How Much Can I Make? (Another Thread)

[Shanghai]

So the regular threads saying is it possible to double my money in a week / month and then various posters saying they wouldn't get out of bed for less than couple of grand a day etc. The one thing these seemingly high performing strategies have in common is daft money management.

So paring it down in terms of gain per month based on percentage of account risked per trade (R) what would you say was a sensible target per month?

So take for example a 10,000 account. Risking 1% per trade (100) and making 1,000 per month would mean that you are making 10R per month. Ignores drawdown of course but its better than just using a percentage gain per month

 

[Hotch]

well, it's just expectancy*frequency.

If you think you can trade with targets 3 times your losses, 3 times a day, then that's 1R a day. Done.

It is possible to average 10R a week. Most go more like -2R a week.

I do however agree, returns in terms of R are generally much better to look at than pips/$/%/etc.

 

[Shanghai]

It is possible to average 10R a week. Most go more like -2R a week.

Sounds about right. I average 4-5R per month. Doesn't sound a lot but it compounds up nicely.

 

[timsk]

Shanghai,
Hopefully, this is a pretty comprehensive answer to this oft' asked question:
Realistically, How much Money can I Expect to Make?
If there's anything missing - or not clear - please let me know.

Tim.

 

[Shanghai]

Shanghai,
Hopefully, this is a pretty comprehensive answer to this oft' asked question:
Realistically, How much Money can I Expect to Make?
If there's anything missing - or not clear - please let me know.

Tim.

I guess I should have worded the thread better. My question was meant to find out what people think they can make and / or what they are making in term of R or risk capital employed per trade. The thread you linked to generally talks in terms of percentage gains to your account. Trying to cut through the misinformation that comes from these threads that claim a high percentage gain per month.

It won't change the way that I trade though. After all these years I'm too stuck in my ways and am happy with my returns.

 

[meanreversion]

Shanghai, everything you say is commendably sensible and logical, which is why this thread will die very quickly.

 

[Shanghai]

Shanghai, everything you say is commendably sensible and logical, which is why this thread will die very quickly.

Cynical old git (completely true of course...)

Its just that when people see a thread such as "I make 100% a month" they want to know which combination of moving averages / stochastics etc to use.

I have said before that I make 30-60% per year on my account but I risk 1% per trade. If I up that to 10% per trade, which some daft bugger was doing n here recently, then my gains would in theory be 300-600% per year. If I claimed that it would have people pm'ing me in droves asking about my strategy. However that would give my the likelihood of a 100% drawdown.

It ain't about the strategy.....

But of course meanreversion and a few others know that already.

 

[meanreversion]

The concept of R, expectancy and expectinuity (sp?) are all outlined thoroughly in the Van Tharp book, "Trade your way to financial freedom". It's one of the books I always recommend, but as someone else pointed out on a different thread, probably the reason most traders fail is because they are simply lazy, i.e. they can't be bothered to read books when punting around is so much more fun.

The main metric I look at is CAGR/MDD, with the aim of achieving something higher than 1. However, at some point the win rate does come into it, because this is the aspect which will determine the likelihood of sticking to the system, whatever it happens to be.

But b0ll0cks to all that, how do I double my money in a week?????????

 

[trendie]

The concept of R, expectancy and expectinuity (sp?) are all outlined thoroughly in the Van Tharp book, "Trade your way to financial freedom". It's one of the books I always recommend, but as someone else pointed out on a different thread, probably the reason most traders fail is because they are simply lazy, i.e. they can't be bothered to read books when punting around is so much more fun.

The main metric I look at is CAGR/MDD, with the aim of achieving something higher than 1. However, at some point the win rate does come into it, because this is the aspect which will determine the likelihood of sticking to the system, whatever it happens to be.

