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What is a realistic average daily return for a day trader?

Discussion in 'Beginner's Lounge' started by Jamesdee, May 25, 2009.

  1. Jamesdee

    Jamesdee

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    Hi everyone,

    What is a realistic average daily return for a day trader?

    After reading many articles on the interent i can not find an answer. Of course there are the fairy tail ones about people making $1,000,000+ a year and also the tragic the ones about people going broke. not to mention the scams.

    I really have no idea of what is realistic. However, I do understand that having realistic goals in your trading paln is very importaint.

    So...

    Is a 5% return (each day you trade) on your total portfolio realistic? if so is it modist? or if not how unrealistic is it? - what is a realistic?

    also...

    I have read that on average day traders (who trading for a living and are successful) have about a 60% success rate (60% of their trades are proftable) is this true? if not what is their real success rate?
     
  2. jono1887

    jono1887

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    Its incredibly hard to determine, day traders can make 1000%s in a highly volatile market as it was back in March-April... It depends on so many factors like how the market is moving, how skilled the trader is ect ect.

    I think being able to consistently earn 5% a day is not impossible but I doubt many day traders achieve this consistently...
     
  3. Trembling Hand

    Trembling Hand Can be found on the bid

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    Then it doesn't matter. If you have no idea of what the markets offer then, in my not so humble opinion, you are years away from actually taking anything out of the market consistently.

    But as a hint it mostly depends on capital.
     
  4. skyQuake

    skyQuake

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  5. awg

    awg

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    -0.002739726027397260273972602739726 % per day x (100/3)
     
  6. freddy2

    freddy2

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    5% is way too high. Assuming 250 trading days per year that is 12.5 times your money in just 1 year using simple interest (1983 times using compound interest). Perhaps 0.1% is a more realistic figure - so if your bankroll is $100,000 you would make $100 per day before tax. Better to get a job at McDonalds.
     
  7. Jamesdee

    Jamesdee

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    Ok maybe i exaggerated a bit there - I will admit i am still learning (this is why i asked the question). I guess my view of what is and is not possible is distorted by the fairy tail stories and the tragic ones. I am aware that it depends on things like the amount of risk you are willing to take, the amount of capital you have and market conditions. I am aware that there is a variety of factors.

    To an extent i will agree with you, i probably am a few years off trading (im only a 2nd year finance/economics student) i understand the basics and have a rough idea of what the market can offer. However, by not answering my question, giving me any new educational relevant information and not even giving me a ball park figure your not really helping me get to the point of "actually taking anything out of the market consistently" are you. :)
     
  8. Jamesdee

    Jamesdee

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    thanks freddy2

    I worked there when i was a teenager - never again
     
  9. simoncar

    simoncar

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    However, by not answering my question, giving me any new educational relevant information and not even giving me a ball park figure your not really helping me get to the point of "actually taking anything out of the market consistently" are you.



    How many runs can a cricketer make in an innings????? Depends on the pitch conditions, the standard of the bowlers, the standard of the fielders, how much luck you have, how much have you practiced, have you got the basic skills, is your bat any good, are you in the right frame of mind, do you know the rules properly.
     
  10. Aussiest

    Aussiest

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    As TH said, it does depend largely on capital, but there are other factors at play:

    Market volatility - how volatile the market is that day (eg, you can exploit the ups and downs)

    As you rightly pointed out, how much risk you are willing to take

    Your experience in the market and whether you can identify candidates for your trading

    There are some days the market trades in a very narrow range. Those days are not good for day trading!

    Just my :2twocents
     
  11. Cartman

    Cartman

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    Probably right for most Fred ---- but u cant compound hamburgers can ya ;)
     
  12. The_Bman

    The_Bman

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    I play in the ASX share market game. It's great for testing new plans and strategies and gauge performance against other people.

    The leader is on $86,660.97 or 1.1% per day on the $50K initial capital.

    The top 100 players are on .6% or better.

    I'm in the 29th percentile at 3840 of 13377 players. This is equivalent to .2% per day on the $50K initial capital.
     
  13. skyQuake

    skyQuake

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    You might be able to make 2% today, but lose 3% tomorrow, then make 1% the day after, and lose 15% next when stuff hits the fan. Point is if you are daytrading equities, its probably better to have a monthly goal (depending on your timeframe) rather than a daily expectancy.
     
  14. Trembling Hand

    Trembling Hand Can be found on the bid

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    Freddy you haven't a clue. As usual you chime in and claim that traders make nothing. but of course you will not comment past this completely uniform post to give any reasoning behind you claim.
     
  15. Aussiest

    Aussiest

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    So, you may be able to reasonably assume that you could expect a return of around 0.5% of capital, if you were lucky?!

    Good point SkyQuake..
     
  16. Jamesdee

    Jamesdee

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    thanks Bman - this is the kind of info i was looking for (i probably should have been specific) an individuals average figure or example of what can realistically be achieved.
     
  17. MichaelD

    MichaelD Not fooled by randomness

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    I'd suggest that the distribution curve of profits amongst day traders is not a normal distribution, with the vast majority of "day traders" making around -5% per day, and the profitable 0.01% taking the money from the -5%ers.

    Also, to take the suggestion of returns from the ASX game as in the slightest bit relevant to real day trading clearly would put you in the -5%.

    The best risk manager is the winner in this game.
     
    Zaxon likes this.
  18. beamstas

    beamstas

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    If you started with $10,000 and made 5% a day, after 1 year (252 trading days) you'd have $2,186,267,836. Of course, that is unrealistic, because you wouldn't be compounding that much money.
     
  19. The_Bman

    The_Bman

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    You're welcome, the real point here is there is no right answer. The Game has a limited number of stocks to trade and you can only hold long positions. Other instruments like CFDs or chasing penny stocks can return >100% a day if your risk appetite allows you.

    IMO, if you want to measure yourself, set some goals, e.g. Achieve a % return > 12 month term deposit. E.g.16% pa.

    Measure yourself and adjust your trading plan and rules accordingly.
     
  20. Kryzz

    Kryzz shaun

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    Stupid quesiton here, is the no. of trading days just 365 minus all weekends and public holidays?

    Shaun.
     
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