Hi,
I am not talking here about the traders who loose money or how much risk in doing this.
I just wanna know for successful traders.
I know this is very vast range and with percentage increasing less number of trades will be.
Also, it depends on capital deployed, like making 30% return on 300crore capital might be a very good return vs 60% return on 2crore capital.
Still, I am just looking what return % will be said a good return for individual person who lets say trading with 1 crore capital and is doing full time.
For intraday fno trader
For swing equity trader
For intraday equity trader
% return is annually
question is for full time traders and not passive investors.
You can find some anecdotal examples / opinions on trading returns
by searching previous discussions on this forum.
Here are a couple -
A few questions though…
How are you defining “good” above ?
In general, the returns would depend on the amount of risk one assumes, right? (riskier the positions, larger the potential returns, and chances of larger losses as well.)
It will also be interesting to know whether it is even logical to expect such a target percentage
in any of the 3 types of trades you mentioned.
IIUC, the market sentiment and volatility would determine the returns,
and the returns observed over a certain period (say the last year),
might not be a realistic target for another period (say the coming next year).
Thanks for replying,
Trading being a alone business, I just wanted to see myself if the return I am making is reasonable or very low as per par.
i.e. is it reasonable to continue, as I am software engineer, so I can always study more and get more paying job.
or may be I can continue both, but work life balance affect in that case.
The links you provided says ~10% per month i.e. more than 120% a year .
But this doesn’t realistic as per my understanding yet, given some months goes in dd or -ve return which brings yearly return down.
I am doing trading since last 4 years, and my return is increasing every year and so the psychology.
Also, I have no background or family business to fall to.
So, I just wanna see my place.
If trading is really good for keeping as pure earning career or just a part time one.
In layman terms,
if you are good at what you do,
then the returns from a successful career
far exceed any interest or capital-gains you might accrue by trading in the market.
this. Trading is NOT a steady income.
Hopefully, active traders can chime-in with their experiences / insights
on how they overcome some of the challenges involved.
Not realistic without taking too much risk. And no per month return possible, trading does not give regular income.
I think its very important to ignore all noise around returns of other people.
What others may or may not make makes absolutely no difference to me. Question is what can i make ?
And we can always try to improve where possible in getting better returns/risk irrespective of what others make.
To make trading worthwhile, we need to trade with good capital and to keep compounding. 1cr is decent, more the better.
We should always try to manage risk first, and then look at returns.
I think something like 20% a year ( not in a straight line) with say 10–20% max dd is a decent target and seems to be achievable.
Compounding this kind of return ( even if it seems low ) is likely going to be more than enough in a decade or 2. More returns are obv better, and we can do better, i have been lucky enough to do decently better than that for 4 years.
Yes, there is no monthly income and no guarantee of income. Option sellers seem to have a more regular stream of income ( i don’t trade options yet, just going by what others say). but we need to see how they manage over long term in different vix environments.
In any case, uncertainty is built into trading. We don’t even know whether system will continue to work let alone having any certainty around % targets.
For me, long drawdown periods are normal. Even after beating dd, we can start a new dd, so long no-income-periods do happen. 6-8m has happened few times at single system level.
They happen even for the most experienced of traders - Andrea Unger for example had a flat year few years back before covid even though he trades god knows how many systems.
Things that might help manage uncertainty - large capital, Income much more than what we need, giving priority to compounding vs taking money out, focus on risk, diversification - finding/improving systems, no dependency on trading income for expenses in medium term - so have extra capital for that or have another source of income.
20% return with 10-20% dd , is it really a good system ?
For me till now in last 4 years max dd was 12% and annually return is more like 40-50%
which I am considering not so good given my capital size (1 Crore ) vs salary I could earn via job.
I gave some generic % which looks good enough to me and is achievable based on what i see in multiple systems. Good or bad depends on who we ask. And yes we can do better, but 20% annualized compounded over long term is a very good number.
I don’t know what to say if someone is not happy with 40% annualized returns with good capital. That is more than double every 2 years if you compound. 1cr becomes 2 cr becomes 4 cr and so on. So whats the problem ??
Now i am not sure what was the purpose of this thread exactly.
Salary - if you can make more, then very good whats the problem again ?
Not sure if its easy to compound salary like that but anyway, no one says trading is the best thing to do. For most people, working on their career will be better.
