What's a good percentage return for an EA?

New comment
 
We have to be carefull, because in the process of trading we are risking capital. Banks pay a paultry 2% for the priveledge of using our money for a year (CD Rates), but thanks to the FDIC, our original capital is secure. I really feel some of these robots being hawked on the internet which show you can triple your money in one month. Sounds good and sure I've bit, but as we all know it's a matter of time until they explode. But what should we expect for our hard work? If we are going to rack your brain to develop, build and test a system what should we expect, 10, 20, 30% per year? If we could really do that consistantly, we should be runing a trading desk in a large institution. I recently read that up to 73% of Wall street Firms use computer driven 'black box" systems for their trades. And they seem to be knocking down some good scratch (more from TARP funds and Bonuses than actually trading profits). But I would like to get some response, what would be considered a good return?
 
Yentrader2:
[...] But I would like to get some response, what would be considered a good return?

It's arguably the wrong question. Summarising their views very crudely, a majority of the institutional investors I know work on the basis that you can achieve any level of percentage return using leverage, and they are instead concerned with risk versus return. A presentation is terminated immediately if it starts with a percentage return rather than something like a Sharpe ratio. (EDIT: with obvious exceptions such as normal onshore retail mutual funds in the UK, where leverage can basically be taken as a constant.)

New comment