TOTW What is a reasonable annualised rate of return for trading?

Forexmospherian

Legendary member
39,928 3,301
Assuming you are profitable in the first place, this is the most sensible answer I can see here.


I would have to agree with the first part of your comment - ie assuming your profitable in the first place - and we all know 80 -90% re not even going to be profitable for one year - never mind - many years

But surely we are not talking Institutional / Commercial trading rules and results - using multi million dollar capital accounts we are talking retail trading - with most capital accounts under $10k - not even $50 or $100+k needed for full time retail trading .

Then its a different ballgame

Take a look at these - LIVE trading results over last 3 years - audited by a top accountancy company as well

http://www.ironforex.com/en/promotions-contest/past-live-competitions/2012

Ok these traders are taking big risks and using leverage - and of course - are good - so they will not do 1000 - 5000% every few months - they will drop down to 20 -50% per month - playing safe with proper retail MM - not ultra safe commercial MM -

Now there's over 20 top FX traders here with results with real Live money here who make over 1000% ror in a few months

So if they stopped and did no more trading that year - then they have made over 1000% ror per annum - some even 2000 -3000% on live money.

Get real 5% - yes that a stage for the 10 -20% of traders who can even make a profit - but then real top retail traders - 5% per annum is just an insult - or joke - either way

Regards

F
 

metrader

Experienced member
1,147 141
Charlie managed 450 - 500% so far (10k to 100k in 2 years challenge)


PS He was in that BBC programme about traders
 

Jack o'Clubs

Experienced member
1,554 342
Ok these traders are taking big risks and using leverage - and of course - are good -F

Or lucky. Give a similar number of monkeys typewriters and one will come up with the Complete Works of Shakespeare.

I see ironfx offers up to 500:1 leverage, I'm not surprised the winner of a massive competition has a 3000%+ return over the 3 months it is live. What's interesting when you look down the rankings list is how quickly the returns tail off, considering the leverage available. A 100% return on a 500:1 geared account doesn't sound too impressive to me. Considerably less than a 5% ungeared real return in fact...
 

drtro

Active member
216 21
Or lucky. Give a similar number of monkeys typewriters and one will come up with the Complete Works of Shakespeare.

I see ironfx offers up to 500:1 leverage, I'm not surprised the winner of a massive competition has a 3000%+ return over the 3 months it is live. What's interesting when you look down the rankings list is how quickly the returns tail off, considering the leverage available. A 100% return on a 500:1 geared account doesn't sound too impressive to me. Considerably less than a 5% ungeared real return in fact...

Is that legal? I've seen people get burned in a week on prop firms giving even 10:1 leverage.
 

TwinToWin

Active member
247 29
This is certainly a sensitive subject... so long as the bills get paid and there's cash to play I'll be happy.

I expect the stress to be proportional to the big %'s and will demand a skill level beyond my grasp. So for me as a limited time trader I'm working toward 50% as a good result, while still working the day job.
 

Forexmospherian

Legendary member
39,928 3,301
Or lucky. Give a similar number of monkeys typewriters and one will come up with the Complete Works of Shakespeare.

I see ironfx offers up to 500:1 leverage, I'm not surprised the winner of a massive competition has a 3000%+ return over the 3 months it is live. What's interesting when you look down the rankings list is how quickly the returns tail off, considering the leverage available. A 100% return on a 500:1 geared account doesn't sound too impressive to me. Considerably less than a 5% ungeared real return in fact...

Is that legal? I've seen people get burned in a week on prop firms giving even 10:1 leverage.


We are talking RETAIL TRADING

No retail Fx intraday trader is going to trade spot FX without leverage - unless he has a multi million dollar account - and then I would not call him retail

I certainly would not recommend 1000:1 or 500:1 on any account over $1k - unless you really know what you are doing - but 50 and 100:1 are perfectly acceptable - even for a $100k account - I even used 200:1 for 9 months on a $150k account - but there again - I know what I am doing with 1% stake size and 5 -7 pip stops

If you are saying well on totally ungeared returns - then to me its like saying to a retail trader - use a spreadbetting account and also pay 25% or 40% tax as well on your winnings. Now why would you do that ?

Surely we are comparing apples with oranges comparing commercial / institutional ror's with retail trading accounts - and that's the problem

Regards

F
 

CostaKapo

Active member
164 12
This is certainly a sensitive subject... so long as the bills get paid and there's cash to play I'll be happy.

I expect the stress to be proportional to the big %'s and will demand a skill level beyond my grasp. So for me as a limited time trader I'm working toward 50% as a good result, while still working the day job.

(y)
 

kwickwool

Well-known member
291 30
Just to add to the leverage point, with the top tier brokers u will rarely get above 50 or 100:1 but if you can get 500:1 you should take it for sure always, reason being is you can trade still based on your 50:1 or 100:1 leverage but you need less of your cash in your brokers account. If you trade typically 50:1 and u are offered 500:1 then you only need to keep 10% of your capital in your brokers account and can have your own personal account with the other 90% that u count as your trading capital also but nice and safe. Maybe a few tops up required etc if u hit a bad run but security of your funds would be nice benefit.
 

Pferd

Active member
132 16
Just to add to the leverage point, with the top tier brokers u will rarely get above 50 or 100:1 but if you can get 500:1 you should take it for sure always, reason being is you can trade still based on your 50:1 or 100:1 leverage but you need less of your cash in your brokers account. If you trade typically 50:1 and u are offered 500:1 then you only need to keep 10% of your capital in your brokers account and can have your own personal account with the other 90% that u count as your trading capital also but nice and safe. Maybe a few tops up required etc if u hit a bad run but security of your funds would be nice benefit.

