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Good returns realistic by trading with higher time frames?

  • #21
  • Jul 21, 2011 3:58pm Jul 21, 2011 3:58pm
The only thing I can intelligently add is that the period between Day Trading and Position Trading, i.e. holding a position for just few days, leaves your brand-new position, based on the medium-term trend or reversal points, subject to unexpected events, market whims and trying to squeeze between all those news announcements. If you're Day Trading and it suddenly moves against you, you can make a quick adjustment; and if you're position trading, in most cases a 100-pip sell-off or rally won't affect your overall trade.

In other words, not knowing your time horizon, I suggest going with the big fundamental flow of things, versus trying to catch those Monday-Wednesday rallies and sell-offs.

And yes, it's possible to have big returns. Fund managers have trouble consistently doing better than 20% annually, but that's without leverage and without clients adding to their positions at the right time. Starting with a small position and adding by buying dips/selling rallies, you can end up with a fairly large position size by the time you close.
  • #22
  • Jul 21, 2011 4:01pm Jul 21, 2011 4:01pm
I think it depends on your definitions of things: 10% return on the margin required for the trade (what is actually invested) is what most people actually mean, rather than 10% or what you have in your account. You can have $100K in your account but only trade with roughly $15K (that will get you about 5 full lots of EUR/JPY at 50:1)....so to make 10% of the $15K, or $1500 per month, is very easy. Depending on your method, you may make that daily. But to make returns like that, you need enough in your account for the bad days and you need to be willing to trade more aggresively (higher risk and no micro-lots).

One thing to remember about daily charts is that it may do exactly what you expect, but not before going against you 50+ pips. You have to be able to withstand swings like that, and that requires enough capital in your account. Non-US residents have an advantage there because they can still trade the higher leverages, so it takes less money in their accounts to take the same trades.
  • #23
  • Jul 21, 2011 4:30pm Jul 21, 2011 4:30pm
Quoting Custos
It all depends, can you pull off 30 % real return CONSISTENTLY? Cause most funds can't, and most funds will at one point blow up when there is a new crisis.
If I know that my method is recession proof, then I would rather trade for myself, than investing in a fund.

Returns mean nothing, if they are not consistent.
ok this is a hypothetical scenario, but...

I would assume if you are a scalper trading eight hours a day on various pairs on m15, the number of trading opportunities within a given year would be very numerous. Some wins, some losses.

Perhaps some of these setups were AAA+ in your face, enter and take the pips, golden opportunities, perhaps the number of such opportunities was 40, 35 of which were wins. Say you only traded these opportunities and entered with a 1:1 rr and aiming for/risking one percent each time.

Voila, 30 percent annual return. Consistently? Why not? Don't you think that in any given year, across several pairs, on m15 there won't be more than 30 golden crystal clear trading opportunities?

I know, I know "but what about the loss trades, everything looks good on paper, what about discipline, what about..." yeah I know, but in principle I have a hard time understanding why a forex trader should have such a hard time making at least 30 percent per year *CONSISTENTLY*.
Stock mutual funds have a prospectus to follow, they aren't allowed to daytrade. I guess hedge funds would be a slightly better comparison, but stock mutual funds? C'mon
  • #24
  • Jul 21, 2011 4:42pm Jul 21, 2011 4:42pm
Yeah and if you start with ten k and manage to average 15% annually in the stock market you could make 43 million. It would only take, ehm, 60 years... But you know, people are living much longer nowadays...
point being what exactly?

15%??????? That's a 43 million dollar return over time!!!!!!!!!!!!!!! Good luck with THAT!!!!

Quoting cuchuflito
I would like to achieve two things simultaneously:
A pretty decent return of ten percent consistently per month with low risk.

Brother
10% monthly is a "billion dollar" return overtime!

Start with 10000..
10% monthly componunded triples your money in a year (aprox.)
1Year 30000
2 year 90000
270000
810000
2,430000
7290000
7 year 21800000

Yes 10% monthly is "a pretty decent return", it would make you over 20 million in 7 years, starting with some humble 10000 bucks.
Wish you the best of success..!!!!!!!!!!!!!!!!!!!!!...
  • #25
  • Jul 21, 2011 4:57pm Jul 21, 2011 4:57pm
Quoting dice action
yeah I know, but in principle I have a hard time understanding why a forex trader should have such a hard time making at least 30 percent per year *CONSISTENTLY*.
well, cause most systems have lucky streaks. Some streaks end after 10 trades, some after 100 and some after 1000 trades. Take the turtle system, it worked for decades, and then stopped working. Was a very long lucky streak.
There are only few systems that work over the long-term or at least a very long time. (at least in my opinion and from my experience)

