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Rags to Riches in 10 or 20 Trades - Simplicity at its finest

  • #581
  • Edited 6:21pm Oct 2, 2013 5:40pm | Edited 6:21pm
Quoting Owl
{quote} ..... it looks good... it sounds good.... lets see what it do.....
Try it, it's the only way I trade, on this high risk account or my normal account.

You will find those areas are where the big market moving orders are and you can often be very accurate with your entrys, often to the pip, or a few pips.
  • #582
  • Oct 2, 2013 6:05pm Oct 2, 2013 6:05pm
Making another thread to show how I trade low risk account for consistent SMALL profits.


(like $30 a day on a $10,000 account)


The key is where you will be 5-10 years down the road if you can stay this consistent.



It can work with FIFO too, its just not as good.
Be hopeful in a winning position, and fearful in a losing position.
  • #583
  • Edited 6:24pm Oct 2, 2013 6:13pm | Edited 6:24pm
Quoting cuchuflito
{quote} Problem is 75% winning Ratio goes to the Broker and big Banks...this is all dreamland... 25% winning Ratio is the normal retail Performance... wanna bet?

lol, using a certain type of money management doesn't make up for being a bad trader


i know traders with 80 and 90% win ratios over 1000s of trades


im not saying everyone can do this.

im just putting into numbers how fast profits can go if you can just stay consistent (win 2, lose 1 type approach) and learn to use the leverage your broker gives to you.


any business in the world can be new the top dog, all they have to do is KEEP SCALING UP. however the more you scale up the more difficult it becomes. it becomes harder to grow and that is no different in Forex. using Rag2Riches MM, you can't really scale up over $1 million, you dont get the same leverage with that kind of money.

nor should you want to because, you could return only 0.1% PER WEEK and over 40 years you would have over a $10 million retirement.

or just go for 1% a week and you would hit 10 million within 5 years or so


honestly 100k is a good cutoff point for rag2riches MM.. 500k-1million you just dont have the leverage to do it (unless you want to use 250 pip stop and 500 pip target)
Be hopeful in a winning position, and fearful in a losing position.
  • #584
  • Oct 2, 2013 6:34pm Oct 2, 2013 6:34pm
Quoting GDR3k
A set up I had been waiting for since last week was missed today by .001 of a pip on USDJPY @ 97.145, it would of gone on and doubled my account too, terrible!! The next set up is a short on EURUSD @ 1.3624.
thats too bad, i try to put my order just above round numbers like 10,15,20.. for 97.15 i would have 97.16 (spread)

the good thing is you were right with the trade idea.

I missed my short at 3610, should have put it 3609.. although that still might have missed.
Be hopeful in a winning position, and fearful in a losing position.
  • #585
  • Oct 2, 2013 10:05pm Oct 2, 2013 10:05pm
Quoting GDR3k
{quote} Yeah thats the plan, I'm going for the very best entries, areas where price was contricted then moved away from it with conviction and has not returned to that level since. I look on most timeframes for these areas of contriction, which in a nutshell is usually a spinning top before a large move away in the opposite direction, so for example a bullish spinning top right before a large bearish move down (like the below chart), and vice versa. Look on EURUSD for example, the 4hour charts, my pending sell order at 1.3624 is what...

nice planning


i sure hope you got filled :/
Be hopeful in a winning position, and fearful in a losing position.
  • #586
  • Oct 3, 2013 1:38am Oct 3, 2013 1:38am
Quoting Rag2RichesFX
{quote} nice planning i sure hope you got filled :/
Missed my order by about a pip, this happened to me last week when there was a daily support pivot a few pips above an area where I had a buy order (in this case, there is a daily resistance pivot and weekly resistance pivot just under the major sell off area), price missed it by a pip or two so I cancelled the order thinking I've missed the boat only for it to return to the level and hit what would of been my order, eventually to the pip before reversing big. I'm gonna leave this one on and see what happens.

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  • #587
  • Oct 3, 2013 3:28am Oct 3, 2013 3:28am
Agree
I like the aproach beacause it´s about position (risk) size, which is the appropriate MM.

Check this math.
Open an account with OANDA (not really my friends, they trade against u and run stops like no other).

Start risking 1 U$ (yes 1)
20 consecutive winners, at R1/2 ratio makes a bit more than a million in 20 trades.
(You can call this an "anti Market Maker Martingale")

Of course he´s laughing cause 20 consecutive winners is close to impossible.

Now consider this:
there´s 2 ways I read about recovering a loosing trade:
-Nanningbob´s recovery system, and hedge trades.
-Both are possible, they take time and effort, actually most of your trading time goes recovering bad trades, the winners take care of themselves and go fast and clean.