Very smart comment! (y)
 

limopcfx

Junior member
15 0
Hi guys,

This is my first post here. I am really enjoying looking at the forum and looking at forex. It is really interesting.

I am new to forex and trying to learn as much as I can. I will appreciate your help.

Just curious, why it is always said that someone with a little investment can make high returns monthly but as the investment grows up it becomes hard to achieve the same results? In both cases the investment size is negligible as compared to the total market size so in both cases his percentage of the market size is almos 0%.

So what is the difference between investing $1000 and investing $100000? if both equal 0% of the total market? I am assuming both are using the same robot for automatic trading (or within PAMM)
 

Forexmospherian

Legendary member
39,928 3,301
Hi guys,

This is my first post here. I am really enjoying looking at the forum and looking at forex. It is really interesting.

I am new to forex and trying to learn as much as I can. I will appreciate your help.

Just curious, why it is always said that someone with a little investment can make high returns monthly but as the investment grows up it becomes hard to achieve the same results? In both cases the investment size is negligible as compared to the total market size so in both cases his percentage of the market size is almos 0%.

So what is the difference between investing $1000 and investing $100000? if both equal 0% of the total market? I am assuming both are using the same robot for automatic trading (or within PAMM)


I reckon I could write a book on the reasons why - but will try and keep it extra brief

First of all forget robot trading - even if you do think it takes the emotions away

Unless you have spent over 100k's or more on a bot designed by a super computer - your normal retail type "bots" from $99 to $499 will just go stir crazy normally within 3 -6 months - buts lets say 7 months Max.

So you are back to a mechanical and or discretionary method / system and as well all know - there is not that many that can give you profits day in day out with low drawdowns etc - otherwise 85-95% of all FX traders would not be continual losers

Now - having got those reasons covered - the big reason is all down to the market and money.

I can place a live 10 lot a pip trade on within say a second - 100 lots or 250 lots might take minutes - or even up to an hour or more -o all depending on so many factors . So its easier to place trades on with smaller size lots - and easier to exit with them as well

Next point at least 95% of the working population do not earn over £100k per annum - ie £2k per week gross and say over £1400 per week net

Therefore 95% of people look upon above £1000 as a fairly large amount of money and not one you just give away

95% or so of people would all have different levels

£100 to some people is a lot and they would never risk it day in or day out gambling etc etc but then maybe 25% might say I will risk losing £250 on a trade of even £500 on a trade etc etc

Therefore to grow an account from say £500 to say £10k - or even £25 k is all within normal limits and keeping losses under say £250 or £500

BUT

Start going above 100k and then trying to grow that by say just 10% a month ( easy on small amounts ) might mean taking losses of over even £1000

Remember 95% of people think a £1000 or more is a lot to just lose on a punt

Psychology gives you a financial wall - all according to your existing wealth or earning power.

That why most traders cannot keep compounding and continually grow an account to say one million or ten million pounds in say a few years.

Maybe over 5 or 10 yrs they can -= as they adjust their psych to handle larger stakes and losses over £1k or £5k or more on losing trades.

There are another 10 reasons or so more - but said would keep it short

Hope that helps


Regards

F
 

bredin

Member
80 20
Broker leverage is almost totally irrelevant since only the terminally stupid actually use that much leverage on every trade. At 500:1 you'd blow an account in 20 pips.

What matters is the amount of *your* money that can potentially be lost in a trade (ie, risk). This is what determines trade lotsize.

$150 risked over 500 pips (eg) yields 0.03 lots (3 micro) regardless of your brokers leverage ratios.

The rest of the account (say $500) determines the maximum lotsize 0.5 lots at 100:1, 2.5 lots at 500:1, 0.25 lots at 50:1.

Never let a stop get hit: Gains are added to risk, losses removed from it. this money becomes *yours* only by moving it either back to the leverage side of the account ledger or withdrawing it from the broker.


As to the OP's question: I would only say that you cant trade to pay the bills, your sights have to be much higher than that. With this in mind, annualized returns are relative to your account size and your bills :)

G.
 

limopcfx

Junior member
15 0
@ Forexmospherian , @bredin

Thanks for your reply.

First of all forget robot trading - even if you do think it takes the emotions away

Why? I have seen several links of automatic trading accounts doing a decent and steady returns


Start going above 100k and then trying to grow that by say just 10% a month ( easy on small amounts ) might mean taking losses of over even £1000

I see profits or loses as a percentage of the initial investment, in any case one should be investing only if he knows the risk. a formula remains the same formula no matter the values of the variables. If a system can generate 300% annually on $1000, to me means the same system would generate the same 300% on $1000000

Of course the DD in the first amount would be less than the second, but it is the same percentage.

I am not just arguing, I am just trying to understand. I am new to this.

Therefore to grow an account from say £500 to say £10k - or even £25 k is all within normal limits and keeping losses under say £250 or £500

Considering what I mentioned above, I would like to understand more.

Would this mean that I would better keep 10 separate account each having $1000, for each to reach $10K (final result 10k turning 100k) but I can't achieve the same if all were put in a single account?

May be it will help to tell you, I am thinking of having my account(s) managed with a professional well performing account manager through PAMM, if the PAMM has 50 investors, and each investing a different amount, be it $1000 or $1000000, the profit or loss would be the same for all.

Gains are added to risk, losses removed from it. this money becomes *yours* only by moving it either back to the leverage side of the account ledger or withdrawing it from the broker

Considering the above mentioned in third quote, this means I have to keep taking profits back to my bank account or opening a new account with the broker to put small chunks in it to be traded?

Sorry if my questions seem silly or stupid, I hope you understand I am new to this and trying to understand this business.
 
 
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