Another option is to trade overnight only. Then you can continue your job and trade overnight by giving say 15mins every day. And salary income you can push into trading capital and keep compounding.
I can see that most HFT earns like 40-70% and that with like 300 Crore or more capital
so, making 50% on only 1 crore is very bad as compare to them.
Well, I am just confused in deciding whether to continue this trading path or go back to job world(after 4 years).
Both have its own pros and cons.
I decided to do full time trading as it has super growth potential and freedom of location and free of any human politics.
I gave me 4 years just like any graduate college, now after 4 years I want to evaluate if the return I am making is worth to continue the journey or not.
Apparently, the past few years, it was hard NOT to make money in the market.
One aspect to consider is - Is the performance of the last 4 years reproducible?
The other aspect to consider is - How much is enough for you?
Think about your lifestyle needs and decide
if/when the additional financial returns are not making any meaningful difference. (and whether to continue taking risks? what for?)
15-20% P.A is base rate .Anything above is your competences and skill and risk taking capability.
Why i came up with this number as in India this is the average/mean trading/business income ROI one can make .Equity market Trading is also business and earning in this range then your professional .
Best thing about this business is very less or no external risk ( you can be anywhere in the world with internet your sorted) and re session proof as well. No dependencies on external things/people. There will be always buyers and sellers here no need to search for customer
I guess this depends on individual and what drives them.
imo there is no end to this, instead of looking at it like that - look at how much you are making and how your capital will grow over time. Is that not enough ? Some no talent actor might be making crores, should i bang my head over it ?
The best trading firm, Renaissance, made about 60% annualized over many years. They have a bunch of scientists doing the work.
If you are going to get disheartened by comparing to what others make, then it will probably become difficult to sustain in this business.
Instead better to work on your own trading and improve where possible while always making sure that we don’t take too much risk trying to chase returns and ‘catch up’ with other people.
I cant really answer that for you.
i think 40-50 pa with 12 max dd is very strong and focus should be on compounding this over many years. This will soon turn to 10cr and more as long as you can scale.
But best to not assume that we will always get high returns from trading. As competition increases, things can get tough too. Systems can stop working, and many systems have stopped working in last few years.
If you can make more than this via job and are happy with the job, then sure why not. As i said, we can always shift to HTF systems that don’t demand much time ( say something on weekly as an extreme) and that way you can do both if you feel like it.
This is not for everyone. Buy the dips / investing type of guys may have had it easier but it actually got tough for many intraday traders too due to low volatility / more competition etc.
A friend of mine had a system that used to work well before covid, but that stopped from 2021 or so.
I have seen traders making 300% return in an year. While I also met one guy last week who lost 50 lakh in last 2 years. So you see, there is a spectrum at play here.
It depends on the level of skill you possess, just like in software engineering - there are bad engineers, there are average engineers and there are 10x engineers.
It is also true that a full time focus and commitment goes a long way in refining your skillset than any ‘sitting on the sidelines’ effort will. The thing you want should revolve around in your head day in and day out, which makes achievement a reality.
Further, you should view trading as a basket of different business opportunities rather than a single business. Just like mom and pop stores are one kind of business; Google on the other hand is another kind of business. It depends on how you want to take it; and what exactly do you want to do here.
That being said, for a clear benchmarking, instead of comparing your returns with other traders you should probably compare the return you generated this year v/s the return you generated in previous year. Ideally you should have a clear trend visible therein - Returns in Y0 < Y1 < Y2 < Y3. If this is the case, you are sure that you are moving in the right direction; and your skillset is going up with time.
FYI, here’s my equity curve within this FY, hope this helps. You can clearly see the %drawdowns reducing with time, which also signifies skill enhancement which is a continuous process.
When doing this, remember that
the returns might have NOTHING to do with your skill
and can entirely be due to luck (right place right time) or due to the market sentiment.
This is very likely to be the case if a single strategy
(or a small number of strategies) was employed to generate the returns.
Hi,
I have been trading from Oct 2021 but got into full groove only after 2 years and now I can say I am a full time trader. Initially I made losses but regained after quite sometime. Well, I have learnt to invest in momentum good stocks and now doing swing trade and have been successful in making 10 to 20% per month minimum on an investment of 10 lakhs. Buy/Sell the same momentum/volume/breakout stocks. If anyone interested in my strategy please pm me! Thank you.
BMA
this. Trading is NOT a steady income.
