TOTW What is a reasonable annualised rate of return for trading?

[12WBT]

Would not have a clue on %, each trade, daily, weekly or yearly.

To me trading is being self employed.

Still have to sell my time to make a wage each day.

How much time is an open question each day.

 

[Jason101]

Completely depends on:

Your system
Your effort
Your risk profile
Your beliefs
Your luck

 

[drtro]

Depends on your effort and skill. I know a retired lady who's been trading for 6 years as a hobby. She's probably around break even since she began but she enjoys trading regardless. Then I know a guy who's been trading for about 2 years. He trades for a living and is really devoted. He's a chemist so he's a perfectionist. Made 77% return his first year on $140k. He told me a couple weeks ago he's currently up 82.5% YTD. I began trading a $200k inheritance at the beginning of the year and lost $60k in one day thanks to Tim Sykes. I've stopped trading my own capital and started at TowerHillTrading. I've began to learn how trading actually works. Profits aren't 77% or 82.% yet but I've gotten consistent (72% w/l). Still working on my R:R. If I can close the year >65% and >1R:R on my trades I will turn up my share sizes.

 

[Jack o'Clubs]

5% real return without leverage. Much more than this and you are a genius. Of course, how much you gear up your strategy is up to you and your ability to control risk and volatility, but as some have already said, % return stats without corresponding risk measures (sharpe, IRs etc) are pretty meaningless.

 

[NVP]

Depends on your effort and skill. I know a retired lady who's been trading for 6 years as a hobby. She's probably around break even since she began but she enjoys trading regardless. Then I know a guy who's been trading for about 2 years. He trades for a living and is really devoted. He's a chemist so he's a perfectionist. Made 77% return his first year on $140k. He told me a couple weeks ago he's currently up 82.5% YTD. I began trading a $200k inheritance at the beginning of the year and lost $60k in one day thanks to Tim Sykes. I've stopped trading my own capital and started at TowerHillTrading. I've began to learn how trading actually works. Profits aren't 77% or 82.% yet but I've gotten consistent (72% w/l). Still working on my R:R. If I can close the year >65% and >1R:R on my trades I will turn up my share sizes.

keep going D........

we've all at some early point dropped money trading over the years..... and I also dropped a packet in my teens on the horses after years of profit ........but not $60k in one day

jees to be coming back from that demands real respect

N

 

[Triggerfish]

"What is a reasonable annualised rate of return for trading?"

The word "reasonable" is subjective to each and every trader due to their understanding of the markets.....hence there will be a view/perception of what is/isn't possible.

Therefore, that view/perception will be a limited one.

After all, there is a gap between a positive expectation and actually achieving it. As reality usually "IS" different from the outset due to ones own limited perception.

So the word reasonable is meaningless and nothing but a made up figure!

 

[VielGeld]

5% real return without leverage. Much more than this and you are a genius. Of course, how much you gear up your strategy is up to you and your ability to control risk and volatility, but as some have already said, % return stats without corresponding risk measures (sharpe, IRs etc) are pretty meaningless.

Assuming you are profitable in the first place, this is the most sensible answer I can see here.

 

[Pferd]

5% real return without leverage. Much more than this and you are a genius. Of course, how much you gear up your strategy is up to you and your ability to control risk and volatility, but as some have already said, % return stats without corresponding risk measures (sharpe, IRs etc) are pretty meaningless.

for 5% annualy is not interesting in my point of view to get into this business/hobby/job. The risks involved are too high and this return is not better than having buy to let property.

Is a highly especulative activity, so the rewards must be enough to compensate this fact. I am not speaking about about 300% annualy return, but less than 20% annualy is not enough bearing in mind the risks of substantial lost of capital.

Before the brigade of professional commentators jump all over in excitment giving opinions about the above figures, just mentioning that this is just an opinion based on how I see this business, nothing to do with my personal performance/expectations. Just saying.....

 

[paszkman]

5% real return without leverage.

By 'real return' do you mean inflation+5%?

 

[Jack o'Clubs]

By 'real return' do you mean inflation+5%?

yes

 

[Forexmospherian]

Assuming you are profitable in the first place, this is the most sensible answer I can see here.

I would have to agree with the first part of your comment - ie assuming your profitable in the first place - and we all know 80 -90% re not even going to be profitable for one year - never mind - many years

But surely we are not talking Institutional / Commercial trading rules and results - using multi million dollar capital accounts we are talking retail trading - with most capital accounts under $10k - not even $50 or $100+k needed for full time retail trading .

