donaldduke
Experienced member
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Day trading offers the highest potential returns for smaller accounts (below 10million).
This is because you are risking money more often.
You might be able to make >100% yearly returns and never have a draw down >20% of your account. That kind of return/drawdown ratio is not normally possible with position trading. 2:1 and 1:1 is supposed to be more typical with position trading systems. So if you want to make 50% a year as a position trader, expect draw downs in the 25% to 50% range.
Disadvantages are that day trading is psychologically intense, incurs high transaction costs, and is not as scalable as the longer forms of trading, so you cant keep on making >100% returns for ever..
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In volatile markets such as the forex markets,how is it possible to have such a high return/drawdown ratio? Usually after confirmation of an entry,nearly half of the move is gone,and with a well-positioned stop-loss,it's very difficult to get a ratio greater than 2:1
if you are serious about becoming a professional day trader and want to learn from expert which I recommend as small stratagies will change and you may lose out in the future. Think about it if you trade the firms captial which will be much larger and could lead to millions and you get a cut of that even if its 20-30% some firms offer you could retire within a few years.
the hare
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Because the return and drawdown metrics are not a function of reward:risk ratio.
100% per annum with 20% drawdown is achievable.
