A Dream Scheme... (Don't waste your time)

Disclaimer: I am not a newbie. I understand that forex is not a get rich quick business. I have one account that has a slowly rising equity… It used to be REALLY slow, but I promised myself I would start out an account small, so that I could train myself to trade consistently and not focus on the money I was making. That said, forex has become boring, which hopefully means I will be successful in the long run. Still, I am human and addicted to the foreign exchange, so while my “real” account gets traded with perfect setups and discipline, I’m looking to basically gamble in a different account… so I bring up this idea for the masses of veterans, nay-sayers, and everyone else to rip apart. Please do… like I said, I’m bored with my “real” account. Oh yeah… if you search my posts, you’ll see that I can’t even keep up on my journal here, so judge the idea, not what you think of me… Thanks!

1. This is only to be traded with $1000 of throw away money. That may sound irresponsible, but I routinely have big sales in some personal business dealings that allow me this luxury… I realize this is not possible for everyone. But still, it may be worth demoing to train your mind how to deal with it emotionally.
2. The set-ups, signals, or systems are not important here. I don’t care how you trade. To be honest, I don’t know what approach I would take yet. This thread is more about riding a lucky streak to glory.
3. Ok – this will be a ten trade process… and we are going to assume we are right 10x in a row. The stop loss would be set at 100, as well as the take profit. Let the criticisms fly!!! Alright, so I’d deposit $1000. I would only trade a USD/xxx pair, or AUD/USD or NZD/USD… basically a pair in which I could trade a full lot or 10 mini’s with only $1000 in the account (check with broker to see if I would have a minimum margin, in which case, I may need to deposit a little more $$$).
4. Using whatever method you employ, start trading one full lot for every $1000 in your account, shooting to double your account with every trade (100 pip take profit).
   1. Trade #1 - $1000 increased to $2000
   2. Trade #2 - $2000 increased to $4000 – pull $1000 for another shot when this scheme fails (unless of course you win 10x in a row)
   3. Trade #3 - $3000 increased to $6000
   4. Trade #4 - $6000 increased to $12,000 - pull $4000 for another 4 shots when this scheme fails (unless of course you win another 6x in a row)
   5. Trade #5 - $8000 increased to $16,000
   6. Trade #6 - $16,000 increased to $32,000
   7. Trade #7 - $32,000 increased to $64,000
   8. Trade #8 - $64,000 increased to $128,000 – pull $28,000 for another 28 shots when this scheme fails (unless of course, you win 2 more times in a row!)
   9. Trade #9 - $100,000 increased to $200,000 - pull $100,000 for another 100 shots when this scheme fails (unless of course you win 1 more in a row!)
   10. Trade #10 - $100,000 increased to $200,000
   11. BANK IT!!! …or bank it anywhere along the progression, depending on your situation… this is personally, where I’d bank it

5. End result after 10 successful trades in a row: $200,000 in the bank (minus fees, commissions, slippage, etc.) and $133,000 of play money to give it another 133 tries at duplicating it! In essence, if you are right twice, you bank $1000 and have another shot at doing this again. 4 times, and you'll have 5 more shots. If you are right 8 times, you will have 33 more shots, and if you are right 9 times, you will have 133 shots at getting to $200,000.

In summary, like I warned, it is a crazy dream to think this is regularly possible… but any successful trader knows that their perfectly disciplined system has produced longer streaks than this… even with a better risk to reward ratio than 1:1. If anything, a 1:1 r/r should help this scheme out as compared to say, a 1:3 system. Again, this is just a shot at being right 10x in a row, and by no means is a long term system. For an experienced veteran, this may be possible to wait for perfect set-ups over the course of a year. NEWBIES and DREAMERS: THIS IS THE WORST EXAMPLE OF MONEY MANAGEMENT YOU WILL EVER SEE… NOT TO MENTION A NEGATIVE EXPECTANCY SYSTEM!!! Reread the capitalized line as many times as necessary.

I open myself to public humiliation and scrutiny. Let it begin…

Is it like a full moon or what - tonights posts are hilariuos...

I've never been right 10 times in a row in anything. Hell, even when I argue with myself my win rate is random.

Pro: if you're right twice and you pull the 1000, you haven't lost anything.

Con: it's hard or impossible to trade well under extreme stress.

If you can consider the money "gone" and have no stress over thoughts of losing $16,000 or $32,000, go for it. I'd be rattled when I placed that trade for the whole thing knowing it was all or none.

10 times in a row - calculate your odds based on your trade log. I've had a great month so far with only 3 losing days, but I haven't been right 10 times in a row.

It's just an idea. So much for constructive criticism... thanks for your much needed input.

I've had winning streaks higher than 10, a few times. Of course, my initial take profits aren't 100 pips away either.
I am not delusional... I understand that results will always be random, and all we can do is hope to tip the balance in our favor, with a positive expectancy, and good money management. That wasn't the focus of this thread though.

Thank you for your reply. I appreciate the lack of blatant arrogance that is sometimes thrown around these threads.

I agree with your pro AND your con. It is very hard to trade under stress. I suppose if you were right a few times in a row, the emotions associated with giving it all back would play a major part in your trading decisions. Still, to be right 10 times in a row has so much luck involved with it already, so what difference will stress make?

