Poll: What are Impressive Percentage Returns from Trading?

200% is max for most impressive annual earnings? Hmm...see, this is why I asked last week about annual earnings. I wanted to get some sort of perspective of where I am. I don't want to brag (and I won't), but 200% annual earnings, to me, is mediocre. But, I guess total equity has a lot to do with it. It's much easier to have higher pct. gains with $50,000 than it is with $500,000.

wow, if you think 200% is mediocre then I'd say you're off the chart. FWIW, I said 200%. But this is why I made the poll, b/c I'm curious about what others think is impressive.

Not sure I agree with you on "It's much easier to have higher pct. gains with $50,000 than it is with $500,000." Yes, at some point the law of large numbers starts to kick in but I don't think it's at "only" $500,000.

Mike - try pollhost.com (I have not tried it yet, so no promises).

Also, I think people making 25% from trading are doing great. They may not be able to make a living solely from trading, but still doing great.

Well, I used $50K vs $500K just as an example. My point is, the larger the equity, the harder it is to multiply, especially with stocks.

$50k won't move a market like $500k would. And, in order to minimize that affect, equity would have to be divided among more stocks, which then becomes more difficult to administer and the diversification essentially dilutes the equity. To make my point a bit more obvious, it is much easier to get a 200% gain with $1 than it is with $1 Million. That dilema affects $50k:$500k the same way, just on a smaller scale.

I may be wrong, but that is how I see it unless something else makes better sense to me.

X, thanks, I'll try them next time.

Baby Jocko, I would hope that even with $50,000 that the money would be split among more than 1 stock. But I guess it depends on the trading style.

I do agree that liquidity and moving the markets becomes a factor at some point. What that point is, I don't know but I hope to find out. :-)

I would not call 200% return in a year as spectacular. You need to have higher threshhold in the poll to call it spectacular.

So what would you call spectacular? feel free to share.

I mean, 10%, even 25%? IMO, if anybody only makes or expectes to make those amounts by trading, they probably shouldn't be trading unless is is solely for entertainment.

Let's say a person has $100,000 equity. Well, 25% of that is only $25,000. 50% is only $50,000. You can't live on that! So, why try? Anybody who has accumulated $100,000 would be better off doing whatever they were doing that earned them the $100,000 in the first place.

I dunno, maybe most traders have inheritted their equity or has come to them by windfall. But, anybody who has earned their equity, IMO, should expect (and actually make) as much money or more than they were with their previous day job. Otherwise, what's the point?

Anything beyond 500% plus returns I would call spectacular. Assuming not working for prop firm and using your own capital. For day traders working for prop the % return is meanigless as their own contribution to capital is low.

I would post poll options as:

20% - 50%
50% - 100%
100% - 200%
200% - 300%
300% - 400%
400% >

That's an interesting comment Pradeep. This is what i was getting at in the previous post. So do you 'discount' all leverage? A daytrader using 4x leverage, people that trade futures & options?

No. My point is the prop structure sometime operates on as low as 1000 USD or no contribution from traders so it is meaningless if he/she makes 500%. There I would consider anyone making a 1 million plus as spectacular.
In fact if you are day trader you should trade prop because it allows you to amplify your returns.
I am saying if you trade your own capital then to be considered spectacular I would look at 500% plus as the benchmark. It does not matter what instrument and leverage you use to get it.
For smaller acounts that is why it is better to trade futures or options which increases leverage, provided you have the edge.

I didn't know prop firms let people start out with so little capital. I thought $5,000 was the minimum. Seems like it's would be exceedingly easy to wash out with such a small account and so much leverage.

If you have a track record and doing big volume, and are profitable, talk to prop firm, you will be amazed at what kind of deals are possible. Besides the typical equity trading chop shops there are also options and futures prop shops who give you access to capital to trade.
Obviously new traders do not get it so easily, there are restrictions on how much they can trade.
The firms have software to manage risk on a real-time basis per trader. In most cases each trader is limited to the amount they can lose on a daily basis.

Don't know what would be considered spectacular in today's market, but back in the 2000 time frame, the best day traders at the firm I was with were making 50-100%/month. That's how they got rich fast.

I think 500% in one year is relatively easy as long as you aren't too concerned about the probability you will crap out sooner or later. One year return is meaningless; its how much you can compound over time that is impressive.
As an examply, I turned $20,000 into a million in 1999. Unfortunately, the next couple of years I gave most of it back. I am a lot more concerned with risk now than I was then.

Hube,

500% a year is easy??? Let me send you a check so you can trade for me. I'll give you half the profit.

Mike,

I would prefer to use the % as well as total. I think there is a big difference between starting the year with say $50K Vs starting with $300K. For me 50% to $75% return on the original equity is great.

The question to you is what is the return on swing trading Vs. day trading (assuming identical situation). I think your answer would be day trading should produce much higher return. Say a 50% on day trading will be equivalant to Xx% on swing trading? What would be your Xx?

