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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. awg

    awg

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    I cant quote the source ATM, however, I do recall reading that obssessive-compulsive tendencies are higher than average in a number of occupations, including pilots, mechanics and sportsmen lol :)...traders?

    I have taught quite a few people how to play guitar.

    One guy was outstanding, from the very first time he picked up a guitar.
    He had never, ever played before and was in his 20's

    I am unable to explain why he was so much better than anyone else, other than that he possessed a combination of innate skills that facilitated this.

    The way he played after ONE lesson was just amazing.

    I have never seen anyone else remotely like that

    He went on to play pro which would be very rare for someone who started at that age.

    re Trading, do you think a lack of intelligence would be an impediment, ( ie lowest 25 percentile), more so than than an abundance of intellect being and advantage?

    BTW, I have come across many people whom would have had a measurable IQ, less than my own, but I consider their practical application of intelligence greatly superior to mine
     
  2. jono1887

    jono1887

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    Theres a tv show on tonight to settle this debate... they did a social experiment where 8 random people were given intensive trading training for 2 weeks then $1million to start their own hedge fund, i think the result would be quite interesting. Its on SBS, 7:30pm Tuesday.

    - Million Dollar Traders
    Eight ordinary people are given a million dollars, a fortnight of intensive training and two months to run their own hedge fund. Can they make a killing? The money is supplied by hedge fund manager Lex van Dam: he wants to see if ordinary people can beat the professionals, and he expects a return on his investment too. Yet no-one foresees the financial crisis that lies ahead. The traders were selected in spring 2008, before the US credit crisis gathered pace. Among the traders are an environmentalist, a soldier, a boxing promoter, an entrepreneur, a retired IT consultant, a vet, a student and a shopkeeper. As the novices learn the dark art of trading stocks and shares, the financial markets start to buckle. Making money takes second place to basic survival as the brutal realities of global economics take their toll on the traders. How do they cope? Will they secure themselves a bonus, or walk away with nothing?
     
  3. Timmy

    Timmy white swans need love too

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    2 whole weeks eh? LOL
    Anyway, looks like it should be fun.
     
  4. nomore4s

    nomore4s Commonsense isn't that common

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    Jono, there is already a thread on this show.

    There are links in that thread for all the episodes off youtube.:)
     
  5. Trembling Hand

    Trembling Hand Can be found on the bid

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    You have to be frigging kidding?
     
  6. skc

    skc Goldmember

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    Guitar hero? :D
     
  7. awg

    awg

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    dont think it will sort out much

    I do fully agree with TH contention that constant practice and evaluation over a period of time paramount.

    in this case they have minimal training and practice..2 weeks?

    As a for instance, I would contend that only very basic maths skills are required for trading...ie percentages and + & -...but you have to innately understand them

    and yet, just today, I here the maths knowledge of Uni nurses is so bad, the majority are unable to correctly calculate dosages based on bodyweight:eek:

    back to music...sorry cant quote the source, but very recently
    two groups, one practised piano daily, the others practised only in their heads.

    results...same improvement, did not surprise me, this happens to me all the time, very hard to explain, but I master the most complex pieces mainly in my head.

    The brain translates the thoughts into music and instructs the fingers to the minute control required to play, (and the other way around.)

    manual practice still required of course, but it can take hundreds of hours to master the most complex pieces, but sometimes huge leaps are made without any manual practice at all, the music plays in my head constantly, and allows the neural pathways to form.

    It gives me a huge buzz when this happens:)

    skill, mindset, practice.

    I want all three, got a long way to go:)

    I think this show has been around before, I will be watching it
     
  8. jono1887

    jono1887

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    oh sorry, i didnt know...
     
  9. jono1887

    jono1887

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    The first episode was hilarious!! that old man having breakfast during open and loosing on all his trades, and then there was the girl that cried for 1.5 hours because she was too scared to make a trade... i think it just shows that not everyone is capable of trading...
     
  10. ThingyMajiggy

    ThingyMajiggy

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    Personally, I wouldn't be capable of playing in a professional band in front of 50,000 people after doing 2 weeks of guitar lessons either. :D

    The show is entertaining!
     
  11. jono1887

    jono1887

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    But they're starting of small with 25,000 pounds, limited to 20% per trade... its essentially the same conditions as the ASX stock market game and the majority of those players are able to profit.

    They also have the ability to short... they should've made a killing during the beginning of the crisis, but all they've been able to do is bleed money :p:

    They could've been using pretend money with fake brokers for they knew, or even us... it all could've been a simulation and no money was risked. You would've come out with the same outcome i think. They should have an Australian version of this, with weekly eliminations and group challenges and what not... perhaps channel 10 could fund it :p: it would be better than big brother
     
  12. seekandfind

    seekandfind

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    Tough question to answer properly, and it always comes up in many forums. The thread usually ends up badly LOL! Rather than provide a specific metric initially, I think the OP can strive for the best results by focusing on deriving a method that consistently provides a high percentage of winners, month after month after month regardless of market condition. Yes it is possible to get to that point. Essentially a consistent average of 80% or higher winning trades month after month. The second variable to strive for is to find a market that provides for the ability ( with an enormous amount of screen time experience) to consistently keep a stop loss at 3 ticks or less ( if trading futures). The 3 tick stop acts as a disaster stop which is not usually hit, most losses will be kept at 1 or 2 ticks. Once this can be achieved on entry selection, screen time will also allow you to determine what time of the day (usually) achieves the largest range, and your profit is set to a portion of that average ATR ( obviously adjusts to market volatility). This will define your maximum profit objective which should be hit quite frequently together with smaller profits that are taken either based on price stalling or based on time expiring ( day trading only the optimal time period of the day). The largest profit objective will be 5 to 10 times the average loss ( my method and the market i trade). It is not uncommon to experience an average daily return of approximately 50% for extended periods of time. Bear in mind I used a heavily discounted futures broker, with non typical leverage available during the markets day session. In order to obtain that return, I initially risked between 5 and 10% of my account on a trading account that was sub 50,000 USD. For my situation, my broker, and my method I have found an ideal account size of 60,000 USD. I now cap my maximum contract size per trade to 20 contracts, with a maximum risk of 3% per trade ( 3 ticks ), so returns now are lower, but the 50% per day is quite possible and with a reasonable degree of consistency. The largest daily return I have obtained is close to 150% ( 48 ticks and it came in within 30 minutes of trade entry), but it was an outlier for sure. I used a money management approach that was very similar to what Larry Williams used when he achieved his 1987 record. This is more applicable to the account in its early stages, but is incredibly powerful if you can achieve a high success rate with a very tight stop loss. decrease contract size when losing, and increase when winning by a fixed ratio. This technique will not work in most cases but will generate the fastest rate of return possible if you can achieve the objectives I have outlined. My broker provides low margin up to a maximum of 50 contracts. So this is one reason why it is not possible to continually compound the returns I have highlighted indefinitely. In addition the 30 year bond futures that I trade have trouble generating fills at the same price the method dictates when trading too large even during liquid trading hours, so I must stress that these returns are only possible with consistency on a relatively small account size. I hope I have answered your query. Realise it was a while ago, but this can still give you an idea of what is possible. In terms of an official audited record of what is possible in day trading, as far as I am aware, the best record I have seen that is public knowledge, and audited was that of Mary Schwartz. His average return over 20 years was 25% per month.
     
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