What is a good trader's % annual return?

[simonfudge]

Hi all
I am a new member. I am thinking about opening a spread betting account. I am trying to decide if it is worth the risk of exposing my hard earned cash to the markets. What I would like to know is how much does a good trader expect to earn.
I am sure that successful traders keep detailed records and know exactly how much they have earned - so what is a good result?

 

[Axis of Evil]

Hi all
I am a new member. I am thinking about opening a spread betting account. I am trying to decide if it is worth the risk of exposing my hard earned cash to the markets. What I would like to know is how much does a good trader expect to earn.
I am sure that successful traders keep detailed records and know exactly how much they have earned - so what is a good result?

A good result is by any means ending up with more money then you initially began with. The best result is when you've materialized goals and objectives that you wanted to reach after a predetermined timespan. Now lets say you want to buy a brand new TV, setting you back about 2,000 quid. You start out with 10,000 pounds, then you need at least 20% profit to realizing your objective, buying that flat screen TV. If you rather would buy a car for 10,000 quid, you need at least 100% profit. Buying a house.. well, you'll need 3,000% profit.

Since you now know what your objective is and thus what YOU expect to earn, you can ponder what kind of investment scheme can deliver such a result within your predetermined timespan. The TV-set could be realized within 1, 6 or 12 months. The car maybe 1 or 2 years. The house, 5 to 10 years. You want to do some spread betting, which is fine but a very volatile type of investment, not really suited for beginners if you'd asked me. You can make money fast, but lose it even faster. This is due to all kinds of "problems" like "playing the house". Search this forum about Spread betting if you wanna know more about it.

The examples I suggested can all be met with less volatile investments schemes, taking in account a reasonable timespan. Look for instance at the small cap companies. Some will out do the benchmarks easily, but that's also on the downside... which you can profit going short. :smart:

Now I will tell you what you probably want to hear. You can make mountains of money. Profits of 100%, 200% or more are possible, just within a year.. maybe even half a year or less. I've heard stories of guys becoming millionaires within a year and you can join their club. Hell, get your friends in this as well and all become millionaires. You're going to space and beyond... (sarcastic mode: off) ..but you need to know what you are doing before that will ever happen. I'll even bet you that ones your have more knowledge and you'll understand the risks involved, specifically with spread betting, you'll see the value of this advice.

I hope I've helped you and saved you from going broke.

 

[rathcoole_exile]

@ 1% ROI you'll be doing better than most .......

 

[timsk]

I am sure that successful traders keep detailed records and know exactly how much they have earned - so what is a good result?

Hi Simon,
Welcome to T2W,
If you didn't trade the markets, what would you do with your capital? Use the answer to this question as the benchmark to equal or, hopefully, beat - should you decide to trade. So, for example, if you'd stick your money in a Building Society deposit account earning 5% interest, then this is 'first base' so to speak in terms of profit objectives. If you're a swing or position trader spending a few hours a week trading, then doing better than you would if you had you money on deposit will be a good initial result on which to build. Obviously, if you're about to embark on a full time career as a trader, then this is unlikely to be sufficient for your needs and a 5% annual return isn't an attractive return on your time. Once you start to factor time into the equation, obviously you then have to consider what you could reasonably expect to earn doing a 'normal' job and then this becomes your benchmark. Central to this is your starting capital. If your job pays you £50k and you've got an account of £1million with which to trade then, all things being equal, you may well reach your target. However, (and this is where so many new traders fall down) if you've only got £10k in your trading account, then you're aiming for a 500% return in order to earn your £50K - which isn't realistic. Yes, you will read about traders on T2W and elsewhere making returns of 1000% and more - and it does happen - but don't fall into the trap of thinking this is the norm and that it's easily achievable. It's not. Better to be conservative - very conservative - and succeed rather than be overly ambitious and fail.
1. Survive 6 months without blowing your account.
2. Aim to be at break even six months after that.
3. Equal or better building society deposit rates the following year.
4. Double building society deposit rates in year three.
5. Build on the above - you're on a roll!
It ain't sexy - but it's realistic. The statistics are imprecise, but most here will agree that well in excess of 50% of new traders never advance beyond point No. 2!
Good luck.
Tim.

 

[normbeef]

Hi all
I am a new member. I am thinking about opening a spread betting account. I am trying to decide if it is worth the risk of exposing my hard earned cash to the markets. What I would like to know is how much does a good trader expect to earn.
I am sure that successful traders keep detailed records and know exactly how much they have earned - so what is a good result?

