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2,000USD to 2,000,000 USD in 8 years?

  • #1
  • First Post: May 15, 2010 1:20pm May 15, 2010 1:20pm
Hello all, I am a newbie in this forum but not at all new because I've been watching this site for few months before signing up for an account to share this.

What I am gonna share today is my plan to achieve my goal by 25pips a day with a risk of 2% per trade. Could this be possible? I am still wondering and I need advices from the folks here regarding this, before venturing into a live account.

I've been trading DEMO for 2 months and I achieved 3000pips in 2 months time, (after deducting losses). So here goes the plan:

1) 25pips a day (which is not truly hard to achieve with a promising system)
2) Good money management, risking 2% of my equity with a SL of 100pips
3) 25pips a day translate into 500pips a month (25x20), of course there will be losses at times but by trading multiple pairs 500pips is truly achievable IMO, this serves only as a guide/reference, daily return could be > or < than 25)
4) 500pips a month x 6 = 3000pips in 6 months time
5) Every semi-annually, increase lot size by adjusting and following to the golden rule of 2% based on your equity size. (refer to the table)

Could this be possibe? Is this a wild dream? I need advices before I will start venturing into trading live accounts.
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  • #2
  • May 16, 2010 2:35am May 16, 2010 2:35am
Quoting blaw712
1) 25pips a day (which is not truly hard to achieve with a promising system)
Yes, it's possible but that's rather weird aim to set before yourself. It's better not to think in terms of "some pips per day" when you trade. It will lead to overtrading in some cases and to "undertrading" in others.

Quoting blaw712
2) Good money management, risking 2% of my equity with a SL of 100pips
That's a rather bad MM strategy. You'll be risking 2% of your deposit for a chance to earn only 0.5% of it.

Quoting blaw712
Could this be possibe? Is this a wild dream? I need advices before I will start venturing into trading live accounts.
Yes, it can be possible, but I wouldn't recommend that to anyone.
  • #3
  • May 16, 2010 2:40am May 16, 2010 2:40am
At the end of the day, look yourself in the mirror and decide if the risk is something you can accept if you lose everything. Is 2K a lot to you? To some people, it is not.

The key to forex is to always be honest with yourself and not promise yourself things that you can not control. Once you can admit that you are gambling, then you can decide what is acceptable.


The whole question of "is this possible?" is not as important as "is this probable?" Best wishes.
  • #4
  • May 16, 2010 3:01am May 16, 2010 3:01am
The idea of trading x=amount of pips per day at x% risk sounds great on paper but in the real world it doesn't work that way.

In the real world of trading you learn to stay out of the market when it doesn't look to your favor and you take full advantage of the market when opportunity presents itself.
  • #5
  • May 16, 2010 3:36am May 16, 2010 3:36am
3000 is a lot for a 2 month period. I'd be concerned about a false sense of security. Could you have been lucky for these past few weeks?

I don't really know what to say. You might have a keen method for entry and exit that most don't. I personally don't feel great about my own methods, which have averaged 2,700 pips annually for the past 18 years. I simply never trust the market. It's never caring or listening to you, no matter what you think or trade.
  • #6
  • May 16, 2010 4:05am May 16, 2010 4:05am
yes, it is possible. just one thing: don't think daily: i have to make 25 pips today. Just let it go with the flow of the market. Some days you will lose 50 pips, other days you can make 200 pips, so don't have a daily goal. A monthly goal is fine, and calculate your pips at the end of the month, not every day
Twitter: @forexpokerpro
  • #7
  • May 16, 2010 5:35am May 16, 2010 5:35am
Quoting tdion
3000 is a lot for a 2 month period. I'd be concerned about a false sense of security. Could you have been lucky for these past few weeks?
Or put another way, this past few weeks have been a black swan event, not to be confused (or to teach you) about how the market operates most of the time. From 3 May, retailers have been making exceptionally large profits. This is not the norm.
Furthermore, the past 2 months have seen almost all trending and no ranging; chances are your system will crumble when it comes to a ranging period. And... just to add, 3 pips is 12% of 25 pips. That's the spread hurdle you've got to overcome in your edge, which absolutely huge. Don't underestimate it.
And finally, if you're operating with inverse risk:reward, it's all too easy to get confused with the high win rate with a successful method.
In short, if you're asking these questions right now of is it possible doing what you're doing, the answer is a definite no. That's not the same as is it actually possible mind you.
  • #8
  • May 16, 2010 6:03am May 16, 2010 6:03am
25 Pips TP and 100 Pips SL. Haha talking about letting your winneres run and cutting losses short
  • #9
  • May 16, 2010 6:33am May 16, 2010 6:33am
the market doesn't care what you want, think about what the market wants
Invincibility lies in the defence, the possibility of victory in the attack
  • #10
  • May 16, 2010 9:55am May 16, 2010 9:55am
Quoting tdion
3000 is a lot for a 2 month period. I'd be concerned about a false sense of security. Could you have been lucky for these past few weeks?

