is 100% return each year realistic?

[4xpipcounter]

I trade 28 forex pairs. I limit myself to them, because it is all I care to handle. I was going through the pairs today, and stopped on no. 18 after finding 3 trades--all winners. Opportunities abound ,and you don't have to look hard.
I mentioned before Soros and other billionaires are not and apples-to-apples comparison. They just throw their billions at the markets. Eventually it comes around for 100--200 pips and then they pull out. Their ROI is very low. The quantity of dollars they make on one trade is in the millions. Soros is not a trader. He's just a capitalist that knows how to use his money to get more of it.

No I said nothing about front running ( I wish I had that sort of info). You dont need to, here's why; the likes of Soros etc cant trade all in 1 go, there is no such thing as fill or kill for him/them. He/they have to do his/their business over time. If you can spot this early on, you are joining him/them, not front running. Whats more you can jump ship so much easier than he/they can. So all in all we are at such an advantage

And as for strike rates along with risk versus reward, yes, all achievable if you only select the cherries. But this is the part that causes the most problems.

 

[MrGecko]

FYI 4xpipcounter I have you on ignore

 

[4xpipcounter]

You did a bad job that time.

FYI 4xpipcounter I have you on ignore

 

[leonarda]

You did a bad job that time.

4xpip I think you obviously do very well for yourself...but you maybe making guys jealous that can't achieve your levels, so maybe not best to keep going on about how you do...unless you're willing to tell us all exactly how you do it please???

 

[D70]

May I throw one last tin at this thread?

Posters keep quoting how rubbish hedge funds / banks or any other type of professional fund is because they only make 20% a year at best.

And then you have the likes of the retail guys who say they make 20% a week and so on.

The difference is due to their accounting methodology.

A hedge fund manager has 1bn under manangement say and buys 200 mill of usd/yen cross.
A retail punter has 1,000 quid under management and buys 1gbp/pt of usd/yen cross.
The only way to compare your returns is for the retailer to calc his return by realising that he has bought 8538 quids worth (current spot). An amount he doesnt actually have in his account. But because of the vulgarity (or beauty) of spreadbetting is able to do this. A hedge fund or bank works out the return on his actual purchase. The retail punter just obliterates any comparison because he / she is massively leveraged. Assume the retailer makes 10 ticks which in this scenario will be 10 quid and tells you he has made 1%, he has actually in the real world made 0.117%......... bit different hey if you calc your retun properly????

Does someone see the glaring difference and now appreciate why 20% for a hedge fund wipes the floor with most retail punters..... and why 20% a year is a good return if you calc your returns correctly.

 

[LiamH]

May I throw one last tin at this thread?

Posters keep quoting how rubbish hedge funds / banks or any other type of professional fund is because they only make 20% a year at best.

And then you have the likes of the retail guys who say they make 20% a week and so on.

The difference is due to their accounting methodology.

A hedge fund manager has 1bn under manangement say and buys 200 mill of usd/yen cross.
A retail punter has 1,000 quid under management and buys 1gbp/pt of usd/yen cross.
The only way to compare your returns is for the retailer to calc his return by realising that he has bought 8538 quids worth (current spot). An amount he doesnt actually have in his account. But because of the vulgarity (or beauty) of spreadbetting is able to do this. A hedge fund or bank works out the return on his actual purchase. The retail punter just obliterates any comparison because he / she is massively leveraged. Assume the retailer makes 10 ticks which in this scenario will be 10 quid and tells you he has made 1%, he has actually in the real world made 0.117%......... bit different hey if you calc your retun properly????

Does someone see the glaring difference and now appreciate why 20% for a hedge fund wipes the floor with most retail punters..... and why 20% a year is a good return if you calc your returns correctly.

It's funny, I said exactly the same thing in not so many words about 10 pages ago. Leverage and the way you use it is what (theoretically, before my head is betten off) makes such silly returns possible.

If I use 25x leverage and make 100% I've only actually made 4% in terms of price movement... Not too impressive really.

I give up though.. I respect quite a few posters in this thread and between them all is pretty much an equal divide - Half say easy peasy, half say no way sunshine.

