How I will turn $100,000 into $1,000,000 in a month

Seriously, unless you make a decision to actively do something different your trading will never change. having looked at so many strategies, I now realise that the market gives you what you want regardless of what you think you want.

I decided to put my trading skills to the test and take part in a trading contest. My performance is shown below for those of you that maybe a little bit skeptical of what I am saying

http://www.dukascopy.com/traderconte...l&month=201012

I started out reading all the books I could get on trading, applying systems, reading about elliot waves, you know its all rubbish. Roughly 90% of traders look at this and think that just because they read it in a book it works. The likes of Robert Minor, Prechter to name but a few are all selling trading courses seminars and yet I have no idea are these people making any money out of trading. I think that they are not and the reason is that they make money selling courses.

So, my question is why are these guys not mega rich?

I am going to discuss trading in more length and what works and what does not. So the first thing is trend. Most people have no clue what I am talking about, so let me get into the basics.

A trend is lower lows and lower highs, this is a down trend, and uptrend is higher highs and higer lowes. Simple right so lets look at a chart. Now you can see I have flagged the lows and highs in this chart,silver is in a downtrend, You can also see that we have made 5 pushes down, do I want to buy silver? No because it is still down on the daily trend, do I want to sell silver?

Maybe, lets see what it is doing on the Hourly chart.

So on the hourly chart silver is making higher highs (just) and higher lows. This means I am sitting on my hands untill the opportunity presents itself. I want to see silver making lower lows and lower highs, then I am in sync with the daily time frame and hopefully able to ride the market down further.

No indicators they lag, just simple rules to keep you the right side of the market. Now,the acid test is do I push my account to one million, or sit around at $300,000 which is still a very good result for a couple of days work. The answer will depend on the market all I can do is trade the swings. A lot of you will be saying that my money management is skyhigh yes it is, but this is a contest I am taking part in, not a real money account and who is to say that 2% risk is right. Read any trading book about great traders and guys that made millions, you will see they often trade 10% of their account on a single trade.

I think 2% risk is ideal when you don't have a strategy that returns greater than 50% winning trade, because it allows you to be wrong as often as you are right, what sort of strategy is that?

lets not talk about making millions and billions in 15 days or 30 days.coz this is a business and it shud be taken seriously for consistant profit.

I liked your approach to ride trends waiting for more updates.

Look at these threads....talking about millions and billions ended up no where...

You know that you don't need to trade like a lunatic, a realistic approach is 5-10% risk per trade. I know that I was trading aggresively. Look at the trade on the EURUSD though I was using a 60 pip stop, ok trading $500 thats a total risk of $30,000. The account size was $200,000 at that stage so my risk was 15%.

I think that that is a bit large, but 7% is ok as a risk level if you have a good strategy, suppose I risked 7% thats about $250 per point
I will still have made $50,000 on a single trade with a $200,000 account. To put it in real terms a 25% increase in account size.

What blows accounts is unlimited risk, not controlled risk. I intend to scupper a couple of trading misconceptions in this thread, or eat some serious humble pie. Either way its going to be informative.

Mike Haran

Once we break a previous low (green box) its time to be alert to a trade. The signal to enter is a break of the blue line. At this point the market is moving down in accordance with the daily time frame. The stop is set above the last high because this is where I am proved wrong.

Hello , well it is acheivable ,there is nothing that is not possible,but wisdom demands that if we are trading with real money we should go it slowly over a long-term. If you have $100000 I do not see any reason why you should be in a hurry ,even if its 1% or 2% you are able to realize each day you are a hero, because if you are able to do this consistently for 2 to 4 years ,your generation will never lack. I have not said it is not possible to acheive this feat but lets start looking at FX as a business ,have you not asked why most of the Big banks and Finanacial houses,hedge funds have survived over many economic cycles just think about it, Most of them operate with far far far above $100000 but they do not try this sort of thing,most of them have the best experts in their team but they do not try this sort of thing ,not that they cannot acheive it but because they have realized that their is a road less travelled and they have chosen to follow that path.

2. Well if I may add one or two more things , if you are setting targets do not set it in days ,setting it in days or months has a way of making you be underpressure should you have a string of days that fail to produce the desired result. I am talking from my little experience . Instead set your targets in Trade set ups. You can say I am looking at 40 winning trade set up to acheive my target or 100 winning trade setup. a winning trade set up may come up in say 5times in a week, atimes you can have days with no set ups at all. If the you are able to catch much set ups that fall into a month thankGod and move on but do not force your formular into a month ---it leads to frustration.

