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What is a reasonable return
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What is a reasonable return

  #71 (permalink)
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bushido View Post
Seems like people are using different bases to calculate return. I think its more accurate if return is calculated over the account size (assuming entire account is for day trading futures) rather than margin posted for contracts traded.

Very easy to see the difference:
If you have a trading account and trade "all in" - the ROI is on that investment.
Assuming you put only 2% of your trading account at risk - the ROI has to be divided by 50 to get the percentage.
Believing that more than half of the traders are trading at higher than 2% risk (with small accounts inevitable)
that ROI percentage calculation is quite different from that one with a better cushion.
As mentioned - it depends first on your money management combined with your trading consistency and a relative
small drawdown. This is a factor one could calculate and name it efficiency.

GFIs1

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  #72 (permalink)
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Sounds to me like 5-10% per week might be hard to do....SO why trade? If 1-2% per week is even far fetched then trading is useless. I expect 5-10% per week can be done on any size account. But I'm no professional. I personally know 1 guy with $15,000 account that regularly does over $1000.00 everyday. He must be the exception to the norm.

I may hang up my trading dreams before I get started! Thanks for saving me!

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  #73 (permalink)
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bbstulsa View Post
I personally know 1 guy with $15,000 account that regularly does over $1000.00 everyday. He must be the exception to the norm.

Ask this friend to teach you. Seriously. Anyone pulling in $250K per year on a $15K account is unbelievably good. Listen to what he says and does.

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Last edited by kevinkdog; March 13th, 2013 at 11:28 PM.
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  #74 (permalink)
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bbstulsa View Post
I personally know 1 guy with $15,000 account that regularly does over $1000.00 everyday.

Then he is overleveraged and risking too much. Let's say someone risks something semi-reasonable like 1% per trade (which is still far too much). You're telling me that he takes 6 trades a day risking 1%, and making 1% on each; or, he takes 2 trades, risking 1% on each and getting a 3R return on each, etc? No, not likely. He probably risks much more, and has so far gotten lucky and has not gotten blown out of the water. Ask your friend what his typical drawdown on a trade is, if he even makes that much, which is not likely (have you seen his statements, or has he just told you this?). One does not make 6% per day, "every day" as you say, with reasonable risk.

I'm not trying to piss on stories of successful traders; after all, Jack Schwager has claimed that Marty Schwartz (I think it was him) at one time pulled 25% per month (and withdrew it), which is 1% per day. THAT, I think is amazing but doable, and I believe it 100%. Any trader would dream of consistent returns like that. But 6% per day, every day? Someone's lying, or lucky he still has an account. Sorry, reality trumps fish tales, and math doesn't lie.

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  #75 (permalink)
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josh View Post
Then he is overleveraged and risking too much. Let's say someone risks something semi-reasonable like 1% per trade (which is still far too much). You're telling me that he takes 6 trades a day risking 1%, and making 1% on each; or, he takes 2 trades, risking 1% on each and getting a 3R return on each, etc? No, not likely. He probably risks much more, and has so far gotten lucky and has not gotten blown out of the water. Ask your friend what his typical drawdown on a trade is, if he even makes that much, which is not likely (have you seen his statements, or has he just told you this?). One does not make 6% per day, "every day" as you say, with reasonable risk.

I'm not trying to piss on stories of successful traders; after all, Jack Schwager has claimed that Marty Schwartz (I think it was him) at one time pulled 25% per month (and withdrew it), which is 1% per day. THAT, I think is amazing but doable, and I believe it 100%. Any trader would dream of consistent returns like that. But 6% per day, every day? Someone's lying, or lucky he still has an account. Sorry, reality trumps fish tales, and math doesn't lie.

Likely this is the reality of the friend's situation.

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  #76 (permalink)
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josh View Post
Then he is overleveraged and risking too much. Let's say someone risks something semi-reasonable like 1% per trade (which is still far too much). You're telling me that he takes 6 trades a day risking 1%, and making 1% on each; or, he takes 2 trades, risking 1% on each and getting a 3R return on each, etc? No, not likely. He probably risks much more, and has so far gotten lucky and has not gotten blown out of the water. Ask your friend what his typical drawdown on a trade is, if he even makes that much, which is not likely (have you seen his statements, or has he just told you this?). One does not make 6% per day, "every day" as you say, with reasonable risk.

I'm not trying to piss on stories of successful traders; after all, Jack Schwager has claimed that Marty Schwartz (I think it was him) at one time pulled 25% per month (and withdrew it), which is 1% per day. THAT, I think is amazing but doable, and I believe it 100%. Any trader would dream of consistent returns like that. But 6% per day, every day? Someone's lying, or lucky he still has an account. Sorry, reality trumps fish tales, and math doesn't lie.

Just because he has 15,000 in his account does not mean that is what he is basing his risk off of. He could also have 100k sitting safetly in his bank account that he doesnt feel safe giving a broker especially after pfg. Or he could be making the whole thing up, there is no way to know, but we can sit here and debate it all day long, the joys of the internet.

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  #77 (permalink)
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mongoose View Post
Just because he has 15,000 in his account does not mean that is what he is basing his risk off of. He could also have 100k sitting safetly in his bank account that he doesnt feel safe giving a broker especially after pfg.

Good point, did not think of it this way. Then if the hypothetical 100K is indeed to be used as capital, then we can safely say that his "account" is $115K, in which case this is still an exceptionally good return (1% per day) but more in the realm of possibility. The risk is based off of money one intends to use as risk capital, so in the example you give, the account size is actually much larger than $15K, the risk is smaller, and the gain is smaller.

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  #78 (permalink)
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TRADING THE ES

I must be missing something! With 6 tick stop loss in place and a target of 4 ticks with a $10,000 account, No one here can profit $500.00 on 1 trade trading 10 contracts? I know it can be done 4-6 times per day.

Why would you need a $100,000.00 account to trade 10 contracts?

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  #79 (permalink)
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bbstulsa View Post
I must be missing something! With 6 tick stop loss in place and a target of 4 ticks with a $10,000 account, No one here can profit $500.00 on 1 trade trading 10 contracts? I know it can be done 4-6 times per day.

Why would you need a $100,000.00 account to trade 10 contracts?

Sure, any lucky fool can profit $500 on one trade. But only a fool would continue to play such a loser's game if he did happen to win once.

One loss, and you are down $800, 8% of your account. Have you ever had 3 losses in a row? You are down 25%, and now must make 33% profit to get back to breakeven.

If you were to embark upon such idiocy with real money, you would fully deserve losing it. Just give it to charity if you are going to be so reckless and foolish.

Sorry, but I am calling a spade a spade. If it is being rude, so be it. It is amazing how often I read this ridiculousness from people who have never tried it. "It's so easy." "Ever tried it?" "Nope."

Mathematics are not in your favor with the above strategy, and because of this it WILL lose, sooner or later, but from the sound of it, sooner.

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  #80 (permalink)
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You are right! Only a idiot would trade that recklessly.

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