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Realistic ROI and Account Size

  • #21
  • Jun 3, 2010 4:13am Jun 3, 2010 4:13am
Quoting mikkom
And faces a larger risk of ruin. There is a reason why funds have risk measures.

Note that in nowhere I say that that kind of return is not possible, I'm just saying that doing it consistently means you are an above average trader (I think about one of the top 1-5% of all traders there are).

Anyway I think I have said all I can about this issue. Good discussion to everyone else.
One of the traders from market Wizards made 25% a month for 10 years.
Economists have forecast 9 out of the last 5 recessions
  • #22
  • Jun 3, 2010 4:22am Jun 3, 2010 4:22am
Quoting markmm
One of the traders from market Wizards made 25% a month for 10 years.
Thanks for bringing that up, markmm. Old figures, but still..very impressive!!!
  • #23
  • Jun 3, 2010 4:43am Jun 3, 2010 4:43am
Amature traders talk about ROI while professional traders talk about risk adjusted return.

IMHO ROI is only meaningful to catch public's eyeballs.
  • #24
  • Jun 3, 2010 6:16am Jun 3, 2010 6:16am
Quoting ForexQuant
Amature traders talk about ROI while professional traders talk about risk adjusted return.

IMHO ROI is only meaningful to catch public's eyeballs.
If we start talking about sharpe ratios etc not many will know what that means
Economists have forecast 9 out of the last 5 recessions
  • #25
  • Jun 3, 2010 7:06am Jun 3, 2010 7:06am
Quoting ForexQuant
Amature traders talk about ROI while professional traders talk about risk adjusted return.

IMHO ROI is only meaningful to catch public's eyeballs.
Couldn't agree more. What attracts investors and their capital to a professional fund is consistence of risk-adjusted returns not ROI.
  • #26
  • Jun 3, 2010 7:45am Jun 3, 2010 7:45am
Quoting markmm
One of the traders from market Wizards made 25% a month for 10 years.
Yeah, he must be the hidden owner of the world. You should spent some time in private with your calculator, after some amount you can't increase your account with that percent anymore every month, even if you start with 100$.
  • #27
  • Jun 3, 2010 8:38am Jun 3, 2010 8:38am
Quoting Sauron
Yeah, he must be the hidden owner of the world. You should spent some time in private with your calculator, after some amount you can't increase your account with that percent anymore every month, even if you start with 100$.
Who said he compounded it all that time? You jump to assumptions you should fix that as its a bad sign.

His name?

Marty Swartz.

Quote

Marty started out with a hundred grand, but his seat on the AMEX cost him ninety thousand dollars, so he was left with ten thousand dollars of trading capital. With only ten thousand dollars he made over eight grand on his first trade. In his second year of trading he made six hundred thousand dollars, and in this third year he made 1.2 million.

Any idiot knows you cant compound for ever, but you can move your profits into other areas.
Economists have forecast 9 out of the last 5 recessions
  • #28
  • Jun 3, 2010 9:45am Jun 3, 2010 9:45am
Ok, he didn't compound it so he doesn't own the world.
Anyway, I don't buy it, as one must risk a lot to achieve 25% monthly and it didn't make sense after he reached a few million.
As I understood he started his own fund to manage other people's money, which means he became suddenly very conservative.
  • #29
  • Jun 4, 2010 12:53am Jun 4, 2010 12:53am
Quoting markmm
Just wanted to highlight the realism about ROI and account sizes....
Trading with a small account can be difficult however, It can be done. I had a decent sized account, in the 5 digit area, Personal/Family issue came up and had to take out alot of my trading capital. I was left with $2,700. I drew up a trading plan, my trading method/strategy, and an excel sheet that calculates and analyzes my trading performance by P/L, %, Winning ratio,..etc. I would reward my account a small amount of money ($100 - $300), if i ended the month in profit. The account is now close to $10,000.
Jan: 15%+ Feb: 4.2%+ Mar: 10%+ Apr: 0.3%+ May: 24%..

IMO weather you have a small account or large account, it all comes down to money management to get through the losing streaks, a good trading plan, a good method of making profitable trades by analyzing the trade at hand Risk/Reward.
"The market doesn't beat them, they beat themselves" - J. Livermore
  • #30
  • Jun 4, 2010 2:52am Jun 4, 2010 2:52am
Quoting mikkom
And faces a larger risk of ruin. There is a reason why funds have risk measures.

Note that in nowhere I say that that kind of return is not possible, I'm just saying that doing it consistently means you are an above average trader (I think about one of the top 1-5% of all traders there are).
I have no idea why you would think I suggested the typical trader could do it. I'm talking about good traders, not the marginal-to-losing majority.

RoR is higher, but still quite small. I'm talking relative aggression, not absolute aggression. E.g., going from risking 0.25% on a trade to risking 1%. Still mathematically conservative. Very conservative for a good trader.

I'm not sure why you are trying to state the obvious - that it would take a good trader, that RoR is a bit higher? Of course.
  • #31
  • Jun 4, 2010 3:26am Jun 4, 2010 3:26am
Quoting Intu
I believe the growth and profit comes from frequency. If we are traditionally risking say 1% of the account per trade with an R:R of 1:2 or maybe 1:3... you need trades....
QFT
  • #32
  • Jun 8, 2010 4:04am Jun 8, 2010 4:04am
What's QFT ?
  • #33
  • Jun 8, 2010 4:18am Jun 8, 2010 4:18am
Quoting Intensity
What's QFT ?
Quoted for truth (or, quite f%@king true).
  • #34
  • Jun 8, 2010 4:20am Jun 8, 2010 4:20am
Thanks ! I thought it was Quantitative Frequency Trading and that just didn't make sense
  • #35
  • Jun 8, 2010 4:23am Jun 8, 2010 4:23am
Quoting Intensity
Thanks ! I thought it was Quantitative Frequency Trading and that just didn't make sense
Hey, i could be wrong (CBW)
  • #36
  • Jun 8, 2010 4:26am Jun 8, 2010 4:26am
CBW could be Compounded Bearish Wage.
Ie, a great reason to start trading
  • #37
  • Last Post: Jul 12, 2015 2:26am Jul 12, 2015 2:26am
Quoting blacksun1
{quote} lol i read it wrong at first. i thought the original post said 4-8% a year. investors would kill babies to get 8% a month. most people expect 20% or less a year.
hahahaha... exactly, but somewhere I heard that cant remember where, monthly return 1-2% is possible may not be consistently but avg 1-2% is possible that means 12-24% year...umm... ok as you said so
It is the dust where you came from & it is the dust where you shall return
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