I don't really know what to say. You might have a keen method for entry and exit that most don't. I personally don't feel great about my own methods, which have averaged 2,700 pips annually for the past 18 years. I simply never trust the market. It's never caring or listening to you, no matter what you think or trade.
Yes I could have been lucky to achieve that in 2 months time. But on back testing with my system it looks like achieving 500pips a month is not at all difficult, ONLY if I follow the rule well. The reason why i achieve that is compounding gains and also the market has been trending in a rather oscillating manner.

I use 3 indicators, MA crosses, RSI and Double CCI crosses on 1H and 4H TF with a set of entry and exit rules
  • #11
  • May 16, 2010 10:00am May 16, 2010 10:00am
Quoting BBPI_fxtrader
yes, it is possible. just one thing: don't think daily: i have to make 25 pips today. Just let it go with the flow of the market. Some days you will lose 50 pips, other days you can make 200 pips, so don't have a daily goal. A monthly goal is fine, and calculate your pips at the end of the month, not every day
Yes thats what I think too, it looks good on draft and papers but on real market when i'm earning 25 pips i will hope for more, and more and that's greed. But achiving 500 pips/month only serves as a guideline. I may be achieving more or even end up with a loss in a month.

The major thing I am concerned is money management, if 2% is a bad MM, then how much should i risk?
  • #12
  • May 16, 2010 10:05am May 16, 2010 10:05am
Quoting triphop
Or put another way, this past few weeks have been a black swan event, not to be confused (or to teach you) about how the market operates most of the time. From 3 May, retailers have been making exceptionally large profits. This is not the norm.
Furthermore, the past 2 months have seen almost all trending and no ranging; chances are your system will crumble when it comes to a ranging period. And... just to add, 3 pips is 12% of 25 pips. That's the spread hurdle you've got to overcome in your edge, which absolutely huge. Don't underestimate it.
And...
Thanks for the advice! Yes the previous months have been trending and that could be the reason of my explosive profits on demo. Could u suggest a better risk reward ratio and money management strategy?

Thanks in advance. I am open to any suggestions/critics/advices and still keen in learning the market everyday.
  • #13
  • Edited 4:13pm May 16, 2010 12:43pm | Edited 4:13pm
Blaw712

In theory it can be done. In reality you have no chance.

It will be a huge success if you still have $2.000 with in a year.

This comes from someone who turned $2.000 to $38.000 within six months and by month 12, had $500 left on the account.

Greed & fear, are a trader's worst enemies. If you can overcome these you should be OK. Money management is also very, very important. On your example it doesn't make sense.

These days with a few more kilos and a few more grey hair, I am happy if I get 5% return a month on my personal trading a/c.

Regards
Nectarios
  • #14
  • May 16, 2010 12:49pm May 16, 2010 12:49pm
I think it was an year ago, and the trading genius in me convinced me that if I can make 20 pips a day, i will make 10% of my account every week and compound that over a period of 2 years, I will have more money than I ever wanted and in 4 years time I will be richer than everbody else in the world.

