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What do you think is a good trading return for equities?

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Old 15-04-2019, 05:50 PM   #1
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What do you think is a good trading return for equities?

10 - 20% per trade????
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Old 15-04-2019, 07:46 PM   #2
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I say enough to feed you and your family with a little for building up passive income would be a good return for trading.
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Old 15-04-2019, 07:56 PM   #3
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The question presumes that every trade is a winning trade, which is impossible.

Furthermore, you did not mention the risk for each trade. You will blow up in no time if you make 20% on your winning trades but lose 25% for those that do not make it.

What is your question leading to? Ultimately, what is your goal?
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Old 15-04-2019, 08:24 PM   #4
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10 - 20% per trade????
The return per trade isn't a good metric. A high-frequency liquidity provision strategy is going to have minuscule returns per trade - a fraction of a tick on average - but across a lot of trades; a long-term buy-and-hold strategy will have much larger returns per trade, but fewer trades.

The right benchmark is an appropriate equity index - the STI if you're trading Singaporean equities, the S&P 500 if you're trading US large-caps, the MSCI World if you're trading absolutely everything... and don't forget to include dividends!

If you can't beat an equity index + dividends (adjust for volatility if you like), then that's a sign that your strategy isn't that great.
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Old 15-04-2019, 08:47 PM   #5
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Shiny is right.

Long term investing with index stocks can already achieve 10% pa.

For individual stocks investing, you should aim 15-20% pa in the long term.

For short term trading, your account must grow 30-40% pa in the long term.

If you can't beat 30-40% pa through trading, you are better off working delivery at foodpanda or grab.
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Old 15-04-2019, 09:26 PM   #6
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Shiny is right.

Long term investing with index stocks can already achieve 10% pa.

For individual stocks investing, you should aim 15-20% pa in the long term.

For short term trading, your account must grow 30-40% pa in the long term.

If you can't beat 30-40% pa through trading, you are better off working delivery at foodpanda or grab.
I find people with large capital will have advantage when doing index. For poor dude like me, I will need more return in order to compound faster

Last edited by Trader11; 15-04-2019 at 09:30 PM..
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Old 15-04-2019, 10:15 PM   #7
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I find people with large capital will have advantage when doing index. For poor dude like me, I will need more return in order to compound faster
It doesn't matter high or low capital.

It's the performance that counts.

If you can perform with low capital, you can scale your skills with higher capital.

And to need high returns with small capital is not the correct approach. Your performance shouldn't be dependent on the size of capital.
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Old 15-04-2019, 10:36 PM   #8
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Shiny is right.

Long term investing with index stocks can already achieve 10% pa.

For individual stocks investing, you should aim 15-20% pa in the long term.

For short term trading, your account must grow 30-40% pa in the long term.

If you can't beat 30-40% pa through trading, you are better off working delivery at foodpanda or grab.
Your second line is an exception rather than a norm. 10% pa is a lot to just put money in the markets and do nothing. The last 10 years it has been easy. But I won't expect 10% pa in the next 10 years. No way.

Going forward, if you get 5-6% pa, it is great.

Last edited by revhappy; 15-04-2019 at 10:39 PM..
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Old 15-04-2019, 10:55 PM   #9
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Your second line is an exception rather than a norm. 10% pa is a lot to just put money in the markets and do nothing. The last 10 years it has been easy. But I won't expect 10% pa in the next 10 years. No way.

Going forward, if you get 5-6% pa, it is great.
You should be looking at longer term returns.

https://www.thebalance.com/rolling-i...d-2009-4061795
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Old 15-04-2019, 11:06 PM   #10
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I find people with large capital will have advantage when doing index. For poor dude like me, I will need more return in order to compound faster
Yeah, but the line between "small capital" and "large capital" is higher than you think. It's pretty hard to imagine a strategy that would become capital-constrained anywhere less than about $10mio AUM (though I'd love to be proven wrong here!)
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Old 15-04-2019, 11:34 PM   #11
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I find people with large capital will have advantage when doing index. For poor dude like me, I will need more return in order to compound faster
Focus on your day job and try to increase your income. Dont focus solely on saving/investing. There is only so much you can save/generate returns from investment. But there is always room to increase your income, that is usually low hanging fruits rather than trying to take high risk with your money.
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Old 16-04-2019, 07:09 AM   #12
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Your second line is an exception rather than a norm. 10% pa is a lot to just put money in the markets and do nothing. The last 10 years it has been easy. But I won't expect 10% pa in the next 10 years. No way.

