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What is a reasonable return
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What is a reasonable return

  #1 (permalink)
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What is a reasonable return

Hi all,
I'm curious what you perceive as a reasonable annual return on a percent basis. I'm not asking for proof or statements, simply from experience as a day/swing trader. Thanks.

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  #2 (permalink)
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  #3 (permalink)
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Personally, it depends on a lot of other factors, namely

1-Risk, however you wish to define it.
2-Size of account. Some people will say, well you can just leverage your strategy, if your account is 10x the size, just trade 10x the contracts, but in reality it doesn't work that way. It's what I always take away when reading market wizards, most of them got a break trading at a much higher risk then they trade now. At the end of the day, you buy stuff with currency, not %.
3-Effort put in, I'm happier with an algo making 50% a year, then having to start at screens for days for 200%.

Honestly, it'll range from 20% to 1000%+ for me. If I were to presume that you're asking to see what you could make/whether your returns are good, I think it would be better to ask what you'd be happy with. After all, happiness is what everything is about.

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Here is what the pros do

go to https://www.absolutereturns.com/

Look at what the various CTA, CPO, and forex guys do. You will find annual returns ranging from -60% to 100%+.

Attached are a couple screen shots of FX funds (don't know anything about them, just grabbed some random ones towards the top of the list).

Attached Thumbnails
What is a reasonable return-venture-capital-sa.png   What is a reasonable return-mfg.png  
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Hotch View Post
2-Size of account. Some people will say, well you can just leverage your strategy, if your account is 10x the size, just trade 10x the contracts, but in reality it doesn't work that way.

In what way, is it a liquidity issue or a psychological issue?

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SammyD View Post
Hi all,
I'm curious what you perceive as a reasonable annual return on a percent basis. I'm not asking for proof or statements, simply from experience as a day/swing trader. Thanks.

A reasonable annual return will be different for one trader to another trader due to personal lifestyle habits. Thus, someone that's single with no debt with have a different opinion of what a reasonable annual return will be versus someone supporting a family and many other different types of personal lifestyle situations.

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wrbtrader View Post
A reasonable annual return will be different for one trader to another trader due to personal lifestyle habits. Thus, someone that's single with no debt with have a different opinion of what a reasonable annual return will be versus someone supporting a family and many other different types of personal lifestyle situations.

I agree that it's personal opinion (see previous post), but I would point out that you shouldn't measure what a reasonable return is by what you can buy with it. It has to take account of the risk. If you make enough to look after your family, that's all well and good, but if you're risking the house every night to do it, that's not ok.

A 5% return isn't bad because you can't afford your mortgage, and a 500% return isn't good because you can afford it, that's the wrong perspective, it should be in relation to risk.

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Realistic Return

Hi

I think a better word to use instead of reasonable would be realistic.

I think you also have to have a look at it over a period of time. Say you used 5 years as an example. 10+ years at least would be even better and with some experience as a trader.

I would like to look at this initially without having to think about what everyone's different personal expenses etc are.

If you had a $100,000 account and you had a great first year and made 30-50% (which I think would be very good), over the next 4 years this could easily range from 100%+ per annum to break even or also even a losing year or 2. I would say that most traders come into this game with totally unrealistic expectations (me included) and get a rude shock back to reality. I think trading also makes it very difficult to budget if it is your sole source of income as returns can be quite inconsistent. I think style of trading also makes a difference ,that is day trading vs swing/position trading.

Just my 2 cents.

Would love to talk more about this and maybe some full time, sole income producing traders could chime in.

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A reasonable return IMO would be as much or more than the S&P for that year.

Psychology > Strategy ≥ Money
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Massive l View Post
A reasonable return IMO would be as much or more than the S&P for that year.

Perfect answer... thread can be closed now... all the guys dreaming of turning 10k futures account into $500 a day, please move along.

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