I tried it on paper for 2 days, and it was working excellent. I traded the strategy in my live account. I actually made more than my target in the first week. Second week, I achieved my target in first 3 days of trading. Third week was also above the mark.

I was on top of the world. My confidence and my ego were flying out of the Milky Way.

I was using Bill William's Chaos trading system on a 15 min chart. I had 15 pairs on my screen, and all I was interested in was finding the saddle point. My day use to start with the Asian session, usually in 2 hours I made the required target.

After 3 weeks, things started to breakup adding frustration and backlag ( it means the short fall in the required number of pips/week). I had also planned this in my original planning. But because of my confidence, I tried to outsmart the market.

I was ignoring 3 important points.
1) Some times Asian session is fast and sometimes it is not.
2) Chaos trading system works best in trending markets.
3) Every pair has its own personality. You really need to know in detail what you are trading.

Anyways after 2 weeks of frustration and large number of pips of backlag I quit. (I was lucky that I had not lost any money on this endeavour, but I still have the opportunity cost).

One more thing, sometimes your trades are right on target and you exit at 20 pips profit only to watch the pair move 100 pips more in the direction of your trade. This was very frustrating on the days you dont make the traget amount of pips. You keep thinking about I should not have exited that trade.

In short, as silverheat said above want what the market wants.
After this, I dont think in terms of % or pips anymore. I just want to make x amount of money consistently month over month and as my account size increases my x will increase.

I suggest you first have 3 consecutive profitable months in your live account, then think about outsmarting the market with some fixed amount of pips/day system. Its hard my friend. By the time you will achieve the above goal, you will not think the way you are thinking now.

Good Luck!!!
Let someone arise from my bones as an avenger. Jesse Livermore
  • #15
  • May 16, 2010 2:02pm May 16, 2010 2:02pm
This is very highly unlikely, but not impossible, so dont let anyone say its impossible... I personally know a guy thats had 900% growth over the last year, and a rock solid money management plan. His growth plan is more aggressive then yours even... This can happen if you maintain the vision, stay disciplined, and have a decent system. Once the beauty of compounding starts to do its work its even more important to be free from the ties that bind... Emotions!

Cheers!

Quoting blaw712
Hello all, I am a newbie in this forum but not at all new because I've been watching this site for few months before signing up for an account to share this.

What I am gonna share today is my plan to achieve my goal by 25pips a day with a risk of 2% per trade. Could this be possible? I am still wondering and I need advices from the folks here regarding this, before venturing into a live account.

I've been trading DEMO for 2 months and I achieved 3000pips in 2 months time, (after deducting losses). So here goes the plan:

1) 25pips a...
  • #16
  • May 16, 2010 2:09pm May 16, 2010 2:09pm
I will discuss more about my trading system after my exams(I am still a uni student). Right now thanks for all the advices given, I really do appreciate them!

Meanwhile if anyone has better money management strategies here please advice, perhaps I am wrong with 2% golden rule?
  • #17
  • Last Post: May 18, 2010 9:05am May 18, 2010 9:05am
Quoting blaw712
Thanks for the advice! Yes the previous months have been trending and that could be the reason of my explosive profits on demo. Could u suggest a better risk reward ratio and money management strategy?

Thanks in advance. I am open to any suggestions/critics/advices and still keen in learning the market everyday.
OK, just briefly - better risk reward ... better for what? RR is just a way of gauging how much you're risking to how much you're getting back, and as such is driven by how much wiggle room your trades needs and how much you expect to get back. Even predicting reward has its pitfalls. The only way you can know what your strategy is capable of is back and forward-testing. Extensively. And then be careful about optimising it.

As for MM, 2% is the roughest rule of thumb until you can do the stats and probabilities yourself. I won't go through it - Van Tharp does a far finer job than I could possibly hope. Good luck!
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