More risk = More reward
Why everyone is obsessed with fixed returns.
More risk = More reward
Why everyone is obsessed with fixed returns.
Not necessarily
Let us approach this situation from another angle.
For the sake of argument, let us assume that
you are aware of a strategy that reliably provides 1% per month returns.
Without disclosing the strategy
(since, you justifiably do not wish to be copied),
can you answer a couple of Qs?
Q1. How much volume can it sustain (and continue to provide the 1% returns)?
Can it handle 20K per month? Yes? OK.
How about 200Cr per month? No? OK.
So, at what volume in between 20K and 200Cr will this strategy stop working (no longer provide 1% returns), and why?
Q2. What is/are the guarantee(s) that the market conditions necessary for this strategy will continue to be present say 3 months from now? How about a year from now?
Q3. Also, can you think of and suggest any approach acceptable to you,
upon following which, someone with relevant expertise can prove to you that,
the strategy you think will provide 1% returns, will not do so?
(if not, then probably only way you can find out the issues with the strategy is to risk actual money, and if it doesnât work out, find out why it did not by not making 1% per month returns)
I am not sure that sharing oneâs recent P&L (even if verified) achieves anything meaningful in this context as the strategies being deployed and the risks being undertaken are not evident.
The question isnât -
~ âHave you ever achieved 1% return in a month?â
nor is it -
~ âWhatâs the highest return one can achieve in a month?â
Rather it is -
~ âminimum how much we can expect to earn per month in futures intraday tradingâ
Amidst all the various directions in which this topic-thread is exploding,
the following question/statement drives the discussion towards
one of the (IMHO) more productive/actionable directions.
No, not that at all. I vaguely recall discussions with strategies, and the market conditions and challenges associated with them, previously on this forum. Feel free to share a direct link if you can recall/find the exact topic-threads.
FWIW, 1% per month returns are NOT something spectacular that needs investing in derivatives or complex instruments/strategies. It can be achieved by investing in T-Bills, GSECs, SDLs in the secondary market, with the invested capital exposed to near-zero risk (sovereign guarantee). Been there done that.
Regulars on TradingQnA would be bored with this pitch of mine by now.
Anyone hearing this possibility for the first time,
and wondering - What are the nuances and limits involved?
Search for past discussions on GSECs / SDLs / T-Bills in this forum.
For example this post.
@Jason_Castelino What i was (and still am) asserting is that,
in response to the original question that started this topic-thread,
âŚthe following comment
(especially from someone who claims to not have 20K to trade) ,
sounds like it is setting unrealistic expectations -
Reading it again now,
perhaps a more charitable interpretation of the above comment could be as follows -
"If one cannot reliably achieve atleast â1% a monthâ returns in futures intraday trading,
then it is not worth spending time in such pursuits, i.e. one can achieve as much (or almost close to that) with less risk and with less time/focus/effort spent on an ongoing basis."
yeah per month on avg we can do much better too. But see below.
Taking risk does not automatically get you rewards, so this can be true but is not always true.
Additionally, beyond a point, taking too much risk will lead to almost certain ruin, even with good edge. Equity curve is not a straight line in trading. Arbitrage and the like might be different.
My SBI Nifty 50 ETF - gave a annualised return of 14.78% annualised since inception. Does this not mean more than 1% per month. Why is it not reasonable to expect 1% return a month on an average when you invest in stocks. 1% is 12% pa right
If this message is out of context, please let me know, I will delete it rather than get vamparised.
Garett Fort (Americal Short story writer) once said âThe strength of the vampire is that people will not believe in him.â From the above post it is so true, why is everyone after DraculaâŚ
Hope the Dracula does not come after you tonightâŚneed to keep my eyes open for âbatsâ on my mango tree, they sleep upside down.
(In Kerala we know Dracula more than VampiresâŚ) Just enjoyed the entire post and the reply and felt the exasperation.
I can guarentee 0.6 % per month. Just do FD of 70 lakh in any bank and relax.
Futures for instance is also a risky Job. Try option selling.
Donât focus too much on what others think is good/minimum return.
Investing in a small-cap fund may have returned 15-20% over the past decade doesnât mean we aim for such returns.
Since we are risking our capital, the minimum expected return should beat the risk-free rate post-tax.
Suggest looking for strategies where you can stay sane emotionally and financially, even with market fluctuations. I think returns are secondary.
My sister makes the same amount of money as I do with a tenth of my capital. Risk appetite is different for people.
Sometimes benchmarking sucks and leads to unnecessary anxiety!
PS: Working on Sunday and frustrated, do not take my words seriously!
Firstly, Your expected ROI is not defined?
Secondly, Try options (1Lot) & equity (CASH Segment) intraday (less position size) for at least a year. Remember to forget profit/Loss in trade & focus on your execution. After 1 year of trade you can analyse what works for you.
TRADING PROFIT/LOSS is SUBJECTIVE .Everyone has different journey. Better check what works for you. Donât fall for any strategy. If you canât go full time consider Investment. Survival in Market is more Important than anything else.
Brother kaha se ap wese
Kaha se he bhai AP