Going forward, if you get 5-6% pa, it is great.
Not everyone will get the average returns because they enter in different phases of the market. The 10% return is just a general guideline.
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Old 16-04-2019, 07:48 AM   #13
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Short term trading returns need to beat long term investing returns and I think that one needs to achieve at least 15 to 20% on a year on year basis. Otherwise one might as well sit back and just do passive etf investing. Short term trading is a lot of hard work. Intraday scalping maybe not so much if one has a methodology of focusing on only momentum stocks - setting a screener to identify such stocks to trade on a daily basis to automate some of the menial work. However, intraday scalping requires one to have a greater level of price action reading and execution skill to be successful. One would also need a capital that allows one to minimise the transactional costs as a % to efficiently trade else, your edge would just be eroded by brokerage commissions.
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Old 16-04-2019, 08:01 AM   #14
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Short term trading returns need to beat long term investing returns and I think that one needs to achieve at least 15 to 20% on a year on year basis. Otherwise one might as well sit back and just do passive etf investing. Short term trading is a lot of hard work. .
Shouldn't this be dependent on volatility? In times like this when vix is artificially subdued due to massive stimulus, it is no brainer that just being long on the index wins.

If markets were not so distorted, then you could go long/short and make money. Now it is just follow the fed. Don't fight the fed, mantra. It is better to just either stay long or stay out and wait for the Armageddon.

We have so many hedge funds who did well in the past are now closing down, because it just doesn't work in this type of markets.
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Old 16-04-2019, 09:16 AM   #15
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Shouldn't this be dependent on volatility? In times like this when vix is artificially subdued due to massive stimulus, it is no brainer that just being long on the index wins.

If markets were not so distorted, then you could go long/short and make money. Now it is just follow the fed. Don't fight the fed, mantra. It is better to just either stay long or stay out and wait for the Armageddon.

We have so many hedge funds who did well in the past are now closing down, because it just doesn't work in this type of markets.
It really depends on how you adapt your trading strategies to the prevailing market conditions. I had a good run with counter trend trading strategies over the last few months while my swing trading did not work as well as compared to the prior years. Nowadays, I do not classify strategies or adapt them with the type of market conditions. I went back to basic price action and volume analysis and when there is a trade, I would take it in the direction of the trend or countertrend if there are no discernible trends. Basically, identifying support and resistance point and deciding if they provide me a good level to base my stops. I also screen entries based on volume spread analysis - what was the background, and what demand and supply bars are telling me of the state of the market and if there is a trading opportunity with a risk reward skewed in my favour. Something which did not suit my personality prior - breakout trades - am now taking them as I found VSA techniques helped me decide if they may be genuine or otherwise. I do not pay much attention to MACD or general indicators as much but when they point to a buy and the market sold down instead, I would be interested as it means many may be trapped.

What you are saying is more a macro approach but there are always exceptions. VIX may be low but there are individual stocks that have high volatility. eg - the volatility spiked when Kellog and Coke were sold down after earnings, I took a countertrend trade at the bottom with good result. Quick 2 or 3 days trade when volatility was high and thereafter, it quietened down.

Fed action may dictate short to med term directions but their track record is at best 50-50... that accounted for their about turn on rates just not too long ago. So react to Fed action but by no means, use it as leading indicator. They react to the economy and if you read the data releases, you can also formulate your own opinion and frame your perspective.... there appears to be an expectation that things are slowing down but if you look at the recent data, the run has been lest bad than feared or there are some signs of pickup in activities.... so that provides some imput to short term trading decisions... coupled with a market which has not shown any serious signs of supply as yet, the path of least resistance appears to be higher for the short term.
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