Social Media, specifically Twitter (FinTwit), is such an odd place and there is so much shilling going on it is rather shocking at times.
Is there quality content on there from some highly successful traders? Without a doubt, yes!
You often see "I turned $100 into $100,000 in 45 days" shit on there. Is this possible? Of course it is and I believe when it comes to trading and investing there are no limits for the most part. However, context, as with everything in life, is crucial when it comes to these things.
If one started with $250 and say they were able to make a 100% return on each trade, it would 'only' take 13 trades to reach $1,000,000. That's going 'all in' and full account on each trade. Does that sound realistic? If you have a system or strategy that can do that, you would not be reading this, or writing such nonsense on Social Media.
So some key factors that are needed for context are as follows:
What is the win rate of the strategy
What size is the average win and average loss
How much of the account would be risked per trade
When trading options and futures and the risk-defined leverage that they offer, some amazing things can be accomplished. While the above may sound like a hater, getting double digit monthly returns on an account on a consistent basis is VERY achievable and should be the goal for traders and those looking at alternative investment ideas.
I submit exhibit A below
The average monthly returns, especially on the lower end of the spectrum, are not a stretch whatsoever with the proper execution and discipline. So let's look around the mid-point of the data and use an Average Monthly Account Return of 25%.
To achieve a 25% monthly return (on an account), the following is ONE example of the way that could be done with a system without a high win rate and nominal risk per trade:
Trades per month: 50
Average Account Risk Per Trade: 2%
Wins per month: 25
Win rate: 50%
Average Win: 150%
Average Loss: -100%
This is well within reach and obtainable and after 1 year would produce a compounded return of over 1,300% on an account. Now of course compounding is non-linear. Having a goal as such, there will likely be a few losing months, just as there will be months where the returns are greater than 25%.
The point to all of this is whether you are evaluating your own strategy, or looking for a strategy to follow (one of ours or others out there), clearly define your goals, as this helps to not only manage expectations, but also the ability to weather drawdowns of a system when they do occur.
While the strategies we are offering to the public are still relatively new (3.5 months tracked), the average monthly returns to-date, along with the projected annual compounded returns are as follows:
Pure Alpha: Monthly Average 52%, Annual Compounded Projection: 15,110%
Hedge Fusion: Monthly Average 26%, Annual Compounded Projection: 1,501%
Futures Focus: Monthly Average 32%, Annual Compounded Projection: 2,698%
With this, they are more designed for clients to double their size per trade (compound) each time their starting Risk Budget is achieved in gains.
Good Trading.....
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