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- #1,194
- Jan 5, 2023 1:41pm Jan 5, 2023 1:41pm
- Joined May 2010 | Status: Trader | 1,188 Posts
Olarion1975, I noticed your Pip Counter in the bottom of your Charts is double zero's and thought you may not have settings / inputs correct, if you search for Pipometer 5 Indicator and upload I have attached the settings for your information. cpfleger {image}
- #1,196
- Edited 4:26pm Jan 5, 2023 3:57pm | Edited 4:26pm
Opportunities are everywhere, well done Guys. cpfleger
I also want to apologize for my lack of clarity when explaining the challenge guidelines in my first post, here are the full details:
1) We enter one position at a time (we don't use cost averaging for the challenge). The main purpose is to reach our target using our first entry point.
2) We target the 20 EMA, just as we do normally with cpfleger's approach and we also place a stop loss using the same pip distance we use for our take profit. For example: If the 20 EMA (our take-profit) is 30 pips away from the entry, our stop-loss should also be 30 pips away so it's symmetrical.
3) We use our position sizing tool to adjust risk according to our target distance and make sure we either make or lose 30% of our current balance for each trade. Please note that this should be an automatic calculation of the tool as it'd be too distracting and time consuming to do manually.
4) Each consecutive win is a new step in the "wins in a row" column. For example: If we already have 7 wins in a row our balance should be $622, if we make a new trade we either win or lose $186 which corresponds to 30% of the current balance. If we have 17 wins in a row our balance should be $8,558, a new trade from this balance would win or lose $2567 (that's the 30% of $8,558). A trade using these rules should look like this:
If we make 24 consecutive wins we beat the challenge and our final balance should be around $53,694 thanks to the high risk/reward compounding of 30% per trade. And yes! this is VERY hard to do but attainable with a very high win-rate (note: please use demo to experiment with this). A loss would move us down one step (or row, if we are using the table as reference). We can decide when to stop the string of trades and "take" our total compounded profits in a real scenario and then start over from $100:
Some people say this allocation strategy is risky because it's a well known fact that 2% per trade is the safe standard to avoid a string of losers (bad luck) from blowing an account. However, if we think a bit deeper and be open-minded we can imagine having $10,000 USD to trade in the bank and using only a fraction of it as initial balance, let's say 1% ($100), and then we risk 30% of that 1% for the first trade ($30), we are really risking 0.3% of the original balance in the bank and our max risk from a string of losing trades is still the original 1% ($100) of the whole $10,000 account (very small). I hope that's not a confusing explanation.
Let me know what you think! It's a very tough (and fun) challenge.