3.ELLIOTWAVE Well I read you condemn elliotwave trading ,well I am not saying this to earn any brownie point.but I have this to say I strongly advice any one who wants to succeed in forex to see elliotwave as the 2nd course to take after mastering your candlesticks. If it does not work for you ,then there are lots of things you are missing out. I personally cannot give any trader who does not include or use elliotwaves my hard earned money to trade with. Elliotwave shows you the skeleton of the market and any system that does not comply with it must surely crash...it is not a curse. The market appears in two phases , the impulse and corrective phase . Most traders do not know how to identify the begining of an impulse wave and the end of it .Most traders do not know that it is possible for you to know where and when an impulse wave will stop with a very high precision, most traders, do not know when the market is in a corrective phase, most traders to not know the alternation rule that exist between wave 2 and 4.Most traders do not know when their is a wave extention and the rule that follows it. Most traders try to sell when they see a perceived Highest High not knowing that an impulse wave is yet to complete. I wonder how any trader on earth will try to succeed using fibonnacci ratios without elliotwave.I also wonder how a trader will try to trade chart patterns with success without elliotwave in mind. I now see the reason why most traders will mistake of identifying wave A and B in a forming triangle as an inverted head and shoulder or as a head and shoulder in the making. 99% of traders loss their money during the complex wave correction phase because the charts get messy and it only takes great skills to survive during this wave phase and the loss rate is very high because This phase occur more often than even an impulse wave phase on a hourly or 30min chart and so many traders to start with do not know when this sets in and most indicators have been known to have less succeess during this phase. even in a simple corrective phase . So I am not surprised when people condemn elliotwave . If you have been trading without the wave principle you are only lucky but I do not know how long this will last .Most market Gurus do not like talking about the wave principle because that is the SECRET they guard it with all jeolousy its only few of them who come to share this hoarded secret. With Elliowave you will even know where the fundamentals are headed before the news release which other system can give you that edge? If there is any hedge funds that is operating without the wave principle you just have to run out of there very fast. Please to condemn the principle outrightly as what is only possible in hindsight is not only hasty but wrong.

Hope you win a prize

so what value exactly your thread brings to FF? unless you post some live calls i can't see any at this moment.

I also intend to educate those of you that want to be educated. I will actually call my trades here in the forum, as well, or you can just look in my blog because you can see where my entries are. Most of my orders are entry orders.

I currently have a couple of running orders, but just look at my blog page because you will see what I am doing, it will be quicker for you as well. Feel free to mirror my trades, but you do so at your own risk.

My blog link
http://www.dukascopy.com/traderconte...trader=Fraqtal

I also posted a strategy I use most Friday nights, it is one I use in my real account and I trade it with real money. Its good have a look, you will learn something.

Yeah, elliott waves are the holy grail. With that you know things before they happen, a real chrystal ball. I bet the elliott wave theory called the financial crisis, the nuclear fallout in japan, the unrest in middle east and maybe some other disaster. What a wonder.

Please don't present a theory as being something more than it is. We are not in an astrology session where everybody can predict the future. We are in a trading forum where we are going about probabilities. Elliot wave theory may have its place in some approaches, but it's not the holy grail or ultimate edge you present it to be. And saying that without the elliott wave theory you are just lucky is just a bs statement.

And please refrain from posting sentences like this: "Most market Gurus do not like talking about the wave principle because that is the SECRET they guard it with all jeolousy its only few of them who come to share this hoarded secret"

It makes you look like somebody who either wants to sell something about elliot waves or a simple idiot.

I studied elliot waves for years, they are good after the fact, but they cannot predict except in hindsight. I do agree with you on the retracements and impulse wave, this is useful, however my studie of wave fractals lead me to conclude the idea of a 5 wave being the end of a trend is NOT true. Let me show you some examples.

As to the speed of growth of an account, it is my analysis that we as traders do not do the right things. I have not read any trading books that tell you how to actively trade the markets. many books on technical analysis, nothing on actually trading. Trading the real markets and trading a demo are chalk and cheese. In the real world stops get taken even though prices never trade there. Broker simply widen spread, idiots like Robert minor telling you to put your stop above the 1 bar high, simply smack of giving to the broker , "Would you like me to buy your porsche for you sir". It is amazing how many books I see on trading writtern by people working for broking firms. Yeah of course they are not going to give you the correct information, they want your money.

Elliot waves will lose you money hand over fist, it is not the way to trade especially on the smaller time frames. maybe daily or weekly they mean something, but intraday, you might as well give your broker the money.

