Do u have a benchmark? | Forex Factory

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Do u have a benchmark?

  • #1
  • First Post: Edited 9:43am May 22, 2007 9:31am | Edited 9:43am
Semar has a thread re a benchmark trading system. (See the link in Similar Threads at bottom of page). I have been wondering about this recently. Do you use a benchmark to evaluate your trading performance. If I was a stock trader I could perhaps use the performance of the S&P 500 as a benchmark of how well I was doing. Do any of you use any benchmarks for your Forex acct. Maybe T-Bills? Maybe you could elaborate on why the particular benchmark is meaningful.
I have simply been using the rise or fall of my equity, but am starting to think that this may not be the best way to judge the performance of my trading.
In trading, there is no bullshit. You either make money or you don't.
  • #2
  • May 22, 2007 9:56am May 22, 2007 9:56am
Because forex is a cash market the best benchmark is cash.
It makes sense for a stock trader to benchmark against the the S&P because that is the aggregate group in which he trades. The same would be true for a commodities trader to benchmark against the CPI.

The way I look at is to compare my progress against other cash investment vehicles such as money market, CD, or even different types of bonds or bond funds. Most of these will get right now somewhere between 3% and 8%.

The last two months of trading my cumulative percentage increase of my acount was 58.5% (over 60 days). Not bad compared to a best case scenario in other markets of 8% maybe 10% per year. We shall see how it ends up for me at the end of the year. If I'm anything better than 15% then this would be awesome. (figuring that taxes will probably take at 1/3)
Trully, I don't hope for more than 3% per month. If I get more -great! So far, forex has been good to me.
  • #3
  • May 22, 2007 7:33pm May 22, 2007 7:33pm
Quoting mrgreen
Semar has a thread re a benchmark trading system. (See the link in Similar Threads at bottom of page). I have been wondering about this recently. Do you use a benchmark to evaluate your trading performance. If I was a stock trader I could perhaps use the performance of the S&P 500 as a benchmark of how well I was doing. Do any of you use any benchmarks for your Forex acct. Maybe T-Bills? Maybe you could elaborate on why the particular benchmark is meaningful.
I have simply been using the rise or fall of my equity, but am starting to think that this may not be the best way to judge the performance of my trading.
Intresting idea.
If I made money this month and 95% lost money I guesse I'm above the bench
BUT
How did I do amongst those that made money?
Now that would leave a mark.
Not sure if that data is public tho.
  • #4
  • May 23, 2007 9:54am May 23, 2007 9:54am
Quoting KudzuFX
The way I look at is to compare my progress against other cash investment vehicles such as money market, CD, or even different types of bonds or bond funds. Most of these will get right now somewhere between 3% and 8%.
Thanks KudzuFX: A benchmark using overall cash performance does seem to be the right way to approach this. I asked because I am leaning towards much longer term holds using daily, weekly and monthly charts I need to have some means of measuring the overall return.
I figure if I am outperforming the benchmark overall I won't be so worried that one or two of the trades is down or elated that one or two are up. Overall performance will help me keep my brain in check.

Bemac: I am looking forward to the day I can think about comparison to the rest of the 5%. I've been trading 2 years and only now have started to be consistently up from my monthly starting point. Couple more years of apprenticeship and I'll be a real trader. I think it's a sign of maturity that 1 - 3% return per month on my part is DAMN good. When I started 1-3% a day was what I wanted. LOL.
In trading, there is no bullshit. You either make money or you don't.
  • #5
  • May 24, 2007 8:40am May 24, 2007 8:40am
Here's another thought.

Set your own benchmark.

I have one of my mottos that keeps the risk side of my brain in check:

"Brake even is better than broke."

In other words anything more than a zero return is awesome because in Forex so many traders end up losing it to some degree before they get out or face a margin call.

I have another one of my mottos that I think on alot:
"It is easier to lose money in Forex than it is to make money."
  • #6
  • May 24, 2007 6:12pm May 24, 2007 6:12pm
Kudos KudzuFX

I would go one pip further and say "A Flat Trade goes in the Winning Column."

In other words;
Total Trades - Lossing Trades =Winning Trades
  • #7
  • May 24, 2007 8:49pm May 24, 2007 8:49pm
I use the Barclay group (http://www.barclaygrp.com) to gauge my performance. If you register (free!) you can see the performance of the top 10 currency traders on the right.
  • #8
  • May 25, 2007 9:59am May 25, 2007 9:59am
My benchmark is 3% per month. Since November 2006, I’ve either want over or came close to my benchmark. As of today, I hit my 3%, so I will go over a little for this month. My goal is to be somewhere around 36% by November 2007. I know most think 3% is too little, but you have to start somewhere. The best part is I am profitable month after month during 2nd year of live trading.

Happy Trading ...
If it is not broken, fix it until it is!
  • #9
  • May 25, 2007 5:26pm May 25, 2007 5:26pm
Quoting Pipex
...I know most think 3% is too little, but you have to start somewhere. The best part is I am profitable month after month during 2nd year of live trading.

Happy Trading ...
I doubt most "Traders" feel 3%/Month is too little. Try getting 42.5%/annum @ the Bank
  • #10
  • May 26, 2007 10:08am May 26, 2007 10:08am
Quoting mrgreen
Semar has a thread re a benchmark trading system. (See the link in Similar Threads at bottom of page). I have been wondering about this recently. Do you use a benchmark to evaluate your trading performance. If I was a stock trader I could perhaps use the performance of the S&P 500 as a benchmark of how well I was doing. Do any of you use any benchmarks for your Forex acct. Maybe T-Bills? Maybe you could elaborate on why the particular benchmark is meaningful.
I have simply been using the rise or fall of my equity, but am starting to think that this may not be the best way to judge the performance of my trading.
create your own benchmarks. like eurusd uptrend this year. did your system perform better or worse than simply buying and holding eur. with all the swap deductions I don't think its more than 1.2 pips per day.
  • #11
  • Last Post: May 26, 2007 10:10am May 26, 2007 10:10am
Quoting Pipex
My benchmark is 3% per month. Since November 2006, I’ve either want over or came close to my benchmark. As of today, I hit my 3%, so I will go over a little for this month. My goal is to be somewhere around 36% by November 2007. I know most think 3% is too little, but you have to start somewhere. The best part is I am profitable month after month during 2nd year of live trading.

Happy Trading ...
a loss of capital looks bad against all sorts of benchmarks, hehe. keep up the good work. consistency is the key.
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