Would you be happy with 15% a year?

[NVP]

I never get tired of hearing how rich Warren Buffet is. The fact that he got that rich by not trading at all always seems an odd way in which to instruct anyone about the right way to trade.

warren buffets strategy is good but overated .........he has not adapted to market conditions and certainly not in last few years.........same for soros for example ............sure hes a legend and gambled/won millions on the GBP default ..........but hes also had many bad big trades jammed up his a*se since

no one is 100% right all of the time - don't believe the hype, always examine the facts and not the fiction , and always think for yourself

N

 

[Hamed A]

15% looks like a good number to me. I would be happy because I am new to trading. When I have more experience I would like to get more. My bank offers me below 4% on my savings so 15% is good for me. Is this manageable well? Do you think a new trader can achieve this?

 

[alexaherself]

15% looks like a good number to me.

To me, it looks like a brilliant number for a passive investor, but not so much for an active trader.

I think 15% per year is probably what someone investing in property might expect to make (even in this market, by buying in the right parts of Europe) between the rental income and the capital appreciation. And I'm aware that many property investors are very pleased with 15% per year at the moment.

My bank offers me below 4% on my savings so 15% is good for me.

Your bank offers you that (or currently less?) as a passive investor, not as someone actively managing his own money, though, so perhaps it isn't quite comparing like with like.

I'm a very part-time trader, and happy to average 3.5% per month, at the moment. Compounded on a monthly basis, even that comes to 50% per year.

Do you think a new trader can achieve this?

Definitely, but I also strongly suspect that the "average new trader" (whoever s/he is) tends to lose money, rather than making anything at all.

Growth of 15% per year would be achieved (exceeded, in fact) by making 1.25% growth per month, compounded monthly.

I think what matters, with trading, is to have achieved at least whatever the target is for many consecutive months on a demo account before trying to do it with real money. Good luck!

 

[evertontrader]

"Assuming a trader can trade successfully".... Sorry but this is nonsense.

Being successful (whatever that means) isn't as simple as flicking a switch and you then just adjust risk to increase your return, far too simplistic.

The question is not redundant, I think you are just missing the point.

Most people think 15% a year is not an attractive return based on the responses to-date and the disparity in appreciation between retail and industry on this point will be an eye-opener for some.

The percentage profit is not to relevant. How much percentage can you make is not a correct question to be asking.

If you can trade and regularly make money then the percentage you make is down to personal choice.

Once you are regularly profitable you can choose your percentage profit by adjusting your risk. If you are young and wanting to build up your account you may want to risk up to 4% a trade, aggressively pyramid and make use of notional accounts.

If you are retired and want a steady return with little risk to capital you may want to risk only between 0.25 to 1% per trade, with no pyramiding and no use of notional accounts.

The first case scenario may produce massive returns well over 15%, with perhaps a high chance of 10-30% draw downs and perhaps even a blow out for the lessor competent trader.

And the second scenario may produce a modest 7-12% return by the same trader and the same methods.

Assuming a trader can trade successfully in the first place then this question is pretty redundant, along with all the toing-and-froing arguments on this thread.

 

[TechQuant]

warren buffets strategy is good but overated .........he has not adapted to market conditions and certainly not in last few years.........same for soros for example ............sure hes a legend and gambled/won millions on the GBP default ..........but hes also had many bad big trades jammed up his a*se since

no one is 100% right all of the time - don't believe the hype, always examine the facts and not the fiction , and always think for yourself

N

Unbelievable. Bet old Warren wishes he'd listened to you. LOL

 

[NVP]

Unbelievable. Bet old Warren wishes he'd listened to you. LOL

thanks TQ....you are making my day again

 

[Splitlink]

warren buffets strategy is good but overated .........he has not adapted to market conditions and certainly not in last few years.........same for soros for example ............sure hes a legend and gambled/won millions on the GBP default ..........but hes also had many bad big trades jammed up his a*se since

no one is 100% right all of the time - don't believe the hype, always examine the facts and not the fiction , and always think for yourself

N

Warren Buffet is out of our league, so I would not get too critical of the way he performs.

He is, also, very honest. He said something like "I never invest in something that I don't understand" A reference to being left behind by Bill Gates and the hi-tech sector.

Can anyone tell me that they can analyse Google, Facebook, etc. Profits? How much debt thay have, for instance?

Talking about debt. I was surprised that he bought Tesco. I am a Jim Slater fan--or I was, years ago. He said that he never bought supermarkets, banks or mines, because he could never understand the figures. Tesco, being one of the world's largest supermarkets, with all the uncovered debt they carried, must have been a bitch to research.

In addition, being a billionaire many times over, if WB earned 15% per year on that, how long would it be before he had more money than the US government?

