beyond thinking in terms of pips ("Can I make 100 pips per week?" and so on). Pips are meaningless.

 

[FX Bandit]

Pips and % of return is correlated. I trade on 10% margining on all my trades. I shorted the AUD/JPY last night before I went to bed. I woke up and closed it for +91 pips. That also meant 9.1% gains on my account overnight. Again, % and pips are correlated.
The one point you made is good, and that is to not make goals for pips or % of return. Just trade your methodology and the pips or the % will be there.

Have to disagree, pips are irrelevant. Would you rather make 10 pips or 100 pips per week?

Impossible to answer (I hope), without more information, such as overall risk. 10 pips is better than 100 pips if it requires a risk of 5 pips and the hundred requires a risk of 200.

1 pip might be a lot or a little, depending upon your overall risk.

Pips change, position size changes according to pips, %R is what matters.

 

[4xpipcounter]

I said % of gains and pips are correlated, not irrelevant. Someone else said they are irrelevant.
I margin 10% consistently every trade. Therefore, most of what you mentioned is irrelevant, because of the fact there is no differing on my margin. I also gain more than 100 pips per week.

Have to disagree, pips are irrelevant. Would you rather make 10 pips or 100 pips per week?

Impossible to answer (I hope), without more information, such as overall risk. 10 pips is better than 100 pips if it requires a risk of 5 pips and the hundred requires a risk of 200.

1 pip might be a lot or a little, depending upon your overall risk.

Pips change, position size changes according to pips, %R is what matters.

 

[FX Bandit]

I said % of gains and pips are correlated, not irrelevant. Someone else said they are irrelevant.
I margin 10% consistently every trade. Therefore, most of what you mentioned is irrelevant, because of the fact there is no differing on my margin. I also gain more than 100 pips per week.

Hi 4X,

what do you mean when you say you "margin 10% consistently every trade"? That you risk the same amount every trade, the margin requirement being 10% of your account?

 

[4xpipcounter]

There is 1 lot per $10,000 that is in my account per trade. In other words if there is $30,000 in my account, then there is 3 lots. If there is $33,000, then there is 3.3 lots. This means for every 10 pips gained on my account, it is 1% gained. 100 pips, there is 10%.
The risk is also the same, but I've had one losing week in the last 3 years, so I have had not much backwards adjustment to do. Don't mean to be cocky by that statement. It is just fact.
The same amount is relevant to the same %, not the same dollar amount per trade.

Hi 4X,

what do you mean when you say you "margin 10% consistently every trade"? That you risk the same amount every trade, the margin requirement being 10% of your account?

 

[FX Bandit]

There is 1 lot per $10,000 that is in my account per trade. In other words if there is $30,000 in my account, then there is 3 lots. If there is $33,000, then there is 3.3 lots. This means for every 10 pips gained on my account, it is 1% gained. 100 pips, there is 10%.
The risk is also the same, but I've had one losing week in the last 3 years, so I have had not much backwards adjustment to do. Don't mean to be cocky by that statement. It is just fact.
The same amount is relevant to the same %, not the same dollar amount per trade.

Well, I'm glad it's working for you. How do you determine your overall risk then - do you have a fixed stop?

Anyway, one losing week out of 156 is very impressive.

 

[4xpipcounter]

I rounded the 3 years off. It is actually 149 weeks. It was the 3rd week in Oct 2007.
I don't use stops. I don't like sudden spikes taking out my trades. My entries are based on entering at extremities within a trend, and going the contrarian direction, or finding the proper retracement level within a trend and entering accordingly. As an example, I just entered the EUR/JPY. It still has further up to go, but it was evident a strong correction was going to begin the week. I waited for it to hit the projected correction level and entered. I missed the targeted correction, so my current position is down by 35 pips, currently. Because I know the correction is about completed, and much higher highs will be achieved I am relatively assured of a very good winning trade.
Last night, was a little different. The AUD/JPY projected peak was 77.00. A correction I knew was going to ensue to circa 75.00 (most likely the low end for the week.). In knowing that, I entered the trade while price was falling at 76.95. I took a nice safe, overnight winning trade of 91 pips. It is still dropping, but momentum is waning since I took it out. If it hits the circa 75.00 area, then I'm ready to go long, maybe. That is based on whatever other pairs are doing. I look for the greatest probability of success in a trade, and what yields the most pips.

Well, I'm glad it's working for you. How do you determine your overall risk then - do you have a fixed stop?

Anyway, one losing week out of 156 is very impressive.

 

[FX Bandit]

I rounded the 3 years off. It is actually 149 weeks. It was the 3rd week in Oct 2007.

Really? Oh that's different - 1 week out of 149 is rubbish .

On a serious note, I can see that we have a very different approach. I can't say that I'd be comfortable doing it your way, but obviously if it works for you then great.

 

[4xpipcounter]

That "week" happened only about 5 weeks ago, so it is still fully ensconced in my memory.
The one week was rubbish. The other 148 were fine I'm trying to get as much space between me and what happened 5 weeks ago--lol. Oh, forgot to say, it was -50 for the week.
It is not a matter of 2 traders agreeing on their methodological approach. What matters is what is right for each trader. What counts is if you are winning consistently. As long as that is the case, then your way is right for you.

Really? Oh that's different - 1 week out of 149 is rubbish .

On a serious note, I can see that we have a very different approach. I can't say that I'd be comfortable doing it your way, but obviously if it works for you then great.

 

[SanMiguel]

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!

Are you day trading or swing trading?
IMO, 2% per week is very realistic. My target is 5-10% per week 3 out of 4 weeks in the month (the 1 off week I aim to lose no more than 5% and preferably somewhere near 0%).

But aim for whatever you want to aim for, it's all relative to you and your account.

 

[wallstreetwarrior87]

The world is your oyster, trade for a month and evaluate your results.

Are you going to measure in relation to risk? Or are you only concerned with the bottom line regardless of how it is achieved?

Running a 4 minute mile is realistic to some but a pipedream for most.