If your new to trading... and you are spreadbetting.. then really this scale might help

Very good year 1% profit
good year - break even

Although I do not wish to deter you... there is a good reason why they put all those health risks on SB accounts... they are VERY risky if you are not sure what you are doing of...

best thing to do is open a trial account and see "look what you cudda won" perhaps you might be a bit upset if you made a killing... but then if you did.. and your are a "good trader" then you can bet real money...

 

[simonfudge]

Thanks Tim

Hi Simon,
Welcome to T2W,
If you didn't trade the markets, what would you do with your capital? Use the answer to this question as the benchmark to equal or, hopefully, beat - should you decide to trade. So, for example, if you'd stick your money in a Building Society deposit account earning 5% interest, then this is 'first base' so to speak in terms of profit objectives. If you're a swing or position trader spending a few hours a week trading, then doing better than you would if you had you money on deposit will be a good initial result on which to build. Obviously, if you're about to embark on a full time career as a trader, then this is unlikely to be sufficient for your needs and a 5% annual return isn't an attractive return on your time. Once you start to factor time into the equation, obviously you then have to consider what you could reasonably expect to earn doing a 'normal' job and then this becomes your benchmark. Central to this is your starting capital. If your job pays you £50k and you've got an account of £1million with which to trade then, all things being equal, you may well reach your target. However, (and this is where so many new traders fall down) if you've only got £10k in your trading account, then you're aiming for a 500% return in order to earn your £50K - which isn't realistic. Yes, you will read about traders on T2W and elsewhere making returns of 1000% and more - and it does happen - but don't fall into the trap of thinking this is the norm and that it's easily achievable. It's not. Better to be conservative - very conservative - and succeed rather than be overly ambitious and fail.
1. Survive 6 months without blowing your account.
2. Aim to be at break even six months after that.
3. Equal or better building society deposit rates the following year.
4. Double building society deposit rates in year three.
5. Build on the above - you're on a roll!
It ain't sexy - but it's realistic. The statistics are imprecise, but most here will agree that well in excess of 50% of new traders never advance beyond point No. 2!
Good luck.
Tim.

Thanks Tim

Your points are very well made, and I am grateful to you. To be honest, I had come to pretty much the same conclusions with my research so far.

I have traded before, back in the late 90's. I made many of the mistakes of a novice trader and I hope to avoid making the same type of errors again. I have recently come into some money and I have time to trade. I am interested in a spread betting account.

I would still like to know, and this is my question, how much per year does a good, experienced, diligent and savvy trader expect to earn on his account, on a % basis? What do you expect to earn? (Sorry, bit impolite).
Surely it must be more than what you can safely get in a deposit account or with a managed fund. Also it must, as you say, take account of the time you spend investing. Also, the return must reflect a premium for the risk while your money is exposed to the markets. (I am particularly worried about catastrophic market events).

I can see that it is impossible to generalise, as every trader may trade in a different style using differing strategies and with differing risk profiles. However, every good trader will know how much his return has been.
So what is considered a good return, and is that sort of return regularly and consistently realised by 'good' traders?

I would be grateful for your views.

Thanks again
Simon

 

[simonfudge]

Thank you

If your new to trading... and you are spreadbetting.. then really this scale might help

Very good year 1% profit
good year - break even

Although I do not wish to deter you... there is a good reason why they put all those health risks on SB accounts... they are VERY risky if you are not sure what you are doing of...

best thing to do is open a trial account and see "look what you cudda won" perhaps you might be a bit upset if you made a killing... but then if you did.. and your are a "good trader" then you can bet real money...

Thanks Normbeef
Simon

 

[simonfudge]

Thanks

A good result is by any means ending up with more money then you initially began with. The best result is when you've materialized goals and objectives that you wanted to reach after a predetermined timespan. Now lets say you want to buy a brand new TV, setting you back about 2,000 quid. You start out with 10,000 pounds, then you need at least 20% profit to realizing your objective, buying that flat screen TV. If you rather would buy a car for 10,000 quid, you need at least 100% profit. Buying a house.. well, you'll need 3,000% profit.

Since you now know what your objective is and thus what YOU expect to earn, you can ponder what kind of investment scheme can deliver such a result within your predetermined timespan. The TV-set could be realized within 1, 6 or 12 months. The car maybe 1 or 2 years. The house, 5 to 10 years. You want to do some spread betting, which is fine but a very volatile type of investment, not really suited for beginners if you'd asked me. You can make money fast, but lose it even faster. This is due to all kinds of "problems" like "playing the house". Search this forum about Spread betting if you wanna know more about it.

