$500 to $18m in 5 years...fact or fiction?
Hi all,
VERY IMPORTANT NOTE: The following is just a theory. In reality, it might be extremely difficult, if not impossible, to execute it in live trading without the enemies of trading getting involved, i.e. Greed, Fear and Hope. But nevertheless, it is possible.
I've been around in this forum for quite some time. And I see most people trying to make a system tht should generate 1000 pips or 2000 pips per month, and try to enter every possible move. But the fact is, if you want to make $18m in 5 years, all you need is discipline and 100 pips per month. Don't believe me? Read on....
Assuming that there are 20 trading days a month, 100 pips would be an average of 5 pips per day. The choice of the system is your's. It doesnt matter if you do day trading or positional, if you do 1 trade or 100 trades, all you need is a system that can consistently make 100 pips for you every month.
RULES:
1) You need a system that can make 100 pips consistently every month per lot.
2) Opening balance would be $500
3) Trade is done only in mini lots
4) 0.1 lot is allowed for every $500 balance. So if you have $1000 you can trade 0.2 lots and if you have $5000 you can trade 1.0 lots and so on.
5) Emotions like Greed, fear and Hope have to be barred out.
6) Once you make 100 pips in a particular month, you are not allowed to trade till the month is over. So even if you make 100 pips in 2 days, you cannot trade for the entire month then.
RESULTS:
After 12 months you will have $3,100
After 24 months you will have $26,000
After 36 months you will have $230,100
After 48 months you will have $2,050,300
After 60 months you will have $18,278,700
Suprised eh?
So maybe you'd say no system can make 100 pips consistenly per month. OK, let's say if you were right. Would you agree with me that it's comparatively easier to make 10 pips per month? Even if you target 10 pips per month, you would yet end up with $1.8m in 5 years using the same methodology.
I remember Igor saying this in one of his TSR audio tutorials, trading is like painting a canvas, you should step back and try to look at the bigger picture than a trade or a single day alone. It is so true.
So get rid of your greed and trade with nothing but common sense. Plz see the attachment for the break up of gains per month.
Regards,
kevinyou'll be flamed for posting this, but it's 100000000000% true. compounding interest is a wonderful thing! there are size limitations as you increase, at which point you change to a direct interbank feed. but it's only as limited as your own mind will allow.
i know that most of the brokers allow a maximum of 50 standard lots does any one know if there is any broker who allow more..keeping in mind the same leverage lets say 1:200...thanks
Hi all,
VERY IMPORTANT NOTE: The following is just a theory. In reality, it might be extremely difficult, if not impossible, to execute it in live trading without the enemies of trading getting involved, i.e. Greed, Fear and Hope. But nevertheless, it is possible.
I've been around in this forum for quite some time. And I see most people trying to make a system tht should generate 1000 pips or 2000 pips per month, and try to enter every possible move. But the fact is, if you want to make $18m in 5 years, all you need is discipline and 100 pips per month. Don't believe me? Read on....
Assuming that there are 20 trading days a month, 100 pips would be an average of 5 pips per day. The choice of the system is your's. It doesnt matter if you do day trading or positional, if you do 1 trade or 100 trades, all you need is a system that can consistently make 100 pips for you every month.
RULES:
1) You need a system that can make 100 pips consistently every month per lot.
2) Opening balance would be $500
3) Trade is done only in mini lots
4) 0.1 lot is allowed for every $500 balance. So if you have $1000 you can trade 0.2 lots and if you have $5000 you can trade 1.0 lots and so on.
5) Emotions like Greed, fear and Hope have to be barred out.
6) Once you make 100 pips in a particular month, you are not allowed to trade till the month is over. So even if you make 100 pips in 2 days, you cannot trade for the entire month then.
RESULTS:
After 12 months you will have $3,100
After 24 months you will have $26,000
After 36 months you will have $230,100
After 48 months you will have $2,050,300
After 60 months you will have $18,278,700
Suprised eh?
So maybe you'd say no system can make 100 pips consistenly per month. OK, let's say if you were right. Would you agree with me that it's comparatively easier to make 10 pips per month? Even if you target 10 pips per month, you would yet end up with $1.8m in 5 years using the same methodology.
I remember Igor saying this in one of his TSR audio tutorials, trading is like painting a canvas, you should step back and try to look at the bigger picture than a trade or a single day alone. It is so true.
So get rid of your greed and trade with nothing but common sense. Plz see the attachment for the break up of gains per month.
Regards,
kevinYepp this is the dream -- looks easy doesn't it! 
It is so true!
Everybody must read the first post of this thread.
May be those who will read it will have a second tought on trading.