The odds are very overwhelming... but, I guarantee there's plenty of pro's on here that could make 10 straight trades with the given parameters, if there was no time limit placed on them.

Like I said, watching my real account build so slowly is agonizing, but the smart thing to do if I am going to stay in the game. I usually get 1-2 signals per day, but didn't get any since the week began yesterday, so I figured I'd post.

By the way, if I did get up to $16,000 or $32,000, I'd probably pull it and run... but I just wanted to see where 10 straight trades would get me.

The key number to these kinds of systems seems to be when you withdraw from profits more than initial investment. At this exact moment, you already have a successful trading system.

In your case that would be after successful trade #4 since you would have $5,000 in the bank on a $1,000 investment. No low-leverage system would ever see those kinds of returns in less than a year.

Having said that, isn't it still gambling (but isn't anything that involves more than 0% risk?) on the premise that you will enter with a winning streak instead of losing your first trade?

I don't think it's ridiculous at all to get 4-10 successful trades in a row, but I would personally find it difficult to reach predetermined profit targets given the huge leverage employed. I'd end up moving my S/L to breakeven + 1 in many trades and thus would need more than 10 trades to realize those profits in the perfect situation.

But hey, if you have $50-100K in capital... is 1-2% of your net worth really that large of a risk? I'd guess that most people have lost 3-5% from their retirement accounts in the last month alone.

The more intriguing option would be to ignore the actual numbers following the dollar sign and build a strategy where you shoot for percentage growth. Given even $10,000 of capital, a person could start an account with $100 and 50:1 leverage and use your method.

This is weird. I was discussing this exact same idea with a friend last week. My plan was to start with $500 and not withdraw any cash along the way. My profit target would be 128k in 8 trades.

To illustrate my point I decided to toss a coin and see how many times it landed on heads. The best I got was 4 heads in a row.... but hey, once I stick on all my fancy indicators my chances aren't 50/50 any more are they? hummm

If your trading higher timeframes, then 100 stoploss isnt the way to go and neither is 100 TP. Your limiting yourself and would most likely fail in that sense. If you were to trade on a weekly chart, or even a daily, price can easily go against you 100 pips only to move back through and then you would have made 500. That kind of take profit, in the long run, is limiting you.

This type of MM is interesting. Many would argue that it could be paving the way towards bad habits. Now that that's been said and you've already pointed out the dangers etc, I'd suggest starting with $100. Still a very decent payout with less risk. Also, the emotional hurdles would be a little more manageable. I've read legitimate storie of big players who use these strategies knowing they'll likely have only one or two big wins in a year. It's important to point out that though they are risking huge sums, those sums are only a small part of their capital and their many losses are of little consequence (to them).

I've had several runs with 7 or 8 winning trades, but never 10. I'd have to settle for less.

I understand completely. My real trading incorporates multiple lots, with different profit points. The last profit I let ride, and do not move up the stops until a new channel has been formed. This allows me the greatest opportunity to catch trends and let my profits run.

This scheme, however, is not intended to be a smart way to trade... it's just straight-up gambling.

Thanks... that's not a bad idea about starting with less. Also, thanks for noticing that I was well aware of the bad habits this could start.

Seeking Light,
1. I published this in the discussion forum. It's not a trading system, and it's not a journal. It's a discussion. Do you have a better suggestion on where I should "discuss" this?
2. Regardless, of whether it is gambling or not... it is part of forex... and if gambling wasn't part of forex, then REAL traders wouldn't prosper as much. I don't understand your statement.
3. Scrutiny is part of the discussion, isn't it?

You're right. I do need the attention. ...Even if it's negative - thanks for it. You'd think I was a middle child...

*I by no means, anywhere stated that I was going to show the world I could do it. If I needed that kind of attention, I would have directed you to my upcoming trades.

Thank you to everyone who has respected me and not tried to make me look like an idiot here. If anyone wants to discuss this further, feel free... I will try to ignore any further direct or indirect attempts at making me feel inferior.

You seem awful thin skinned for a person that is gonna try to make an attempt at this. You are gonna need cajones for something like this.

There is an EA for your system - if it works out give oksana17 a tip.
http://www.forexfactory.com/showthre...68#post1824568

Only thing I would consider is trading more than one lot from the beginning? Get a ridiculous high leverage like 400:1 and make your trades double after only 10-20 pips. Really it should be around your trading style. It's going to be uncomfortable enough managing the money that it should at least fit in your style.

Of course you also have to be careful with leaving money in your account in case the trade goes against you and wipes out all the money you had pulled out from previous trades.

I tried something like this using 400:1 leverage last few weeks. From $1k to $5k then i blew up my account.

It's just too hard for me to not look at the numbers. Greed and fear overcomes you. Unless you are a very very strict disciplined person, of which i am not.

Anyway, good luck for anyone trying this.

Thanks for the response Perm...
Let me make sure I understand this correctly, as I've only ever traded 100:1. My mentor always taught me that trading any higher is disastrous and too tempting when we are first starting, as well as not needed if we follow proper MM and get to "the next level."
So with 400:1 and risking $1000, you wold be able to trade 4 full lots with a TP and SL of 25? ...I'm thinking about this correctly, right?

Thanks... this is exactly the reason I started this thread. I'm sure I would end up doing the same thing... probably quicker than you did.