And to answer 4x, yes, in testing my strategy is making quite a bit more than 100% per year but until I have traded live for a year I'll not say anymore on the subject.

 

[oildaytrader]

May I throw one last tin at this thread?

Posters keep quoting how rubbish hedge funds / banks or any other type of professional fund is because they only make 20% a year at best.

And then you have the likes of the retail guys who say they make 20% a week and so on.

The difference is due to their accounting methodology.

A hedge fund manager has 1bn under manangement say and buys 200 mill of usd/yen cross.
A retail punter has 1,000 quid under management and buys 1gbp/pt of usd/yen cross.
The only way to compare your returns is for the retailer to calc his return by realising that he has bought 8538 quids worth (current spot). An amount he doesnt actually have in his account. But because of the vulgarity (or beauty) of spreadbetting is able to do this. A hedge fund or bank works out the return on his actual purchase. The retail punter just obliterates any comparison because he / she is massively leveraged. Assume the retailer makes 10 ticks which in this scenario will be 10 quid and tells you he has made 1%, he has actually in the real world made 0.117%......... bit different hey if you calc your retun properly????

Does someone see the glaring difference and now appreciate why 20% for a hedge fund wipes the floor with most retail punters..... and why 20% a year is a good return if you calc your returns correctly.

Aren't most of the returns of hedge funds achieved through leverage?

http://www.ustreas.gov/press/releases/reports/hedgfund.pdf

 

[wallstreetwarrior87]

May I throw one last tin at this thread?

Posters keep quoting how rubbish hedge funds / banks or any other type of professional fund is because they only make 20% a year at best.

And then you have the likes of the retail guys who say they make 20% a week and so on.

The difference is due to their accounting methodology.

A hedge fund manager has 1bn under manangement say and buys 200 mill of usd/yen cross.
A retail punter has 1,000 quid under management and buys 1gbp/pt of usd/yen cross.
The only way to compare your returns is for the retailer to calc his return by realising that he has bought 8538 quids worth (current spot). An amount he doesnt actually have in his account. But because of the vulgarity (or beauty) of spreadbetting is able to do this. A hedge fund or bank works out the return on his actual purchase. The retail punter just obliterates any comparison because he / she is massively leveraged. Assume the retailer makes 10 ticks which in this scenario will be 10 quid and tells you he has made 1%, he has actually in the real world made 0.117%......... bit different hey if you calc your retun properly????

Does someone see the glaring difference and now appreciate why 20% for a hedge fund wipes the floor with most retail punters..... and why 20% a year is a good return if you calc your returns correctly.

And that is what gives the retail trader such a great advantage, should they know what they are doing.

Why would anyone want to trade like the hedge fund when they dont need to?????

 

[leonarda]

It's funny, I said exactly the same thing in not so many words about 10 pages ago. Leverage and the way you use it is what (theoretically, before my head is betten off) makes such silly returns possible.

If I use 25x leverage and make 100% I've only actually made 4% in terms of price movement... Not too impressive really.

I give up though.. I respect quite a few posters in this thread and between them all is pretty much an equal divide - Half say easy peasy, half say no way sunshine.

And to answer 4x, yes, in testing my strategy is making quite a bit more than 100% per year but until I have traded live for a year I'll not say anymore on the subject.

yes exactly, leverage makes a huge difference, but it's all part of the equation which hedge funds use as well. If you can use 5x leverage to achieve 100% every year for the next 10 years, then I would say that's a fair 100% way to turn £1000 in £1m in 10 years. However, as has been said before using excessive leverage will break you as your drawdown's will be that much larger. So if you have a flat system which you think makes 20% with a drawdown of 5%, then it would possibly within your own reasoning to use 5x leverage to achieve 100% with 25% drawdowns, as long as you can psychologically handle it etc...

 

[SanMiguel]

The only way to compare your returns is for the retailer to calc his return by realising that he has bought 8538 quids worth (current spot). An amount he doesnt actually have in his account. But because of the vulgarity (or beauty) of spreadbetting is able to do this. A hedge fund or bank works out the return on his actual purchase. The retail punter just obliterates any comparison because he / she is massively leveraged. Assume the retailer makes 10 ticks which in this scenario will be 10 quid and tells you he has made 1%, he has actually in the real world made 0.117%......... bit different hey if you calc your retun properly????