Every beginer "walks" into this world thinking he will become rich over night but most of them end up losing all their money. Greed, fear, stress, impatience, lack of knowledge and lack of discipline are the trader's worst enemies.
What do you choose?
1. to be stressed out every day, trying to win as much as possible and end up losing
or
2. to be relaxed, knowing that you have 20 days to win 100 pips.
Of course, if you are really good you can choose the 1st option and win... but if you are in the other 95% of traders, the 2nd option is way better. I hope this will change your approach to trading.
Be patient! There is no rush!
I like this!
I like this! Even if one were not disciplined enough to do this with their major account, they could open up a second account and trade only this way with that account while doing their normal trading with their main account.
What do you choose?
1. to be stressed out every day, trying to win as much as possible and end up losing
or
2. to be relaxed, knowing that you have 20 days to win 100 pips.
!A live example of #2 is SoulTrader's Grail blog at http://grailtrading.blogspot.com/ 10k to 80k so far. A good example of growing an account and dealing with the drawdowns as well. He doesn't worry about day-to-day or even month-to-month, he just knows that the odds are in his favor.
Kev,
That is one of the best posts i've read so far! Two Thumbs UP
The math is simple enough, you average 30% gain per month for 5 years. Problem is, in real life you have drawdowns, changing markets, systems stop working and other things, not withstanding the the risk profile which you adopt is linked with your money management stratergy, of which there is no mention of in your post. I would not trade 1 lot at $5000 equity, if you have say a 50 pip stop loss in your stratergy you are risking about 10% of you equity per trade, 10 of those in a row and...
Your right about looking at the big picture, but it's the details which will bankrupt you & until you have all these thing worked out to the last detail, I would not trade a cent.
I produced an excell calculator to play with different combinations of starting account and percentage gain per month. The calculator is based on a very conservative 5% risk model. You can change the opening balance and the percentage gain per month to calculate the compounding effect.
If nothing else, it's another way to see the bigger picture.
I of course recognise the realitiies of trading and drawdown.
Have fun!
Hi guys,
I have seen a few posts and have recd a few pms telling me that I've overlooked the fact that there would be a drawdown in equity and that wht if there is a loss in a particular month, then the whole calculations would go wrong, etc etc.....
What I should inform you that this is NOT A TRADING SYSTEM. This is just a strategy to be used on the trading system that you are confident about. If your system cannot make 100 pips CONSISTENTLY every month per lot for 60 months, then this strategy is not for you.
Plz refer to the 1st rule that I posted at the start of this thread
Also,
So to sum it up, this strategy is not for everyone. If you can fullfil all the rules, then only you have a shot at being successful using this strategy. A break of any of the rules would mean that you shouldn't use this strategy.
Let's work on making this dream strategy a reality.
Kevin
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Hi all,
VERY IMPORTANT NOTE: The following is just a theory. In reality, it might be extremely difficult, if not impossible, to execute it in live trading without the enemies of trading getting involved, i.e. Greed, Fear and Hope. But nevertheless, it is possible.
I've been around in this forum for quite some time. And I see most people trying to make a system tht should generate 1000 pips or 2000 pips per month, and try to enter every possible move. But the fact is, if you want to make $18m in 5 years, all you need is discipline and 100 pips per month. Don't believe me? Read on....
Assuming that there are 20 trading days a month, 100 pips would be an average of 5 pips per day. The choice of the system is your's. It doesnt matter if you do day trading or positional, if you do 1 trade or 100 trades, all you need is a system that can consistently make 100 pips for you every month.
RULES:
1) You need a system that can make 100 pips consistently every month per lot.
2) Opening balance would be $500
3) Trade is done only in mini lots
4) 0.1 lot is allowed for every $500 balance. So if you have $1000 you can trade 0.2 lots and if you have $5000 you can trade 1.0 lots and so on.
5) Emotions like Greed, fear and Hope have to be barred out.
6) Once you make 100 pips in a particular month, you are not allowed to trade till the month is over. So even if you make 100 pips in 2 days, you cannot trade for the entire month then.
RESULTS:
After 12 months you will have $3,100
After 24 months you will have $26,000
After 36 months you will have $230,100
After 48 months you will have $2,050,300
After 60 months you will have $18,278,700
Suprised eh?
So maybe you'd say no system can make 100 pips consistenly per month. OK, let's say if you were right. Would you agree with me that it's comparatively easier to make 10 pips per month? Even if you target 10 pips per month, you would yet end up with $1.8m in 5 years using the same methodology.
I remember Igor saying this in one of his TSR audio tutorials, trading is like painting a canvas, you should step back and try to look at the bigger picture than a trade or a single day alone. It is so true.
So get rid of your greed and trade with nothing but common sense. Plz see the attachment for the break up of gains per month.
Regards,
kevin