 

[NVP]

Warren Buffet is out of our league, so I would not get too critical of the way he performs.

He is, also, very honest. He said something like "I never invest in something that I don't understand" A reference to being left behind by Bill Gates and the hi-tech sector.

Can anyone tell me that they can analyse Google, Facebook, etc. Profits? How much debt thay have, for instance?

Talking about debt. I was surprised that he bought Tesco. I am a Jim Slater fan--or I was, years ago. He said that he never bought supermarkets, banks or mines, because he could never understand the figures. Tesco, being one of the world's largest supermarkets, with all the uncovered debt they carried, must have been a bitch to research.

In addition, being a billionaire many times over, if WB earned 15% per year on that, how long would it be before he had more money than the US government?

I rest my case S ...........of course he is one of the greatest investors of all time ...........but that doesn't mean he is perfect ...and past performance does not guarantee future performance

N

 

[NVP]

Warren Buffet is out of our league, so I would not get too critical of the way he performs.

He is, also, very honest. He said something like "I never invest in something that I don't understand" A reference to being left behind by Bill Gates and the hi-tech sector.

Can anyone tell me that they can analyse Google, Facebook, etc. Profits? How much debt thay have, for instance?

Talking about debt. I was surprised that he bought Tesco. I am a Jim Slater fan--or I was, years ago. He said that he never bought supermarkets, banks or mines, because he could never understand the figures. Tesco, being one of the world's largest supermarkets, with all the uncovered debt they carried, must have been a bitch to research.

In addition, being a billionaire many times over, if WB earned 15% per year on that, how long would it be before he had more money than the US government?

unlike like the Tesco board ?

 

[Jason101]

"1. -Assuming a trader can trade successfully".... Sorry but this is nonsense.

2. - Being successful (whatever that means) isn't as simple as flicking a switch and you then just adjust risk to increase your return, far too simplistic.

3. -The question is not redundant, I think you are just missing the point.

Most people think 15% a year is not an attractive return based on the responses to-date and the disparity in appreciation between retail and industry on this point will be an eye-opener for some.

"Assuming a trader can trade successfully"....

1. -Why is it nonsense to assume a trader is successful before going on to ascertain what percentage he can produce? I do not understand.

2. No it can take years sometimes. What did I write that made you think I thought it was easy as flicking a switch? And yes once you know your expected win to loss ratio and amount of win to amount of loss. You can then adjust your trade size to increase or decrease your percentage profit (and drawdown of course).
I just can not see what is controversial about that.

3. Point number three about what "Most people think" - I have no real opinions on.
What point is it you think I am I missing?

Here is the link to the page with my original post. Maybe you should re-read it to work out why you really think I am "talking nonsense". http://www.trade2win.com/boards/general-trading-chat/203610-would-you-happy-15-year-14.html

 

[Hamed A]

To me, it looks like a brilliant number for a passive investor, but not so much for an active trader.

Your bank offers you that (or currently less?) as a passive investor, not as someone actively managing his own money, though, so perhaps it isn't quite comparing like with like.

I'm a very part-time trader, and happy to average 3.5% per month, at the moment. Compounded on a monthly basis, even that comes to 50% per year!

In regards to your question, my bank offers me a lot less than 4% p.a You achieve 3.5% per month and 50% per year. You must know what you are doing if you are part time like you say. What strategy do you use? It seems like it is working. What do you think of hedging strategies?

 

[tokyojoe]

In regards to your question, my bank offers me a lot less than 4% p.a You achieve 3.5% per month and 50% per year. You must know what you are doing if you are part time like you say. What strategy do you use? It seems like it is working. What do you think of hedging strategies?

Hi Hamed, you have to work out your own strategy mate, you will learn nothing from someone elses strategy. As an example Alexa may have a strategy suited only to her circumstance, as do I for mine, I am also part time, but my hours will be different to Alexa's & many others.

I have my own strategy & there is no way on gods earth I would give up all I have learned to hand down to someone on a public forum. Anybody that gives up all their knowledge is welcome to, but personally I'm glad I stumbled, tripped & fell on my ars@ using my own strategy.

What you will learn is peoples points of view & you will agree & disagree at different stages while you learn.

There is no one size fits all strategy. You will go through a series of "aha" moments of joy & moments of pure misery, you will go through the mincer & get churned up & spat out. Your own personal strategy will be born from these moments.

This site is full of good advice, genuinely good traders (I am not suggesting I am one of them ) it takes a while to get to a level that may relate to your own personal circumstance.

In the mean time it is good advice to use as little capital as possible.

