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1. Assuming an “average year in the markets”, how much would you expect your trading account to be up on a percentage basis?
2. Assuming the above, what would you expect your max drawdown in that year to be?
Please either respond via comments or if you’d like to remain anonymous, click the “Email Us” link in the upper left corner of the main page and I’ll summarize the anonymous results.
- John
July 12th, 2007 at 4:01 am
1. About 5-10%
2. About 10%.
July 12th, 2007 at 7:41 am
I will get this party started. The question I assume is to challenge the unrealistic expectations that many ‘traders” have.
Mmmmmm. Since I would probably skew the answers that come after me I am going hold off on posting my thought until we get a few responses. So c’mon get “the backtesting guru ” some data…..sorry John
July 13th, 2007 at 1:07 am
When I started full time trading last year, I really had no expectation other than thinking I could do better than a full-time broker. After all, they’re putting in 10 minutes a week for you and as a full-time trader you are devoting 9+ hours a day to trading, learning, reading and devouring the markets.
It quickly made me realize it’s hard to even make 10% - especially if drawing income from your portfolio to eat.
I think John had a post before that showed you’d have to do at least 2 ES points per week to compensate for every $50K in salary you’re trying to make up.
In other words, if you need a $50K salary and you expect 10% , you need a minimum portfolio size of $500K to generate that. But your portfolio isn’t growing. So you need to generate 10+n% ( 10% for you and n% to grow your portfolio). And 50K doesn’t go far in some parts of the country.
So yes - these sound like unrealistic numbers, but it depends on your portfolio size. Someone with $2 Mill only needs to do 2.5% a year to make $50K. Possible? Absolutely.
This year is a little different. I’ve found my stride and maybe with a little help from the bullishness in the air, I might be able to do about 20-25% above my income draws.
I’ve had one day drawdowns of 12-13% and they don’t scare me anymore. They now present buying opportunities.
So the end result - I’m thinking…
full time need to generate 20-30%
part-time need to do 10-12% otherwise put it in a mutual fund giving 8%
max drawdown -13-15%
Thanks guys!
Not Hurting any more