400% in 9 Weeks? What is a Typical Annual Return When Trading Contracts For Difference Or CFDs?
As a general rule people are lured into trading Contracts for Difference or CFDs as a result of the incredible annual returns some people make and the relative ease with which they do it.
It seems as if trading CFDs is the golden path to riches that everyone has been waiting for.
Unfortunately, there is not one single endeavor where the rewards are so high that the most successful people do not get there without hard work, sacrifice and a dedication to being the best.
Despite the amazing returns that some people make trading CFDs you need to be totally aware that your annual return when trading CFDs will most probably be a lot less.
CMC Markets ran a trading competition and gave away $100,000 first prize to the trader with the highest return on investment over a nine week period.
Now this article is about a typical annual return when trading CFDs and the figures I'm about to quote from Eva Diaz's CFD Book Titled Real Traders 2 are certainly not typical.
In fact these are the best traders in Australia.
After nine weeks the final leader board tally looked like this:
79% over a short 9 week period, which means the annual return would effectively be through the roof.
Please keep in mind that the 10 people listed above what we would refer to as extreme examples.
So what type of annual return can you expect when trading CFDs? If you're just starting out that you will be well advised to trade very, very small and concentrate on gaining confidence with your trading plan as your first port of call.
There is an old saying in the stock market that if you look after the downside, the upside will take care of itself.
Nothing is truer than when you are trading without leveraged product.
When you are starting out it is okay to be conservative and aim for a 10% return at leveraged and consider for a moment that if you traded at 2 to 3 times your account size then that 10% return at leveraged to would equate to a 20 to 30% return cash or cash.
For example, if you had $10,000 cash and you traded at three times your account size then you would have total positions of around $30,000.
If you made a 10% return on $30,000 that would mean you've made a $3000 profit and your return on your initial cash of $10,000 would be 30%.
Always remember when trading at leveraged product both the wins and losses can be larger than normal.
As a rule you want to trade cautiously until you have a proven system that has a positive expectancy.
It seems as if trading CFDs is the golden path to riches that everyone has been waiting for.
Unfortunately, there is not one single endeavor where the rewards are so high that the most successful people do not get there without hard work, sacrifice and a dedication to being the best.
Despite the amazing returns that some people make trading CFDs you need to be totally aware that your annual return when trading CFDs will most probably be a lot less.
CMC Markets ran a trading competition and gave away $100,000 first prize to the trader with the highest return on investment over a nine week period.
Now this article is about a typical annual return when trading CFDs and the figures I'm about to quote from Eva Diaz's CFD Book Titled Real Traders 2 are certainly not typical.
In fact these are the best traders in Australia.
After nine weeks the final leader board tally looked like this:
- Dave Limburg - 441.
79% - Nichole Page - 408.
59% - Andrej Jancik - 399.
73% - Michael Kwong - 387.
84% - John Mittelheuser - 220.
49% - Assad Tannous - 180.
86% - Craig Page - 166.
02% - Glen Bennetts - 165.
53% - Lan Dang - 146.
68% - Robert James Bell - 145.
4%
79% over a short 9 week period, which means the annual return would effectively be through the roof.
Please keep in mind that the 10 people listed above what we would refer to as extreme examples.
So what type of annual return can you expect when trading CFDs? If you're just starting out that you will be well advised to trade very, very small and concentrate on gaining confidence with your trading plan as your first port of call.
There is an old saying in the stock market that if you look after the downside, the upside will take care of itself.
Nothing is truer than when you are trading without leveraged product.
When you are starting out it is okay to be conservative and aim for a 10% return at leveraged and consider for a moment that if you traded at 2 to 3 times your account size then that 10% return at leveraged to would equate to a 20 to 30% return cash or cash.
For example, if you had $10,000 cash and you traded at three times your account size then you would have total positions of around $30,000.
If you made a 10% return on $30,000 that would mean you've made a $3000 profit and your return on your initial cash of $10,000 would be 30%.
Always remember when trading at leveraged product both the wins and losses can be larger than normal.
As a rule you want to trade cautiously until you have a proven system that has a positive expectancy.