Compounding to Riches

This trading style is developed from commodity traders back in the 80's who made millions compounding positions into massive gains by using internal position financing to double positions at regular intervals.

I am going to start small and fish for big movements in pairs and as my profits grow so will my positions.

Example:
4/21/2002 Enter EUR/USD Trade

EUR/USD Trade at .9000 size .01
EUR/USD Trade at .9100 size .01
EUR/USD Trade at .9200 size .02
EUR/USD Trade at .9300 size .04
EUR/USD Trade at .9400 size .08
EUR/USD Trade at .9500 size .16
EUR/USD Trade at .9600 size .32
EUR/USD Trade at .9700 size .64
EUR/USD Trade at .9800 size 1.28
EUR/USD Trade at .9900 size 2.56
EUR/USD Trade at 1.0000 size 5.12
EUR/USD Trade at 1.0100 size 10.24
EUR/USD Trade at 1.0200 size 20.48
EUR/USD Trade at 1.0300 size 40.96
EUR/USD Trade at 1.0400 size 81.92

1/12/2003 If we sold all at 1.0600 Profit = $655,360.00

4/6/2008 If we stopped adding to
Positions and help on till 2008
Selling all at 1.6000 Profit = $8,192,000.00

This will take a lot of luck but we only need to catch one big run and the volatility of the forex market could allow this to happen very quickly.

To find the right pairs we are fishing with pairs that have come off all time highs or lows and start betting on the turnaround. Ideally I am looking for pairs that have an alltime high and low difference of 6000 to 10000 pips.

First Fish

Long GBP/CHF Price 1.6847 S/L 1.67370 Size .01

Second Fish

Long GBP/JPY Price 150.36 S/L 148.42 Size .01

This market is one of the faster moving markets and offers larger potential returns with higher risk.

Second Fish Killed. Probably too volatile of a market for my experiment. Will keep an eye on entering at better support level. Still trying to play with first fish hope I can multiply next week. I don't enter new trades on NFP Day.

Dont do this with GJ...stay with EU or US Cad

I like these two markets but they are both reaching new highs and lows and haven't shown much of a turn yet. At these historic levels I don't want to jump on the trend I would rather ride it back the other way.

Pyramiding doesn't work if you double up your positon. Your break even price will always be pretty close to the current market price that will kill you.
If you don't calculate the distance between your Levels carefully you'll easily get margin called on a retrace.

Gold is hitting new highs today, but with inflation all time highs are more around the 1500.00 an oz mark. That is an incredible opportunity and the current trend isn't showing much of a chance of stopping. Trying the experiment on the XAU/USD.

Current trades
1100 - .01
1110 - .01

Also first fish is still alive but floundering.

GBP/CHF .01 - down 5 pips now.

I am out of my original plays so far.

New Fish

Long USD/CHF Price 1.0065 S/L .9975 Size .01

Long USD/CHF Price 1.0065 S/L .9975 Size .01
Long USD/CHF Price 1.0085 S/L .9975 Size .01

current positions in XAU/USD
1100 - .01
1110 - .01
1120 - .02
1130 - .04

current positions in XAU/USD
1100 - .01
1110 - .01
1120 - .02
1130 - .04
1140 - .08

Long USD/CHF Price 1.0065 Size .01
Long USD/CHF Price 1.0085 Size .01
Long USD/CHF Price 1.0105 Size .02
Long USD/CHF Price 1.0125 Size .04
Long USD/CHF Price 1.0145 Size .08
Long USD/CHF Price 1.0175 Size .16

It keeps going and going and going.

Gold Positions
1100 - .01
1110 - .01
1120 - .02
1130 - .04
1140 - .08
1150 - .16

Long USD/CHF Price 1.0065 Size .01
Long USD/CHF Price 1.0085 Size .01
Long USD/CHF Price 1.0105 Size .02
Long USD/CHF Price 1.0125 Size .04
Long USD/CHF Price 1.0145 Size .08
Long USD/CHF Price 1.0175 Size .16
Long USD/CHF Price 1.0195 Size .32
Long USD/CHF Price 1.0215 Size .64

xau/usd

Gold Positions
1100 - .01
1110 - .01
1120 - .02
1130 - .04
1140 - .08
1150 - .16
1160 - .32
1170 - .64

Estimated Profits $1,200.00

I believe after the holiday weekend Gold is going to rally through 1200.00

Gold Positions
1100 - .01
1110 - .01
1120 - .02
1130 - .04
1140 - .08
1150 - .16
1160 - .32
1170 - .64
1180 - 1.28

Gold Positions
1100 - .01
1110 - .01
1120 - .02
1130 - .04
1140 - .08
1150 - .16
1160 - .32
1170 - .64
1180 - 1.28
1190 - 2.56

Estimated Profits = $5,120.00

Gold Positions
1100 - .01
1110 - .01
1120 - .02
1130 - .04
1140 - .08
1150 - .16
1160 - .32
1170 - .64
1180 - 1.28
1190 - 2.56
1200 - 5.12

Estimated Profits = $10,240.00