The examples I suggested can all be met with less volatile investments schemes, taking in account a reasonable timespan. Look for instance at the small cap companies. Some will out do the benchmarks easily, but that's also on the downside... which you can profit going short. :smart:

Now I will tell you what you probably want to hear. You can make mountains of money. Profits of 100%, 200% or more are possible, just within a year.. maybe even half a year or less. I've heard stories of guys becoming millionaires within a year and you can join their club. Hell, get your friends in this as well and all become millionaires. You're going to space and beyond... (sarcastic mode: off) ..but you need to know what you are doing before that will ever happen. I'll even bet you that ones your have more knowledge and you'll understand the risks involved, specifically with spread betting, you'll see the value of this advice.

I hope I've helped you and saved you from going broke.

Thanks Axis

 

[simonfudge]

Thank you

@ 1% ROI you'll be doing better than most .......

Thanks
Simon

 

[timsk]

I can see that it is impossible to generalise, as every trader may trade in a different style using differing strategies and with differing risk profiles. However, every good trader will know how much his return has been.
So what is considered a good return, and is that sort of return regularly and consistently realised by 'good' traders?

Hi Simon,
Very few traders 'publish' their results or, if they do, only for a relatively short period of time. Even then you rarely know what their capital base is to start with. There's an old trading joke that goes something like:
Q. How do you make a £1 million per annum trading?
A. Start with £5 million.
If you join Grey 1's 'Technical Trader' private forum (just PM him to join), he used to post broker screen shots of his results which showed he consistently made in excess of £1K every day and sometimes a great deal more. However, I don't recall what these returns represented as a percentage of his total capital base. However, to give you the answer you're seeking, as a broad generalization, really good day traders like him (Mr. Charts is another) might make 1-2% per day. Swing and position traders at the top of their game might make 5-10% per month. Please keep in mind that these figures are NOT based on solid statistical evidence - as none exists that I know of. They are just impressions gained over the years. What's really important is that they are unimportant and completely meaningless and useless to you anyway (or anyone else). Under no circumstances should someone embark on trading with the mindset of 'I'm a day trader, ipso facto, I'll make 1-2% return on my capital each day'. That's a recipe for disaster and, besides, you might do a lot better than that! Doubtless there are traders on these very boards who wouldn't bother getting out of bed for returns like these!
There was a show on the box recently in which Trinny & Susannah examined, weighed, measured and tested thousands of people up and down the land to find the average man and women. Eventually, the boffins crunched all the numbers, and the stat's for the average british man and women were revealed. Tellingly, out of the thousands of people who participated in the programme, there wasn't a single man or single woman with a good match to the statistical average. Trading returns are the same. Even if there were statistical averages for all types of trader, the chances of your results matching them is virtually nil.
Tim.

 

[Splitlink]

Maybe trading's an old man's game! The philosophy is different. Mrs Split has no truck for what goes up or down when she wants to go out.

 

[Crap Buddist]

Spank me with your rhythm stick, spank me slowly, spank me quick.. SPANK Meeee.. !...

A lot of people will attempt to compete being under knowledged and over leveraged! That is a recipe for a very good spanking. Some people will learn from being spanked. Some people liked to be spanked and will gladly pay for it. Some people ,having been spanked will go away with a sore behind, never to return.

Who has seen the TV Ads. "Wouldn't you rather use a little to make a lot ?" What they mean is , here have some more leverage. We will spank you. Spankers. They spank people. In the spanking biz. they are good. They get paid to spank.

How do we feel with spanking ? I'm a big spanker how bout you ? Are you going to Spank or be spanked? Its ours for the chosing.

Get paid to spank . Spank what you see or be spanked. Joe Ross taught me that but its my slogan, so clear off don't try and upsell people a spanking master course with that one Joe. Although if you do, er ,can I watch ?

 

[simonfudge]

Thanks again Tim

Hi Simon,
Very few traders 'publish' their results or, if they do, only for a relatively short period of time. Even then you rarely know what their capital base is to start with. There's an old trading joke that goes something like:
Q. How do you make a £1 million per annum trading?
A. Start with £5 million.
If you join Grey 1's 'Technical Trader' private forum (just PM him to join), he used to post broker screen shots of his results which showed he consistently made in excess of £1K every day and sometimes a great deal more. However, I don't recall what these returns represented as a percentage of his total capital base. However, to give you the answer you're seeking, as a broad generalization, really good day traders like him (Mr. Charts is another) might make 1-2% per day. Swing and position traders at the top of their game might make 5-10% per month. Please keep in mind that these figures are NOT based on solid statistical evidence - as none exists that I know of. They are just impressions gained over the years. What's really important is that they are unimportant and completely meaningless and useless to you anyway (or anyone else). Under no circumstances should someone embark on trading with the mindset of 'I'm a day trader, ipso facto, I'll make 1-2% return on my capital each day'. That's a recipe for disaster and, besides, you might do a lot better than that! Doubtless there are traders on these very boards who wouldn't bother getting out of bed for returns like these!
There was a show on the box recently in which Trinny & Susannah examined, weighed, measured and tested thousands of people up and down the land to find the average man and women. Eventually, the boffins crunched all the numbers, and the stat's for the average british man and women were revealed. Tellingly, out of the thousands of people who participated in the programme, there wasn't a single man or single woman with a good match to the statistical average. Trading returns are the same. Even if there were statistical averages for all types of trader, the chances of your results matching them is virtually nil.
Tim.