Nanninbob (and many pros), don´t use an initial stop.(you can google his PDF math calculation)
The idea is simple, trade goes 100 pips against you, buy a second lot and BE at plus 50.
Goes another 100 pips against you then you buy 2 lots and BE in the middle...
After the third or fourth run against you you close the first leg (with a big loss), and continue recovering.
They claim you hardly ever reach the bad point provided you trade extremes to begin with, when the trend is (hopefully at the the end).
Best is to use steps of 200 pips....you need to work the math around it..and not use it in trending systems...FOREX can easily trend 1000 pips against you...


CONSIDER this:
You put one trade Monday morning and win, you doubled your initial account of 1 U$.
You put the second one on Tuesday and it goes against you, so it takes you a whole week to recover it...

So if you win one week, and recover the next one, all the time..... it would take you 40 weeks to turn 1 U$ into more than a million.:nerd:
Maybe you get hit by a failed recovery in the middle, fine, maybe you loss 2/3 of your account, and this put´s you back to week 5....so be it.... a million in 2 years starting with 1 U$ would put you in the Hall of Fame....
Starting very small is important to practce the recovery bit!!!!

Just my 2 cents worth of dreaming...

Hedging is another subject alltogether, folks argue it´s the same as realizing a SL and starting again which is true, except it can be psycologically easier.
To hedge you basically short a long instead of a SL on a subaccount....go oong again on the next signal....on the best case scenario you might end up with a small profit on the short and 2 winning longs...you can just play conservative and just go till BE and recover...etc...the point is locking a position with a hedge... as long as it´s locked you can leave it pvernight...the more positions get lock the harder to recover though....
  • #588
  • Oct 3, 2013 7:10am Oct 3, 2013 7:10am
Quoting Rag2RichesFX
{quote} The only thing is, when you reach $800k and you are risking $400,000 on one trade... You are definitely considered a big player. To risk 50% of your account you would need to use 50:1 leverage with a 200 pip stop loss and 400 pip target. So at this point you can no longer scalp... thats the only downside.
Actually this is NOT true mate. If you are NOT American living in America, then you can trade much higher leverage than 50:1 with large account sizes. You will NOT be able to do so with market-maker type brokers; only true ECN brokers can handle larger scale business, especially for scalping.

I routinely trade 500 lots, from a collective total of $200,000 across my 5 accounts. Not being American and therefore not being limited to 50:1 is fundamental to my success. 500 lots from $200,000 of accounts is 1 lot per $400 of account balance; or 2.5 lots per $1,000 in my accounts - somewhat higher than your model.

I trade at 400:1 leverage. I am a counter trend trader, and a scalper. My brokers do not bust out trades until 80% of my equity is lost. I use 100% hedging at minus 11 pips, not stop losses. To trade 500 lots across multiple accounts, I use trade copier software. I click one button and the multiple trades are opened. My brokers have presented me with no dramas about my large lot scalping.

Your thread is interesting - but it is not realistic with your pure trade count in my experience. That is, I pride myself on highly accurate entries to counter trend trade/scalp, but I OFTEN close out trades at break even + 1 pip after 5 pips profit has been reached....simply because I believe the best hedge to get is the hedge avoided all together. And these BE+1 close outs do effect my winning percentages greatly.

The principles of what you are saying are correct. It makes NO SENSE to trade from a medium size account up to a large account. In my case, I started with many $200 accounts to finally make millions. But the actual number of trades you project to make it to be a larger trader is not realistic. My system at least needs to factor in or dismiss the number of BE+1 trade entries made on the journey.

One of my students pointed out this thread to me. Sorry if my points have been covered already; I have only read the first 7 pages of replies.
  • #589
  • Oct 3, 2013 10:07am Oct 3, 2013 10:07am
Quoting Rag2RichesFX
Repeating this here for those who may have missed it I will be attempting this as well as the 1:2. Two separate accounts and strategies. The 1:4 will be going for longer term trades. Daily and weekly swings. Variation Using 1:4 RISK REWARD instead of 1:2 Account balance = $50, giving two attempts to get going. Risk = 50% Reward = 300% (4 fold) $50 total, first trade risk $25 Win = $150 total Win = $450 total Loss =$225 total Win = $675 total Win = $2025 total Loss = $~1000 total Win = $3000 total Win = $9000 total Loss = $4500 total Win = $~13000...
I simply do not understand your math.
I trade and live in the US so maybe it is different in other countries
If your account balance is $50, you would only be able to trade with one lot at .10 per pip.
In your example after trade 1, your are showing an account balance of $150, therefore you made $100 profit.
In order to do this, you would have to have made 1000 pips. 1000 pips X .10 per pip equals $100

I just did the math starting with a $100 account size. I figured I would max out my margin on each trade and shoot for 150 pips per trade. I did this for 15 trades and had no losers.

