What do you consider an average return (profit)

[Jason28]

Hello, sorry for all of the topics I just like to share ideas and ask questions :) I was wondering to all of the middle class online traders out there, what do you consider to be a good return on a stock? I hope that I am wording it correctly since I am still new to trading. Basically I am asking if you consider $100 - $200 profit in a day on a stock to be considered average? I got lucky on a few stocks and earned about $50 - $150 profit while others were in the red -$20 to -$50. I wonder if you guys hit $1000+ in a day for stocks or not since I want to know if that is a realistic goal. Thanks :)

[Albert0373]

A good return is one where you don't see any red ;)

[netwrangler]

If you can beat the S&P500, you are generating a good return.

If you can do that consistently, you are missing your calling. You should be a fund manager.

[Navivest]

Well first of, if you made money in a trade where others lost money, then that's a good return. In general though, to answer your question would require knowing how much your trading capital is.

If you buy a stock, spend $10,000, hold for three months, then $100 is a lousy return generally speaking. But if you could earn a hundred a day on a total capital of $10,000 and you trade 50 weeks out of the year, you just made $25,000, tripling your portfolio! So again it depends.

On stock trades, if we bought a stock yesterday and we're looking to get out today, assuming we're getting out because trade objectives were met as opposed to dumping because the trade is going the other way on us, we target a min of 2 percent.

That's not to say you'll hit that every time. Some times, you'll be very glad to exit with a $100 profit. Other times as in recent days, we've traded solar and financial stocks and had several of them turn in from 4-12% in one day, spread across the portfolio.

$1000/day is very realistic - assuming your capital is large enough. If you shorted RIMM today on the earnings that was released after market close, the stock looks like it could be down $10-13 tomorrow, a thousand shares will net you 10-13k before commissions tomorrow. But it would have cost you ($140 [approx. share price today]*1000 shares)*.5 or $70,000

In these whipsaw markets that we are having, take your small early profits, grow your capital and then move on to your next profit goal. Best of luck.

Navivest
http://www.navivest.com

[freakscene]

I wonder if you guys hit $1000+ in a day for stocks or not since I want to know if that is a realistic goal.

That is unrealistic and should not even be a thought in your head at this stage of the game.

I forget the percentage, but its something like 60% of a serious professionals day trades are losses. (i know someone out there will correct me :) ) They thrive off the other 40%.

Albert and Net gave very good answers.

I will add, protect your starting capital and learn how to minimize losses by only entering proper set ups, and placing tight stops.

[Albert0373]

Instances of hitting $1000 in a day:

-$5,000 position overnight, spikes up 20%.

-$10,000 position, ride a 10% spike

-$50,000 position, ride a 5% move

-$100,000 position, ride a 1% move


You see, the more capital you work with, the easier it is to make a set amount relatively. For now just trade slowly and work yourself into the field.

[aiki14]

Average returns are that of the indexes, the broader the index the more it accurately reflects the average. The Wilshire 5000 will give you about the broadest index for US equities.
http://www.wilshire.com/Indexes/Broad/Wilshire5000/
It is down over 10% in the last year and over 15% off the all time high of oct 2007.
I look for 2% per week in my portfolio, of which around 15% is traded actively. I have managed an actual return of 1.88% on average per week for the previous 36 months during which I have traded 105 out of 156 weeks. I spend 80-100 hrs a week involved in market activities when I am trading. I spend a lot of time decompressing when I am not trading.

[madcowdisease]

Average returns are that of the indexes, the broader the index the more it accurately reflects the average. The Wilshire 5000 will give you about the broadest index for US equities.
http://www.wilshire.com/Indexes/Broad/Wilshire5000/
It is down over 10% in the last year and over 15% off the all time high of oct 2007.
I look for 2% per week in my portfolio, of which around 15% is traded actively. I have managed an actual return of 1.88% on average per week for the previous 36 months during which I have traded 105 out of 156 weeks. I spend 80-100 hrs a week involved in market activities when I am trading. I spend a lot of time decompressing when I am not trading.

Great returns, Aiki, congrats!

To answer the OP's post I usually shoot for a 20% gain. However, it all depends on how the stock is behaving. If some news comes out or a series of analysts raises guidance considerably -- consider steel lately -- I may ride it longer. On the other hand, if it turns against me halfway through that gain I have no problem booking 10% as the technicals breakdown. I try to limit my losses to 8% per position also depending on the volatility of the stock, but 8% is a rule of thumb for me since I play a lot of mid-caps.

WallStreetsEdge has a great trading philosophy for phasing out of positions. It may not be applicable to you - it isn't to me. He deals with much larger blocks of stocks whereas I can usually get out after a round lot or two.

[Jason28]

Ok thanks for the informative posts :) The thing that sucks is that I placed a sell on RIMM the other day but it didn't hit until the next morning when the stock plumeted so I lost $150 on it. A good lesson to learn though to make sure to sell before the market closes.

[wallstreetsedge]

for me, i dont really have an average gain.. i take profits right away so its hard to give a % amount

[smartinvestor30]

If you can beat the S&P500, you are generating a good return.

If you can do that consistently, you are missing your calling. You should be a fund manager.



If you trade for a living and are only slightly beating the S&P then I think those are bad returns. An individual can move in and out of positions much faster than an institution, keeping that in mind you can see how beating the S&P by a little is not really that great. Double the S&P or triple, now we're talking.