By the way, I like your general trading approach. I would like to know how you are planning on exiting trades / trade management.

cheers

The one thing you have as a trader is trend. That is your edge. The next thing is support and resistance, that is your second edge. Candle sticks are useless they mean NOTHING, candles from different brokers depending on time frames look different so the same market gives different signals huh, useless.

But, at the right points ie support and resitance levels you can see how price reacts, here candles mean something. So what do I look for, firstly the trend has to be going in the direction I want to trade, secondly I look to trade currencies that move and don't range. The daily trend is indeed your direction finder, it points the way.

There are 100's of ways to enter the market, breaks of resistance, pull backs, what is critical is stop placement, this was my biggest mistake in trading I always tried to get in with a tiny stop and the largest position I could muster. This will clear your account faster then DYNOROD, stops are called stop loss for a reason, they are there to prevent loss not incur them so ask yourself where has price not gone, usually a resistance level and that is where your stop goes, if that is a 200 point stop then adjust your $ per pip, never set a stop at random just to get a low number. Use the market to tell you where it does not want to go.

Ok its late and time for dinner more on Monday morning.

A good weekend to you all


Mike Haran

Mike,

Long time no talk. I trust that all is well with you.

Anyway, my 2c, and to keep it (reasonably, LOL) brief:

Agree with you about EW, have never been able to make it work for me. However some claim to have success with it; good luck to them. One mistake folk make is that they think tools that work well with equities will perform similarly with FX; IMO, it makes no sense, as the market infrastructure, dynamics, heavyweight player agendas, etc are completely different.

Agree about trend and S/R being among the trader's best weapons. Pair the strongest currency against the weakest to catch the strongest, cleanest trends. Support is more likely to hold (at dips) in uptrends; resistance is more likely to hold (at minor peaks) in downtrends.

Agree that different time zones create different candle shapes, but candle highs/lows can show rejection of key areas, and shapes can give good approximation as to buying and selling pressure. Large candles (on M5/M15/M30 charts - and if further accompanied by high tick volume) can denote heavyweight activity, and hence frequently signpost the beginning of moves, and also their impending exhaustion. Long wick hammers or outside bars following a decent move highlight sudden shifts in momentum. Suitable candles at overbought/oversold areas, S/R levels, or prior supply/demand, occasionally signpost turning points. The key is not being overly pedantic about the candle itself, but viewing it in context and understanding what it represents.

I'm happy to use tight SLs at points of higher-than-normal-probability reversal (e.g. strong S/R confluences). Or, more precisely, set my SL point first then set a limit order entry near the SL, anticipating something approaching a double top/bottom. If price fails to retrace far enough to the entry point, at least there's no loss. If the trade gets stopped out, the loss is trivial. The tight SL often allows a quick move to BE, and a free trade. And with a 5-20 pip SL, I can hold for some 50-200 pip wins for high RR (many pairs have an ADR of > 100pips); allowing me to stay well ahead even with a low win rate. Nowhere near as easy as it sounds, though, of course.

One thing I've learned: The best that entry can ever do is help kickstart a trade toward BE. After that, whatever the 'power' inherent in the pattern that started the move, it is gradually overtaken by a zillion imponderables; I've yet to find a way of telling whether a move will last 5 pips, or 500 pips. In other words, one can only assess the 'quality' of any setup by what happens over the next couple of candles.

Of course we are talking probabilities only. No system is perfect; there is way too much randomness in price movement. Potentially, it takes only one large order to upset even the most 'perfect' technical strategy.

Personally, I feel comfortable keeping my risk per trade at 1%; but I acknowledge that much depends on frequency of opportunities. A proficient scalper might make a decent monthly ROE with low trade risk; whereas a position trader may feel the need to risk more, to compensate for restricted opportunities. Having said that, I believe that risk management should be prioritized over setting targets. Risk is a double edged sword, and if one is falling behind one's monthly goal, what other 'remedies' are there apart from either increasing risk per trade, or overtrading?

The table below illustrates why I believe in conservative sizing. For example, at a 60% win rate, there's a 14% probability of encountering 7 consecutive losses in every hundred trades. At 10% risk per trade that would represent irretrievable drawdown for most of us. And the 14% doesn't include sequences like L-L-L-W-L-L-L-L-L, for example, where the losses still outnumber the wins by 7, and therefore deal comparable damage. And that is just the math; it assumes nerveless execution regardless of recent results. Still, risk is a personal thing: each to their own. I am arguably too conservative.

Best of luck, my friend, when you reach your $1m next month you can buy me an e-drink! Keep us posted on your progress. I shall bookmark this thread.

David

I totally agree with you in what you say, risk management is crucial and as to putting your stop to break even it is amoung the most effective methods of running a trade.