My ending balance after 15 trades (winning each one at 150 pips per trade) is $33, 400

Please explain. What am I not getting.
  • #590
  • Oct 3, 2013 10:17am Oct 3, 2013 10:17am
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,542 Posts | Online Now
Quoting tibokano
If your account balance is $50, you would only be able to trade with one lot at .10 per pip.
All is matter of leverage ...
MT4/MT5 EAs/Indicators/Alerts coder
  • #591
  • Oct 3, 2013 12:16pm Oct 3, 2013 12:16pm
  •  Owl
  • | Joined Dec 2012 | Status: FX Siphoner Of Symphonies | 435 Posts
Quoting GDR3k
{quote} Try it, it's the only way I trade, on this high risk account or my normal account. You will find those areas are where the big market moving orders are and you can often be very accurate with your entrys, often to the pip, or a few pips.
I must say, the setup you mentioned does look worth going over to see how often it arises

throughout the other currency pairs....if you don't mind can you post the next two entries

according to your setup when you take them... I would like a better idea and clarity of what

you are looking for....
One Must Use A Noble Rapier To Pierce The Veil Of Mystery
  • #592
  • Edited 2:16pm Oct 3, 2013 12:31pm | Edited 2:16pm
Quoting Owl
{quote} I must say, the setup you mentioned does look worth going over to see how often it arises throughout the other currency pairs....if you don't mind can you post the next two entries according to your setup when you take them... I would like a better idea and clarity of what you are looking for....
It looks like that first bounce down from the 3624 area this morning was the main cluster of sell orders as it produced the largest move down, luckily I got out at a profit when my order was eventually hit this afternoon. I will try and not be as accurate with my entrys in the future as it's the first bounce back from the area I'm trying to catch.

http://widgets.myfxbook.com/widget?i...e=1&color=gray

One on GBPJPY stands out right away on the 1hour charts and on EURUSD also on the 1hour charts. See below.
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  • #593
  • Oct 3, 2013 12:36pm Oct 3, 2013 12:36pm
Quoting tibokano
{quote} I simply do not understand your math. I trade and live in the US so maybe it is different in other countries If your account balance is $50, you would only be able to trade with one lot at .10 per pip. In your example after trade 1, your are showing an account balance of $150, therefore you made $100 profit. In order to do this, you would have to have made 1000 pips. 1000 pips X .10 per pip equals $100 I just did the math starting with a $100 account size. I figured I would max out my margin on each trade and shoot for 150 pips per trade....
Quoting FerruFx
{quote} All is matter of leverage ...

So tibo...the moral to your story is...
  • #594
  • Oct 3, 2013 2:10pm Oct 3, 2013 2:10pm
Quoting CindyXXXX
{quote} sCAM
What do you expect from someone making 50M/year starting with 200 bucks
COT: The precious data ignored
  • #595
  • Oct 3, 2013 3:51pm Oct 3, 2013 3:51pm
Quoting tibokano
{quote} I simply do not understand your math. I trade and live in the US so maybe it is different in other countries If your account balance is $50, you would only be able to trade with one lot at .10 per pip. In your example after trade 1, your are showing an account balance of $150, therefore you made $100 profit. In order to do this, you would have to have made 1000 pips. 1000 pips X .10 per pip equals $100 I just did the math starting with a $100 account size. I figured I would max out my margin on each trade and shoot for 150 pips per trade....

just Keep it simple
Imagine your account is 50 bucks, but you back it with a real account of maybe 1000....So there you have enough leverage.
Start risking 25....
  • #596
  • Edited 2:47am Oct 4, 2013 1:41am | Edited 2:47am
Quoting dancingphil
{quote} Actually this is NOT true mate. If you are NOT American living in America, then you can trade much higher leverage than 50:1 with large account sizes. You will NOT be able to do so with market-maker type brokers; only true ECN brokers can handle larger scale business, especially for scalping. I routinely trade 500 lots, from a collective total of $200,000 across my 5 accounts. Not being American and therefore not being limited to 50:1 is fundamental to my success. 500 lots from $200,000 of accounts is 1 lot per $400 of account balance; or...

Very interesting and all.

I think its funny though how you say its not possible or realistic.

Why?

Because you can do the math yourself.

10 net winners with this leverage gets you a 100,000% gain. No ifs ands or buts about it.

That means 90 winners and 80 losses or however many it takes you to get 10 net winners.

