I have decided to rewrite the intro to try and simplify what I am doing without the essay
I built this system from attempting the rags to riches thread:
http://www.forexfactory.com/showthread.php?t=444377
Start with 2 accounts (or a bank account and a trading account) called the "Principle" and "Trading" accounts.
The Principle account has "Levels" as follows-
$100
$200
$400
$800
$1600
etc.
The Trading account deposit always begins at 10% of the current Principle account Level.
So if at the start the Principle account has a balance of $250 the current Level is $200. We withdraw $20 (10% of current Level) and deposit into Trading account.
From here we attempt to achieve +3 net trades (3 more wins than losses, not wins in a row) of 2:1 R:R trades, risking 50% of the Trading account for 100% reward.
As such-
Trading account
Start deposit: $20
1*Net Win = $40
2*Net Wins = $80
3*Net Wins = $160
We will trade the account until we hit either +3 net trades or until it hits -1 net trade. If the Trading account gets to -1 net trade ($10 in this example) we reimburse the trading account from the Principle account (so withdraw $10 from Principle and deposit into Trading account to bring the Trading account balance back to $20).
Once our goal of +3 net trades has been achieved we will withdraw our profits from the Trading account and deposit into the Principle account minus the deposit to start the next series.
Trading Account:
Balance-
$160-$140 (leaving $20 to begin the new trading series)
$20
Principle Account:
Balance-
$250-$20 (initial withdrawal for Trading account deposit)
$230+$140 (successful +3 trading series)
$370
Once the Principle account hits either the next Level up or down (so in this example $400 to the topside or $100 to the downside) the Trading account deposit will also be adjusted to 10% of the new Level.
So that's about it. Any questions please ask away. If anybody decides to give it a whirl I would be interested to know how they go.
Cheers and GL,
Matt.
.........................................................................................
Example:
Here's a system test against a compounded 1% account. Settings are at 1% risk (5% will need to be entered to test the system at my explained risk) with 40% win/loss rate, (both adjustable).
The same Test but with a +2 Net trade Take Profit scenario
Edit 18/8/18: I have come across an interesting quirk. If you choose to trade 1 account rather than 2 (an easy thing to do as long as you keep on your trade levels) your 2:1 trades can have have a greater risk in lot size vs leveraged account balance.
I am used to a 60-80 TP with a 30-40 SL because that is all my account will accept on leverage of 1:500 but if my full balance is in the one account I am able to scalp 20 pips for a 10 pip SL (for the scalpers out there). A word of warning on this as usual however, if a blackswan event happens or even just some random news spikes your account (with a less than perfect broker, which is almost all) it could devastate an account.
I built this system from attempting the rags to riches thread:
http://www.forexfactory.com/showthread.php?t=444377
Start with 2 accounts (or a bank account and a trading account) called the "Principle" and "Trading" accounts.
The Principle account has "Levels" as follows-
$100
$200
$400
$800
$1600
etc.
The Trading account deposit always begins at 10% of the current Principle account Level.
So if at the start the Principle account has a balance of $250 the current Level is $200. We withdraw $20 (10% of current Level) and deposit into Trading account.
From here we attempt to achieve +3 net trades (3 more wins than losses, not wins in a row) of 2:1 R:R trades, risking 50% of the Trading account for 100% reward.
As such-
Trading account
Start deposit: $20
1*Net Win = $40
2*Net Wins = $80
3*Net Wins = $160
We will trade the account until we hit either +3 net trades or until it hits -1 net trade. If the Trading account gets to -1 net trade ($10 in this example) we reimburse the trading account from the Principle account (so withdraw $10 from Principle and deposit into Trading account to bring the Trading account balance back to $20).
Once our goal of +3 net trades has been achieved we will withdraw our profits from the Trading account and deposit into the Principle account minus the deposit to start the next series.
Trading Account:
Balance-
$160-$140 (leaving $20 to begin the new trading series)
$20
Principle Account:
Balance-
$250-$20 (initial withdrawal for Trading account deposit)
$230+$140 (successful +3 trading series)
$370
Once the Principle account hits either the next Level up or down (so in this example $400 to the topside or $100 to the downside) the Trading account deposit will also be adjusted to 10% of the new Level.
So that's about it. Any questions please ask away. If anybody decides to give it a whirl I would be interested to know how they go.
Cheers and GL,
Matt.
.........................................................................................
Example:
Here's a system test against a compounded 1% account. Settings are at 1% risk (5% will need to be entered to test the system at my explained risk) with 40% win/loss rate, (both adjustable).
Attached File(s)
Capital Weightlifting 6.xlsx
652 KB
|
701 downloads
|
Uploaded Sep 19, 2015 3:08pm
The same Test but with a +2 Net trade Take Profit scenario
Attached File(s)
Capital Weightlifting +2 net trade.xlsx
735 KB
|
500 downloads
|
Uploaded Nov 12, 2015 1:41am
Edit 18/8/18: I have come across an interesting quirk. If you choose to trade 1 account rather than 2 (an easy thing to do as long as you keep on your trade levels) your 2:1 trades can have have a greater risk in lot size vs leveraged account balance.
I am used to a 60-80 TP with a 30-40 SL because that is all my account will accept on leverage of 1:500 but if my full balance is in the one account I am able to scalp 20 pips for a 10 pip SL (for the scalpers out there). A word of warning on this as usual however, if a blackswan event happens or even just some random news spikes your account (with a less than perfect broker, which is almost all) it could devastate an account.
As the lights go by so too do the shadows move