And unfortunately the ones that work over the long-term generally don't create insane returns. There is always a trade-off, no free lunch.
  • #26
  • Jul 21, 2011 5:10pm Jul 21, 2011 5:10pm
Would you even need ONE SPECIFIC SYSTEM, to spot 30 great trading opportunities within a given year?
  • #27
  • Jul 21, 2011 5:23pm Jul 21, 2011 5:23pm
Quoting dice action
Would you even need ONE SPECIFIC SYSTEM, to spot 30 great trading opportunities within a given year?
what is a great trading opportunity? That is the question. Is it when rsi is at 80 and all ma's are pointing down? Or is it when you got a pin bar at an S/R level?

We always hear of great AAA opportunities, but who classified them? How do you really know that it is a good opportunity? Maybe that opportunity only has a 50% chance of succeeding.
Thing is, most traders don't even bother to test the real probabilities of setups. That is why they ultimately fail. Cause many good & logical ideas don't work consistently in the markets, but they are too lazy to test out what the real probabilities are.

The answer is: research, research and research.
A lot of work.
  • #28
  • Jul 21, 2011 5:48pm Jul 21, 2011 5:48pm
Quoting Custos
what is a great trading opportunity?
One that requires qualitative analysis of market conditions. One that you feel you HAVE to risk more because otherwise you are leaving money on the table.

Take a look at George Soros' famous short. What could have compelled to him to take a multibillion dollar bet on SINGLE trade? He didn't even hedge it.

Quote
On Monday, October 26, 1992, The Times quoted Soros as saying: "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell."
Cautiously optimistic. . .
  • #29
  • Jul 21, 2011 5:50pm Jul 21, 2011 5:50pm
Quoting dice action
I never said I expected mutual funds to return 30 percent per year on average. I said I expected forex to return a lot more than 30 percent per year.
There are some nice mutual funds out there that have good average annual returns (geometric mean).
There's nothing stopping anyone from making more than 30% a year trading FX. Except skill, and/or luck, of course.

Quote
Stock mutual funds have a prospectus to follow, they aren't allowed to daytrade. I guess hedge funds would be a slightly better comparison, but stock mutual funds? C'mon...

Earning 30% a year in any asset class is way, way more difficult than you are making it sound, though. Look at the performance of hedge funds, managed futures funds, etc. Most can't beat the S&P in any given year. The fact of the matter is that even amongst professionals, trading to beat the market on a risk adjusted basis is incredibly difficult.
  • #30
  • Jul 21, 2011 6:17pm Jul 21, 2011 6:17pm
Quoting Custos
We always hear of great AAA opportunities, but who classified them?
If Moody's says they are AAA rated, doesn't that mean they are??
  • #31
  • Jul 21, 2011 8:44pm Jul 21, 2011 8:44pm
Quoting smittens4212
There's nothing stopping anyone from making more than 30% a year trading FX. Except skill, and/or luck, of course.



Earning 30% a year in any asset class is way, way more difficult than you are making it sound, though. Look at the performance of hedge funds, managed futures funds, etc. Most can't beat the S&P in any given year. The fact of the matter is that even amongst professionals, trading to beat the market on a risk adjusted basis is incredibly difficult.
I thought I read on ff that professionals earn that much only because they're limited to 1:1, that they'd earn far more than retail if given the leverage.
  • #32
  • Jul 21, 2011 9:09pm Jul 21, 2011 9:09pm
Quoting dice action
Thank you all for your replies...

I would much prefer to set aside 10k and compound it to 1.9m in 15 years, rather than making 42% on 100k and spending it every year...

So we got NYWallstreet saying it's possible, and Custos and Medran saying it's impossible with low risk. Who is right? Or are they all wrong?
Dice Action my honest advice is try and not focus on the percentage gains or how much you can make. Really Focus on your trading strategy and method and money management. having the right and simple tools and the right psychological make up is the key to making those percentage gains. By you saying you want to trade on the higher time frames IMO your on the right track already. I gave an example of my trading method on page one of this thread, i can show you another example if you'd like of simple effective trading analysis.
"The market doesn't beat them, they beat themselves" - J. Livermore
  • #33
  • Jul 21, 2011 9:26pm Jul 21, 2011 9:26pm
For almost two years I've been average a bit less than 9% per month, so yes it is possible. My max drawdown was almost 40%. (both figures are percentage of total account balance). My usually drawdown is about 20%.

