Annual returns

This is a discussion on Annual returns within the Home Trader forums, part of the Trading Career category; Hello everybody, What levels of annual returns do you expect if trading full time? I have been trading a small ...

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Old Apr 15, 2009, 5:31pm   #1
 
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Annual returns

Hello everybody,

What levels of annual returns do you expect if trading full time?

I have been trading a small forex account for around 18 months and gained around 75% in the first year and on the way for similar this year, this is with minimal drawdowns.

This is trading part time and risking a maximum of 1%/trade, most often less.

Based on these figures, would it be realistic to achieve say 100% year on year if trading full time? Is this realistic based on other people's experience?

Thanks a lot,

Nick
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Old Apr 16, 2009, 3:53am   #2
 
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Is 75% return calculated on top of your initial capital? If yes, then how much leverage did you use?
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Old Apr 16, 2009, 8:34am   #3
 
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njm42 started this thread Yes, - i.e. If on 01/01/07 I started with £10,000, on 01/01/08 I had £17,500.

I use 100:1 leverage, however I still risk max 1% of MY capital (in the above example = £100) per trade. By using the leverage I was able to put eg 50% in one year bonds, 30% in savings account and 20% to use as margin requirments.
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Old Apr 16, 2009, 5:01pm   #4
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Originally Posted by njm42 View Post
Hello everybody,

What levels of annual returns do you expect if trading full time?

Impossible question to answer. To many Variables to consider, because trading is a personal art (not science) and each individual has different goals in their trading. Some want to be huge Hedge fund managers, some just want to pay the bills. each to their own and Hopefully all are profitable.
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Old Apr 16, 2009, 6:54pm   #5
 
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njm42 started this thread
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Originally Posted by luckyd1976 View Post
Impossible question to answer. To many Variables to consider, because trading is a personal art (not science) and each individual has different goals in their trading. Some want to be huge Hedge fund managers, some just want to pay the bills. each to their own and Hopefully all are profitable.
Thank you Lucky.

I know that it is difficult to set an overarching level applicable fr everyone, but I was wondering whether other people's experiences trading full time were roughly in line with my records to date, or whether I was being overly optimistic/pessimistic.
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Old Apr 17, 2009, 4:19am   #6
 
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Seems that you hate risk very much. Only 1 bp stop loss on the notional?

If you are using 100x leverage, then ur P&L on notional is just 0.75% each year? Please correct me if I am wrong.
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Old Apr 17, 2009, 8:52am   #7
 
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Originally Posted by Nairbrian View Post
Seems that you hate risk very much. Only 1 bp stop loss on the notional?

If you are using 100x leverage, then ur P&L on notional is just 0.75% each year? Please correct me if I am wrong.

As I see it, I use the leverage simply as a means to lower my margin requirements.

My risk management is based on the size of MY account, i.e. I am willing to risk a maximum of 1% of my trading fund. By using leverage I can do this without having to use all of my capital on one single trade. Depending where my S/L is (in terms of pips away from buy/sell price) I can alter the size of positions I take.

From your point of view..... If I have £1 at 100x leverage then I have £100 to use, if I use 1% of this as my S/L per trade then my full account is lost on one incorrect trade!! This misunderstanding is one of the reasons why 98% of new traders lose!!
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Old Apr 17, 2009, 5:01pm   #8
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It seems reasonable to assume anyone consistently earning 75% annually over the long term would find themselves very close to the right edge of the curve. In other words, it is unusual ... even without small drawdowns.
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