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Abhijit,
I see your point that if one can make a much greater ROI when managing a
small fund than a huge amount of capital.
In fact, any thing is possible in the market place. Some market wizards
claims to have several hundreds percentage a year. One needs to keep in
mind that these are rare individuals and they have already gone through
their development and training, NOT when they started out. The market is
full of opportunities to let you make a lot of money, IF you have
prepared and trained yourself to take advantage of them. Given a
certain amount of capital, the most important factor is the trader.
There are many experienced and successful traders in this forum. For
those starting out as new traders, the people, who want you to attend
their $3000+ trading/investing seminars, would tell what you like to
hear (Human nature, we only hear what we like to hear). They will show
you the promise of 100% ROI or more easily. All you need to do is to
attend their seminars (However, most people find that their trading is
no better after the seminars.) That is one of the reasons why so many
people have the notion of very high ROI's.
If one starts out a new traders and really have the love for the art of
trading, here is the naked truth about trading that most people don't
want to hear. Linda Raschke, one of the market wizards, advised,
"Understand that learning the markets can take years." I would add: Be
prepared to make 0% ROI for the first two years. I mean, no money,
period. And that is better than the average trader (Wow)! Use the time
to FOCUS on training and developing oneself as a trader [#], as one
would do to become a doctor and lawyer. If one happens to make a lot of
money the first year, that is great. Even after one becomes good at the
art of trading, targeting for 50-100% ROI a year is a great goal and
possible. However, I would not count on anything >50% ROI for my living
expenses.
On the time frame of trading, day trading does not necessarily mean
higher ROI. Moves of significance take time to develop. I find my best
trades lasts for days or weeks. Many new traders want to do day
trading. There is nothing wrong with day trading, but it requires
higher levels of mental skills than swing trading or position trading.
Harrison
# Here I mean work on your inner world, your beliefs, your mental
skills, your systems and money management, not about learning how to use
TradeStation.
Abhijit Dey wrote:
David Colin wrote:
Appreciate yours & Jimmy's comment so far. But I still isn't
convinced that 20%+ stock traders are that good. I realize size
makes a difference. I would say my arguments stand for accounts
under a million.. But this is the matter for discussion anyways.
Since taking control of Berkshire Hathaway 39 years ago, Warren
Buffet has delivered compound annual return of 24%. I think *he's*
pretty good, no?
(Source: Forbes magazine)
DF
You bet. But he isn't daytrading his billions. According to this,
http://beginnersinvest.about.com/cs/warrenbuffett/a/aawarrenbio_2.htm
he made 250% non compounded in 5 years, when he was starting out. I am
not too sure about the validity of figures in this web page - but
would be pretty safe to assume he made some killer returns while
managing mere millions. Hear nowadays he mostly cries that there's
nothing left to buy. Now THAT's a problem.
Abhijit
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