But b0ll0cks to all that, how do I double my money in a week?????????

double your money??
1:get some real money.
2: get a photocopier.

http://www.thisisstaffordshire.co.u...y-copiers/article-2200770-detail/article.html

PS: good stuff about identifying growth as function of risk. ie, gains as function of R.
always been meaning to read up on CAGR and MDD. but too lazy to read!

 

[timsk]

I guess I should have worded the thread better. My question was meant to find out what people think they can make and / or what they are making in term of R or risk capital employed per trade. The thread you linked to generally talks in terms of percentage gains to your account. Trying to cut through the misinformation that comes from these threads that claim a high percentage gain per month.

It won't change the way that I trade though. After all these years I'm too stuck in my ways and am happy with my returns.

Hi Shanghai,
Fair play to you - and I hope meanreversion is wrong and the thread gains some traction! If it does - and you get some good replies, I'll add this thread to USEFUL LINKS in post #3 of the FAQ.
Tim.

 

[timsk]

The main metric I look at is CAGR/MDD, with the aim of achieving something higher than 1.

Hi mr,
For the thickies at the back of the class - care to elaborate - seeing as I can't be @rsed to do a Google search?

Actually, I can, but it's nice to to have all this stuff 'in house' under the T2W roof so to speak!

 

[meanreversion]

Sorry, compound annual growth rate divided by maximum drawdown.

In other words, you're looking to make x% a year and in order to do so you are prepared to tolerate a drawdown of y%. The higher the ratio of x/y, the better.

(PS I told you this thread would die fairly quickly!!)

 

[meanreversion]

Sounds about right. I average 4-5R per month. Doesn't sound a lot but it compounds up nicely.

"Shanghai" is a much cooler username than "meanreversion". If I was "mean_reversion" would that look better? (Or maybe just call myself Mr White?)

 

[wackypete2]

The was some chap (a member here, maybe, I don't remember exactly) who claimed he traded using the maximum amount of leverage he could on each trade leaving room for about a 10-12 pip loss. At that loss point his broker, and most brokers, automatically closed his positions. In effect his broker was acting as his stop loss. Certainly trading this way one could in theory make a super- killing if you knew how to trade. I wish I knew what happened to him, but I can take a lucky guess.

Surely this sounds plausible enough at first but during news events or fast moving markets brokers won't guarantee stop levels.

Just to be clear, i DO NOT RECOMMEND THIS TYPE OF TRADING. Just showing that it is possible to double your money or better every day...err..for a while anyway, until the inevitable BOOM.

Peter

 

[meanreversion]

I think the fact this thread is fizzling out is simply testament to human nature.

Fat people don't want to be told to eat less and exercise more, they want to hear about a different way of combining carbs and fats which will help with weight loss.

Losing weight requires effort.

Making money at trading requires effort.

 

[meanreversion]

(Look, I really am trying to keep the thread alive!!!)

 

[MrGecko]

"Shanghai" is a much cooler username than "meanreversion". If I was "mean_reversion" would that look better? (Or maybe just call myself Mr White?)

It has puzzled me that your username is "meanreversion" when you claim to be a "trend follower".

just FYI.

 

[meanreversion]

It has puzzled me that your username is "meanreversion" when you claim to be a "trend follower".

just FYI.

What I mean is that the markets tend to revert to trends.

Nah, it was more a reflection of my belief that in FX there tend to exist great big cycles which revert to the mean, e.g. GBP/USD goes between 1 and 2 and the mean is 1.5, EUR/USD is between 0.8 and 1.6 etc.

Come on then, Mr Gecko, do you like lizards?

 

[Black Swan]

PS I told you this thread would die fairly quickly!!]QUOTE]

It's T2W law...

 

[MrGecko]

Come on then, Mr Gecko, do you like lizards?

Nope - turns out in a moment of (scrumpy jack instigated) inspiration I spelled "Gekko" wrong and am stuck with a sh!t username as a consequence.

For the record I would like to change it to "Whooooooaaaa booodyy -- foorrmmed...... boddy forrmmmeedd foorrrr youuuuuuuuuuuuu".