Then its a different ballgame

Take a look at these - LIVE trading results over last 3 years - audited by a top accountancy company as well

http://www.ironforex.com/en/promotions-contest/past-live-competitions/2012

Ok these traders are taking big risks and using leverage - and of course - are good - so they will not do 1000 - 5000% every few months - they will drop down to 20 -50% per month - playing safe with proper retail MM - not ultra safe commercial MM -

Now there's over 20 top FX traders here with results with real Live money here who make over 1000% ror in a few months

So if they stopped and did no more trading that year - then they have made over 1000% ror per annum - some even 2000 -3000% on live money.

Get real 5% - yes that a stage for the 10 -20% of traders who can even make a profit - but then real top retail traders - 5% per annum is just an insult - or joke - either way

Regards

F

 

[metrader]

Charlie managed 450 - 500% so far (10k to 100k in 2 years challenge)

PS He was in that BBC programme about traders

 

[brewski1984]

97% of these posts are just full of meaningless numbers

 

[Jack o'Clubs]

Ok these traders are taking big risks and using leverage - and of course - are good -F

Or lucky. Give a similar number of monkeys typewriters and one will come up with the Complete Works of Shakespeare.

I see ironfx offers up to 500:1 leverage, I'm not surprised the winner of a massive competition has a 3000%+ return over the 3 months it is live. What's interesting when you look down the rankings list is how quickly the returns tail off, considering the leverage available. A 100% return on a 500:1 geared account doesn't sound too impressive to me. Considerably less than a 5% ungeared real return in fact...

 

[drtro]

Or lucky. Give a similar number of monkeys typewriters and one will come up with the Complete Works of Shakespeare.

I see ironfx offers up to 500:1 leverage, I'm not surprised the winner of a massive competition has a 3000%+ return over the 3 months it is live. What's interesting when you look down the rankings list is how quickly the returns tail off, considering the leverage available. A 100% return on a 500:1 geared account doesn't sound too impressive to me. Considerably less than a 5% ungeared real return in fact...

Is that legal? I've seen people get burned in a week on prop firms giving even 10:1 leverage.

 

[TwinToWin]

This is certainly a sensitive subject... so long as the bills get paid and there's cash to play I'll be happy.

I expect the stress to be proportional to the big %'s and will demand a skill level beyond my grasp. So for me as a limited time trader I'm working toward 50% as a good result, while still working the day job.

 

[Forexmospherian]

Or lucky. Give a similar number of monkeys typewriters and one will come up with the Complete Works of Shakespeare.

I see ironfx offers up to 500:1 leverage, I'm not surprised the winner of a massive competition has a 3000%+ return over the 3 months it is live. What's interesting when you look down the rankings list is how quickly the returns tail off, considering the leverage available. A 100% return on a 500:1 geared account doesn't sound too impressive to me. Considerably less than a 5% ungeared real return in fact...

Is that legal? I've seen people get burned in a week on prop firms giving even 10:1 leverage.

We are talking RETAIL TRADING

No retail Fx intraday trader is going to trade spot FX without leverage - unless he has a multi million dollar account - and then I would not call him retail

I certainly would not recommend 1000:1 or 500:1 on any account over $1k - unless you really know what you are doing - but 50 and 100:1 are perfectly acceptable - even for a $100k account - I even used 200:1 for 9 months on a $150k account - but there again - I know what I am doing with 1% stake size and 5 -7 pip stops

If you are saying well on totally ungeared returns - then to me its like saying to a retail trader - use a spreadbetting account and also pay 25% or 40% tax as well on your winnings. Now why would you do that ?

Surely we are comparing apples with oranges comparing commercial / institutional ror's with retail trading accounts - and that's the problem

Regards

F

 

[CostaKapo]

This is certainly a sensitive subject... so long as the bills get paid and there's cash to play I'll be happy.

I expect the stress to be proportional to the big %'s and will demand a skill level beyond my grasp. So for me as a limited time trader I'm working toward 50% as a good result, while still working the day job.

 

[kwickwool]

Just to add to the leverage point, with the top tier brokers u will rarely get above 50 or 100:1 but if you can get 500:1 you should take it for sure always, reason being is you can trade still based on your 50:1 or 100:1 leverage but you need less of your cash in your brokers account. If you trade typically 50:1 and u are offered 500:1 then you only need to keep 10% of your capital in your brokers account and can have your own personal account with the other 90% that u count as your trading capital also but nice and safe. Maybe a few tops up required etc if u hit a bad run but security of your funds would be nice benefit.

 

[Pferd]

Just to add to the leverage point, with the top tier brokers u will rarely get above 50 or 100:1 but if you can get 500:1 you should take it for sure always, reason being is you can trade still based on your 50:1 or 100:1 leverage but you need less of your cash in your brokers account. If you trade typically 50:1 and u are offered 500:1 then you only need to keep 10% of your capital in your brokers account and can have your own personal account with the other 90% that u count as your trading capital also but nice and safe. Maybe a few tops up required etc if u hit a bad run but security of your funds would be nice benefit.

Very smart comment!