Thanks for the great web site.

VC,

I don't necessarily agree that day trading should produce greater gains that swing trading. So much depends on the market. If it's trending well swing trading should do very well. At the same time, if there are a lot of gaps, day traders could miss a good portion of the moves.

Over the course of a year there will probably be times when one style works much better than the other.

Calypso; TheHube, 1999-2000 was an anomoly. That was during the Internet bubble. Either lotso money was made or lotso money was lost during that time.

VC, I agree with Mike here. There's not necessarilly an advantage between swingtrading and daytrading. Depends on many factors including the individual's style. Dr. Alexander Elder would dare daytrade. Personally, I perefer both. But, I don't swingtrade during primary and intermediate trend reversals -- times of market uncertainty.

With regard to prop firms, I think PraDeep is pretty much saying what I've said, that smalll amounts of equity is (generally) eaiser to multiply than larger amounts. But, "equity" in this case should exclusively refer to your own capital, not margin or someone else's added capital.

Since we're talking in terms of percentage, it's hard to clearly define what a "specular return" is without considering total starting equity or risk level. To me, in general, 100% gain in 1 year is exceptional, as long as it's considered "reasonably sane" trading, i.e., not all your equity is in one penny stocks that happens to go up 10x, or in one single stock like HANS. There's a lot of luck involves in such cases, as well as extremely high risk.

If we take starting equity into consideration, "spectacular" is quite relative:

- If one starts out with, say, 25-50K, and make 100% on that in one year, although not much in terms of absolute dollars, I think it's spectacular if one did exercise reasonable position sizing and risk control. Of course some people think using all of their money in one stock is "proper trading" and "acceptable risk".

- Is 25% return on 1 billion not spetacular? I'm sure not many can achieve that result in any one year, even among the great traders. Some great ones started out with a small amount of money and became multi-millionaires, or even billionaires, but that's the result of several years of accumulation as their buying power increases. If you can make anywhere close to 100% on 1 billion, you're the Trading God.

- Mike only talked about return in 1 year, and the question had nothing to do with whether one could make a living by trading. And even if he did, if one has, for example, 1 million in starting equity, isn't 20% return enough to make a living, and a great one at that?

- Sure, if one makes "only" 25% on 100K, one might not be able to make a living, AT FIRST. But why is it that one should not try trading? After all, it takes time doing something else (unless you inherit or have a windfall) to accumulate that initial 100K equity to start trading with. Trading as a career requires a lifetime's effort, just like any other professions.

- Nobody can trade for a living at first, unless they start out with a huge equity (and of course some skills/knowledge), or don't even blink if they lose all their starting money. If 200% return on starting equity is not spectacular to some people, I wonder if they ever take risk and money management into consideration?

excellent points Ken.

Well, mostly I'm doing it on the eastern Europe emerging market, so it's not comparable, but let me say it anyway.
It's 5000% in five years, best year was above 400%. And off course, the final amount is huge. Should be said also, that it was a very easy play, if you now the meaning of transition story for these countries.
Mostly, tactic was hold and wait until story is over. Within these years, there were three big stakes which made most of the gain. One went 10 times initial price, with big margin, second went ten times without margin, and third went five times initial investment.
Now, the amount is to big for further investing like this on these markets. They're not liquid enough, so I'm splitting into more classic portfolio, diversified, with more markets, including US, more stakes, still holding few bigger stakes (stories still in progres), and considering that now it's another league I'm playing with.
It came as a surpise to me that to many (interesting) stocks on US market are not liquid enough.
There is a big difference,... with earlier tactics it was "hold and wait", but this market is so volatile, and from time to time, it's hard not to press sell button. Few times, I've lost real big gains that way.
So, within my portfolio, US part (about 5%), made 30% gain last year, which is OK, but stand still impression that outcome could/should end up better, considering what was missed.
My impression on US market as well is that if one holds about five positions, $1 million each is good enough to achieve gains above 15% which is a long term goal. Bigger amount means top liquid stocks, which I don't prefer (volatility), or more positions, what means more work and less control, which also isn't a goal.

100% is awesome - period! looking at nominal $ amount to lessen accomplishment of 100% annual yield is futile, except in terms of miniscule accounts. 100% compounded over a few years and you are done; even allowing for port size increase somewhar hampering returns. 100% gets your mug on the cover of Time Magazine; its 20 years of T-bill returns in 12 months - awesome. 100% on a $100,000+ account is awesome.

Based on the comments here, there are some folks making an inordinate amount of jack in relatively short periods of time. I hope all those in that group recycle that money back into the economy and keep things humming along.

There are 25 funds for this year with 73% plus returns.

http://moneycentral.msn.com/investor/finder/deluxefundscreen.aspx?query=Hot%2c+No-Load+Funds