Like most trading strategies it is courses for horses and depending on the market thus depends the strategy!
If anyone could consistently show 40% per annum over a number of years as a retail customer rather than a market maker or registered trader they would be able to command almost whatever salary took their fancy with most financial houses in the world.
In the mid 80’s we were selling stock and placing the cash out on the money market at 22% because the holding cost of the option was cheaper. That’s exactly the opposite.
Once again the strategy bow needs a full quiver of different arrows including staying out of the market if there isn’t a deal there and even heaven forbid, PROPERTY, which in itself is not a one size fits all business.
“If anyone could consistently show 40% per annum over a number of years as a retail customer rather than a market maker or registered trader they would be able to command almost whatever salary took their fancy with most financial houses in the world.”
One factor most people don’t consider is account size:
Returns of 40% p/a…and well in excess of that are possible with a relatively small account size.
i.e. with say a 50k-200k a/c it is quite easy.
with a million dollars it is considereable harder.
With a several hundred million dollars like the financial houses are playing with, it is virtually impossible.
The reason basically comes down to liquidity. You can sneak in and out of a small cap stock vitually unnoticed with a 10k parcel and scoop out….say 50% profit as an example.That sort of trade would have a considerable impact on the bottom line of a 100k a/c.
The financial houses can’t really take trades such as that.
I can dump 1500 NAB shares into the market and the market wouldn’t even blink. If One of the funds dropped their $200,000,000 worth of shares onto the market it would cause a mini crash.
The private trader has a monumental advantage in this regard.[
][][]Hope that makes sense.
Wayne
I know plenty of traders who make around 100% a year. The trouble is that the profits pay the bills, they dont compound over time. My impression is that these guys are playing with around $150k on average.
I know plenty of traders who make around 100% a year. The trouble is that the profits pay the bills, they dont compound over time. My impression is that these guys are playing with around $150k on average.Yep! same here. It seems traders like to live the high life….and neglect to leave some profit in the a/c for compounding purposes.
(I must admit to being the same in the past…[
]yet[]) What’s the name of that song?….”I’ve Done All the Dumb Things!” LOLNowadays not much cash escapes my coffers to be spent on frivolities.
Wayne
Interesting.
Is this a consistent 40% per annum? And how do they do it (Options, futures, shares etc…)
Crashy, would you care to name who these people are (who average 100% p.a.). Are they Australians or Americans?
Also when you say they play around with 150K. Is that in total?
100% of 150K would be plenty for me with some still to spare!
Pin
They are plain old aussies I have known for 5 years. While the return is good, it involves a lot of work, stress, sacrifice and risk.
They do it using leverage of some form, mostly CFD’s these days.
Its never consistent. You can make $50k one month then lose $10k a month for the next 4 months. I am assuming they play with $150k, we try not to involve dollar amounts, it inflates the ego which causes irresposible trading. I dont think I should name names.
Hi Crahsy,
Was just wondering whether they were *famous*. That’s all. So you would say that these are just ordinary people then?
Pin
Pin
http://users.bigpond.com/prominex/pegasus.htm
This chap trades longside trades only, no leverage at all.
Imagine what can be done with some leverage and decent money management.[
][][][][]The techniques are easy….the psycology is the hard part[
]Wayne
Wayne is spot on. The psychology is extremely hard. Most books tell you stuff like “get disciplined, stupid!” but thats as far as they go. I studied a lot about discipline (because I was so bad at it) now I teach people how to be a disciplined trader. Its all in my course.
][
]) What’s the name of that song?….”I’ve Done All the Dumb Things!” LOL
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