Hi Tim

Thank you again for the reply.
I realise that I need to spend some time educating myself and trying to gain more experience of trading before risking large amounts of capital in a SB account. This will of course involve time, effort and some expenditure.
Before taking the plunge I felt it might be a good idea to try to gauge what the potential returns might possibly be. I have seen the hype of the sellers of trading systems but of course it is just that, hype. (I am not interested in ready made trading systems......unless they work ! ).

It seems like there are many people who appear to be trading successfully. I guess they would not bother to risk their capital if it was not worth the risk. Therefore, it seems to me, the people who trade well probably do better with their money than putting it in a managed fund. I am sure that the majority of traders have asked the same questions that I am asking myself now and have decided that it is still worth the time, effort and financial risk.

In an ideal world it would be comforting to be able to do some sort of business plan with a cash flow forecast. I suppose I can still do my business plan and incorporate the goals you suggested. I was never under the delusion that I would not have to submit myself to a lengthy period of training and education.

I am most grateful for your advice, many thanks
Simon

 

[timsk]

In an ideal world it would be comforting to be able to do some sort of business plan with a cash flow forecast. I suppose I can still do my business plan and incorporate the goals you suggested.

Hi Simon,
Once you have a trading plan in place you can paper trade it to gauge your own level of success. At some point you'll go live and the results will speak for themselves. It's the daily, weekly, monthly and annual return that you are able to generate that matters and is meaningful, not mine or anyone elses. Click on the icon under my name if you're wanting a few pointers on how to produce a trading plan. I look forward to hearing that you're caning the market and raking in 10% every day - so long as it's not at my expense that is! Good luck.
Tim.

 

[ofurbaldur]

Good return for 1/2 day trader using leverage would be 10-15% per month.

Position trader using automatic breakout trading system 25-40% per year

Baldur

 

[Hoggums]

Good return for 1/2 day trader using leverage would be 10-15% per month.

Position trader using automatic breakout trading system 25-40% per year

Baldur

If you manage to break even in your first year, you are doing well - but more importantly you are getting valuable experience which will hopefully make you more successful in the future. Trading is a long term venture that will take time to master.

I think it's irresponsible to tell newbies that you can make 10-15% per month when in fact the vast majority (and I guess > 98%) will never achieve that.

So simon - do you regard yourself (truthfully) as exceptional, or just an average or above average Joe - because if you are not exceptional then don't expect to make huge amounts of money - expect to probably lose some at first as you learn the ropes.

By the tone of your original post it sounds like you are not prepared to lose any of your cash so I would recommend you take out an ISA and invest in a unit trust.

 

[gooseman]

as a local on screens it took me about 6 moths to break even and after that I was returning about 35-40% per month profit (before tax and after costs). that was conservative trading in my opinion.

 

[simonfudge]

If you manage to break even in your first year, you are doing well - but more importantly you are getting valuable experience which will hopefully make you more successful in the future. Trading is a long term venture that will take time to master.

I think it's irresponsible to tell newbies that you can make 10-15% per month when in fact the vast majority (and I guess > 98%) will never achieve that.

So simon - do you regard yourself (truthfully) as exceptional, or just an average or above average Joe - because if you are not exceptional then don't expect to make huge amounts of money - expect to probably lose some at first as you learn the ropes.

By the tone of your original post it sounds like you are not prepared to lose any of your cash so I would recommend you take out an ISA and invest in a unit trust.

Thanks

 

[simonfudge]

as a local on screens it took me about 6 moths to break even and after that I was returning about 35-40% per month profit (before tax and after costs). that was conservative trading in my opinion.

Do you return over 500% per year on your initial capital?
Or is it compound and even greater? Thats seems incredible. You sure of the sums?

 

[TheBramble]

Simon, I think Gooseman knows how to do his sums...