Good luck fella

 

[2be]

Hi Hamed, you have to work out your own strategy mate, you will learn nothing from someone elses strategy. As an example Alexa may have a strategy suited only to her circumstance, as do I for mine, I am also part time, but my hours will be different to Alexa's & many others.

I have my own strategy & there is no way on gods earth I would give up all I have learned to hand down to someone on a public forum. Anybody that gives up all their knowledge is welcome to, but personally I'm glad I stumbled, tripped & fell on my ars@ using my own strategy.

What you will learn is peoples points of view & you will agree & disagree at different stages while you learn.

There is no one size fits all strategy. You will go through a series of "aha" moments of joy & moments of pure misery, you will go through the mincer & get churned up & spat out. Your own personal strategy will be born from these moments.

This site is full of good advice, genuinely good traders (I am not suggesting I am one of them ) it takes a while to get to a level that may relate to your own personal circumstance.

In the mean time it is good advice to use as little capital as possible.

Good luck fella

There is more problem with receiving than with giving.
There are only two ways market is likely to move, up or down.
There is a natural cycle first to complicate and then re-discover again the value of simplicity. Markets are also changing at various speed, so it is important to adjust.
Do not believe that one can get great results without hard work.
That kind useless thinking is always very costly.
It is always good to know yourself, and be honest with yourself, they do not teach that in schools. The current political correctness would rather promote and excuse failure, than promote what is natural and sensible. In effect creating victim/entitlement mentality makes it easier to manipulate and control the masses.
Anyway, trade the system which is understood and tested by yourself.
Best wishes and many pips,
2be

 

[TechQuant]

The current political correctness would rather promote and excuse failure, than promote what is natural and sensible. In effect creating victim/entitlement mentality

I'd vote for you.

Back in the day, if you performed poorly, you had a problem. You either got poor, thrashed or killed. It was a motivator to do well and do better. Now the lazy and stupid are protected form their sins by legislative and assumed cultural mores. The former will eventually run out of the wherewithal to continue to support those that should not be, for their own good, and the latter will eventually decay under the artificial weight of its own superficiality and be seen for what it is: an inequitable and unsupportable tax on the able which exacerbates rather than alleviates the underlying problem.

 

[amazingfx]

I think that all depends on your investment and your goals. For some traders 15% yearly return would be just fine and for others this amount would be insufficient. However, I think it is better not to put limits to your profits.

 

[pro4Xtrader]

It is all very relative. 15% profit in relation to what potential risk?
If the risk is 1% and profit potential is 15%, oh yea I'll be very happy and bring a lot of money for trading.

If you are risking 50% targeting 15%, I don't see the point to get involved since the risk is much higher than profit potential.

Overall it is not the % that will keep you happy or unhappy, it is the balance between risk and reward that is acceptable and logical.

 

[hatemypips]

It is all very relative. 15% profit in relation to what potential risk?
If the risk is 1% and profit potential is 15%, oh yea I'll be very happy and bring a lot of money for trading.

If you are risking 50% targeting 15%, I don't see the point to get involved since the risk is much higher than profit potential.

Overall it is not the % that will keep you happy or unhappy, it is the balance between risk and reward that is acceptable and logical.

I'm about to put similar ways. most reasonable one, 15% are good as long as the risk are lower. acceptable risk ( drawdown) are the most important thing before accounted for profit gain. 10% maximum risk, over 40% profit at yearly basis, most favored target for me. hope I can get more close to it with my current trading method.

 

[Pat494]

The points made above are indeed relevant.
I think after a few years and having got to consistant break-even, the next target is a consistant profit. Bigger and bigger. 15% p.a. is ok but just one step on the ladder up.

 

[Pat Riley]

It's a bit of an arbitrary question isn't it. There are some institutions that would be well pleased to be counting on that as a guaranteed baseline each and every year. On the old 2,20 - that would be just fine thank you. But I'm guessing most retail account aren't operating on the same capital base and the absolute benefits of 15% would be considered a waste of their time. But given that apparently so few on the retail side make anything in any year, I'd suggest 15% is not a bad place ta start.

 

[mstrathern]

15% sounds fine to me, if it satisfies you and you can actually get it, and the drawdowns are not too great then go for it. But it is not easy to do in practice. I trade end of month anomalies. The method returns 500 points a year, with a max drawdown 350 points. But do I get it? Heck no, I'm too lazy, lose my nerve, go holidays, miss timing rules, etc. Under ideal conditions to make £50k a year I would need trading cap of £75k (2x max historic drawdown) a bet size of £100 a point. Too scary for me, I'd be spending all my profits on clean diapers! So I stick to being happy with 200 points a year and £10 a point. Spending most on wine, women and song, and using a small portion to slowly build up my capital as my confidence grows.