That's a lot of risk, a lot more than most people are willing to take.

I add to my winners, and by the time I close my leverage is usually about 12x. That gives me an unlevered return of about 0.75% per month, compounded to 9.4% per year since my trades usually close within a month. I think I'm brilliant, but a pro could make twice as much easily with access to leverage.

I trade the daily chart, but I'll drill down to hourly when I get ready to close. I've had back to back losing months (I think, I need to check again. Back to back really poor performance in any case). I get obsessive about checking the market on my phone app, but I only make a trade (place orders or close) a few times a week.
  • #34
  • Edited 10:29pm Jul 21, 2011 10:01pm | Edited 10:29pm
Quoting dr_zeus
For almost two years I've been average a bit less than 9% per month, so yes it is possible. My max drawdown was almost 40%. (both figures are percentage of total account balance). My usually drawdown is about 20%.

That's a lot of risk, a lot more than most people are willing to take.

I add to my winners, and by the time I close my leverage is usually about 12x. That gives me an unlevered return of about 0.75% per month, compounded to 9.4% per year since my trades usually close within a month. I think I'm brilliant, but a pro could make twice...
I don't get it, first you write you made 9% per month, next paragraph it's 9% per year.
Were you able to make almost nine percent gain ON YOUR ACCOUNT every MONTH for two years?
If so, your money should be at least 6-folded by now (600 percent)
Please clarify
  • #35
  • Jul 21, 2011 10:18pm Jul 21, 2011 10:18pm
Quoting dice action
I don't get it, first you write you made 9% per month, next paragraph it's 9% per year.
Were you able to make almost nine percent gain ON YOUR ACCOUNT every MONTH for two years?
If so, your money should be at least 60-folded by now (6000 percent)
Please clarify
I've made 9% per month on my account on a levered basis.

Translated to an unlevered basis (as mutual funds must use) it's 9.4% per year.

9% per month is 7.9x return in two years, not 60x. First year was demo, second year was real money.

Let me know if that doesn't make my statement clear.
  • #36
  • Jul 21, 2011 10:28pm Jul 21, 2011 10:28pm
Quoting dr_zeus
I've made 9% per month on my account on a levered basis.

Translated to an unlevered basis (as mutual funds must use) it's 9.4% per year.

9% per month is 7.9x return in two years, not 60x. First year was demo, second year was real money.

Let me know if that doesn't make my statement clear.
YOU're right, I missed a zero. I meant six-fold.

What does "unlevered" mean? You mean unleveraged?

To me, any reference to anything other than returns ON YOUR CAPITAL, is misleading and meaningless. My opinion.

My question was if it was feasible to make on average 10% a month. That is about 200% a year, not 9, and that is the end of that.
I would much rather make 9 percent by just investing in stock funds, than spend a whole year trading for no zero extra return, not saying stock funds ALWAYS return that, but you get the idea.
  • #37
  • Jul 21, 2011 10:35pm Jul 21, 2011 10:35pm
Quoting NYWallSt
Dice Action my honest advice is try and not focus on the percentage gains or how much you can make. Really Focus on your trading strategy and method and money management. having the right and simple tools and the right psychological make up is the key to making those percentage gains. By you saying you want to trade on the higher time frames IMO your on the right track already. I gave an example of my trading method on page one of this thread, i can show you another example if you'd like of simple effective trading analysis.
I thought your charts were groovy don't wait for this guy post some more
  • #38
  • Jul 21, 2011 10:41pm Jul 21, 2011 10:41pm
Quoting dice action
My question was if it was feasible to make on average 10% a month.
No it is not feasible for you to make these returns. It isn't impossible years from now, however it is not likely.

Of course you like the idea of making insane amounts of money, compound interest is a tantalizing notion.

What is feasible is that if you invest your money for the long haul and you do it right (beyond the scope of this post), you will probably not blow any accounts
  • #39
  • Jul 21, 2011 10:49pm Jul 21, 2011 10:49pm
Quoting frankkn
I thought your charts were groovy don't wait for this guy post some more
Charts are welcome.
  • #40
  • Jul 21, 2011 11:10pm Jul 21, 2011 11:10pm
Okay here are two examples of how i trade using a combination of chart patterns and Pivot points.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Example 1.png Size: 44 KB
Click to Enlarge Name: Example 2.png Size: 29 KB
"The market doesn't beat them, they beat themselves" - J. Livermore
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