Not quite...hedge funds do also use leverage.
But you're right, with leverage there wouldbe a maximum amount and remember someone has to take the other side of the trade.

 

[D70]

Not quite...hedge funds do also use leverage.
But you're right, with leverage there wouldbe a maximum amount and remember someone has to take the other side of the trade.

Again. People are misguided.

Hedge funds use leverage to increase their funds under management but the returns are still posted with the leverage included (I speak of the top funds, not 2 man cowboy shops).

Otherwise how would any of them be comparable.

Now show me a retail punter who makes more than 20% using 1 to 1.

 

[Black Swan]

I trade 28 forex pairs. I limit myself to them, because it is all I care to handle.

I wasn't logged in when I read this thread this morning, so I was able to see this comment...oh dear...

 

[LiamH]

I wasn't logged in when I read this thread this morning, so I was able to see this comment...oh dear...

Why is this an 'oh dear' moment? 28 pairs would be too much for me but each to their own right? Or am I missing something again?

 

[wallstreetwarrior87]

Why is everyone so concerned with leverage?

Its really very simple; if you know what you are doing leverage is to be embraced, but if you dont know what you are doing its the quickest way to the poor house.

Banks and institutions that purchase multi million dollar positions dont stump up all the cash, they all use leverage.

Its the size they deal in that forces their hand and dictates the strategies they use.

Also client risk tolerance is a massive part of the equation. All you need to be aware of is what these parties are doing and then get yourself positioned on the same side as them, and use the leverage available to you in relation to your own risk tolerance.

 

[leonarda]

Why is everyone so concerned with leverage?

Its really very simple; if you know what you are doing leverage is to be embraced, but if you dont know what you are doing its the quickest way to the poor house.

Banks and institutions that purchase multi million dollar positions dont stump up all the cash, they all use leverage.

Its the size they deal in that forces their hand and dictates the strategies they use.

Also client risk tolerance is a massive part of the equation. All you need to be aware of is what these parties are doing and then get yourself positioned on the same side as them, and use the leverage available to you in relation to your own risk tolerance.

yep agree.

anyway, i'm going to continue with my spread betting 5x leverage and hope I continue to bring in 50+% per year for the next 10 years... I'll let you know in 2020 !

 

[wallstreetwarrior87]

yep agree.

anyway, i'm going to continue with my spread betting 5x leverage and hope I continue to bring in 50+% per year for the next 10 years... I'll let you know in 2020 !

All the best, maybe even 55%+ on some good years

 

[Martinghoul]

Why is everyone so concerned with leverage?

Its really very simple; if you know what you are doing leverage is to be embraced, but if you dont know what you are doing its the quickest way to the poor house.

Surely that's obvious... Everyone is concerned about leverage because leverage is what kills you dead.

The issue is how do you (or anyone else, for that matter) truly know that you know what you're doing? History of finance is absolutely littered with stories of people who thought they knew until, one day, they found otherwise, to their detriment.

 

[oildaytrader]

Again. People are misguided.

Hedge funds use leverage to increase their funds under management but the returns are still posted with the leverage included (I speak of the top funds, not 2 man cowboy shops).

Otherwise how would any of them be comparable.

Now show me a retail punter who makes more than 20% using 1 to 1.

I only use leverage of 10 in my automated package, it gives me 45% ,but without leverage I would get 4.5%.

If there was no leverage , very few traders would make any money,there would be more than 95% failures.

 

[LiamH]

I only use leverage of 10 in my automated package, it gives me 45% ,but without leverage I would get 4.5%.

If there was no leverage , very few traders would make any money,there would be more than 95% failures.

This makes no sense... Surely if there was no leverage there would be far fewer people going broke? It would be pretty damn difficult to go broke trading 10p per pip on a £1K account...

 

[Jaydee]

This makes no sense... Surely if there was no leverage there would be far fewer people going broke? It would be pretty damn difficult to go broke trading 10p per pip on a £1K account...

Exactly, people would make less money, people would also lose less money.