As to exit points in the market, this is a clear and hard rule that sadly I cannot follow in the contest. There are no exit points, this is the one thing I learned in trading, let the market give you the money, unless you know where the market will stop then you deserve to stay in your trade as long as it goes in your direction. As soon as the market tells you it is going to reverse you can exit. How does it tell you it is going to reverse, well usually it moves in the opposite direction and then fails to take out the previous low in a down trend and high in an up trend.

For sure you lose some of the move while you watch your position go slightly negative, but that is made up for on the great moves that just carry you along for 1,000's of pips. Look at the USDJPY fall to see how long moves can last.


All the best


Mike Haran

ruffryders
Caeynne Turbo S


EURUSD
This is especially for you, what the chart is indicating to me is that I should now be on my guard about the trend in the EURUSD being in an uptrend. Simply because this correction is greater in time and price then any previous corrections. You can see I have marked the resistance points on the chart, 2 touches mean something more than one touch.

So I would expect resistance at these levels however once these levels are broken I would expect some sort of retrace up, because that is what markets do. The question is then how far up we go?

At the moment the EURUSD is on my watch list for a potential trend reversal.

Next up is a chart of USDCHF, this is interesting for two reasons firstly it is at historic lows, and secondly it is behaving differently, it is breaking past resistances. Potentially looking like a change in trend is underway, again a market to watch closely when it falls back and it will, of that you can be sure.

Lastly the AUDUSD has made a sell signal set up, as I am biased to a top in commodities due to my cycle work, I do think we are at the top of some magnitude and we are in for a large decline. The AUDUSD is a commodity currency and it will suffer on the back of declining commodity prices. The zone I have marked is my critical level, this is where you are most uncertain, is this a simple correction or the start of a much larger decline. At this point in time I have no idea, a break of the critical zone will tell me all I need to know. As it is looking like a massive dollar rally, my bias is that it will blow my critical level away. Lets go to the hour chart of the AUDUSD.

Here we get a very well defined set up

Sell AUDUSD @1.05193
STOP 1.05981
UNDEFINED PROFIT TARGET

Once the AUDUSD hits my critical level I put my stop to cover my position, so I am in a risk free trade. I have no idea what it will do at this level, I don't want to take a loss, at the same time this could be a wild ride down so I don't want to take a profit either. I could play 2 contracts, close one at the critical level and set the stop to break even on the second, this way I can have my cake and eat it.

So my strategy is to sell 2 contracts at 1.05193 close one 100 pips from entry and set the stop to break even on the second position. You can see the stop placement on the chart below.

Really? On my list it's on the potential momentum acceleration towards 1.37.
http://img717.imageshack.us/img717/6094/euforks.png
http://img852.imageshack.us/img852/193/euew.png

All the options levels down to 1.37 are strong put levels, no call levels at all. The downmove on euro was set off at an important date for May options settlements. I'm not saying that options affect currency pricing, however they serve at a strong trigger for big moves, such as the one we saw early in May.

It will accelerate and downmove is only picking up momentum right now.
Also since you like technicals, euro's quarterly pivot this quarter is 1.3760, so that's where the train is headed full on right now.

So what does that mean for me personally? I will look to only short sell rallies and look for sup turn to resistances now.

Good work we are both of the same opinion, I see you are using elwave, nice work and certainly good analysis.


All the best


Mike

I now see your problem,.......incorrect wave count ,disregarding extentions in the wave structure and impatience to learn .When you go round you will still come back. I will not say much.

Firstly,

I never want to knock anyone for their ideas or beliefs. Just because I cannot do something does not mean its not possible. Part of what trading has taught me is never close your eyes to the possibility that someone knows something you don't.

Just because I have an opinion does not make it correct, there are many negative people on this forum, who are just to happy to have a go at others because they have issues with themselves. I welcome everyone onto this thread, please respect other peoples ideas and opinions, even though they might not agree with yours. Everyone has the god given right to be wrong.

Humility, I am always open to ideas so please post your analysis using elliot waves, all I ask is that you do it before the market makes its move. In this way we can all learn.

A trade I am actively looking at now is the CHFJPY, I look at close data as it removes the noise and enables you to see price movement more clearly.

Why does it look good.

1) It is in a down trend
2) Resistance

So my strategy is to wait until the Monday morning rush is over and wait for a reaction, here I will look for some indication of a reversal. I am going down to the 5 min chart to look at the way price is moving in this zone. What I want to see is a break out pull back then my entry goes in once the market has pulled back, under the low. For those of you that want to see my trades in real time, use this link.

http://www.dukascopy.com/traderconte...trader=Fraqtal