what is a good average return?
i have some thoughts on this, and would like to hear comments from others as well. i am a "lone wolf"....trading at home with my 11 month old son, so i dont talk with many other traders.
as for me, i have a goal of 1% per day, which is 22% per month compounded. since starting in jan 1999, i have compounded at a rate of 35% per month...well exceeding my ambitious goal. the latest months returns have even accelerated, but i do not expect it to continue.
the problem is, the market was really good, and i know it is not sustainable. started with $5700 and now over $300,000 (i have taken some $ out)....it is an IRA so no taxes need be paid so most of the gains stay in the account. i am now finding that 300k is much tougher to trade than say 50k or 100k
i always wondered what $ amount would get cumbersome..... 300k seems to be that point for my trading style. when the $100 stocks were in bull markets i suspect that $1,000,000 could be effectively traded...but not in this market.
as for symmetric distibution, i am clearly on a tail. i think there is an asymmetric distribution of returns....biased upwards due to the market's bias upward, and generally people are long.
however, distribution of returns could also be damn near symmetric AND on the negative side of zero. (traders defined as non investors...but speculators) there just isnt the data to support either theory. |