20 wins and 10 losses is realistic. that's all it takes as far as the math goes.

the trader psychology of scaling up so quickly... that is the difficult part, not the trading itself.

I'm glad to hear you have started with $200 and turned it to millions.




So i'm assuming you are trading with $125,000 balance, that's still workable. But over 1 million it becomes difficult.


see what happens when you try to trade 4000 lots and scalp with it.. it will be a lot different.

maybe in 10 years 4000 lots won't be considered a lot, but that's still a decent order size these days.

much smarter as far as slippage to just accumulate 500 lots at a time and build to the 4000 lot position



on another note... i think counter trend scalping can be very profitable. after a big move one way, people are bound to lock in those profits, and thats a great time to pounce. id love to know more about your counter trend methods.

i love scalping m5 and m30 divergences personally

how many trades do you take per day or per week on average?

are we talking limit orders or market orders?

whats typical slippage on 500 lot market orders? about 0.5 pips is what ive heard for EURUSD

typical profit targets for scalps?

would be great if you had more time to participate in this thread.

take care
Be hopeful in a winning position, and fearful in a losing position.
  • #597
  • Oct 4, 2013 1:59am Oct 4, 2013 1:59am
Quoting kuroro001
{quote} What do you expect from someone making 50M/year starting with 200 bucks
i'll give him the benefit of the doubt until he comes back. or doesnt
Be hopeful in a winning position, and fearful in a losing position.
  • #598
  • Edited 2:42am Oct 4, 2013 2:11am | Edited 2:42am
Quoting dancingphil
{quote} Actually this is NOT true mate. If you are NOT American living in America, then you can trade much higher leverage than 50:1 with large account sizes. You will NOT be able to do so with market-maker type brokers; only true ECN brokers can handle larger scale business, especially for scalping. I routinely trade 500 lots, from a collective total of $200,000 across my 5 accounts. Not being American and therefore not being limited to 50:1 is fundamental to my success. 500 lots from $200,000 of accounts is 1 lot per $400 of account balance; or...

trading at $5000 a pip correct?

but if you went up to $50,000 a pip, id assume some big slippage if you tried 5000 lots in one click (many trade copiers needed id assume)


still FX is more liquid than ever before so perhaps 5000 lots is nothing these days.

from what i know of daily turnover... 500 mil is roughly -- 1/10000th of total daily turnover.

1/10000th of all liquidity (for that 24 hours) in 1 trade from 1 person may not seem like a lot, but it is.


with your 500 lot orders you are doing roughly 1/100,000th of daily liquidity... i see how that is reasonable for scalping.
Be hopeful in a winning position, and fearful in a losing position.
  • #599
  • Edited 3:32am Oct 4, 2013 2:49am | Edited 3:32am
Quoting tibokano
{quote} I simply do not understand your math. I trade and live in the US so maybe it is different in other countries If your account balance is $50, you would only be able to trade with one lot at .10 per pip. In your example after trade 1, your are showing an account balance of $150, therefore you made $100 profit. In order to do this, you would have to have made 1000 pips. 1000 pips X .10 per pip equals $100 I just did the math starting with a $100 account size. I figured I would max out my margin on each trade and shoot for 150 pips per trade....



yes if you are stuck on 50:1 leverage then to risk 50% of your account you need a 100 pip stop loss...

can't really scalp that way.


50:1 leverage, many foriegn broker offer more than that to US citizens

its just that no US brokers offer more than 50:1


there's no logical reasoning for this and i bet US brokers will once again be able to offer higher leverage in due time.

hopefully it doesn't take too long

maybe in 2016 or beyond
Be hopeful in a winning position, and fearful in a losing position.
  • #600
  • Edited 5:36am Oct 4, 2013 5:21am | Edited 5:36am
Quoting Rag2RichesFX
{quote} Very interesting and all. I think its funny though how you say its not possible or realistic. Why? Because you can do the math yourself. 10 net winners with this leverage gets you a 100,000% gain. No ifs ands or buts about it. That means 90 winners and 80 losses or however many it takes you to get 10 net winners. 20 wins and 10 losses is realistic. that's all it takes as far as the math goes. the trader psychology of scaling up so quickly... that is the difficult part, not the trading itself. I'm glad to hear you have started with $200 and...
At 400:1 leverage, and with my broker's margin policies, I need 40 pips profit to double my money. I routinely make 200-300% profit per week. But I am a moody trader, and sometimes don't trade until I feel in tune with the market's dynamics.

I was not critical of the maths of your proposition. My point was that in a practical sense, it is not reasonable to get that 40 pips profit target with every trade. That doubling the account often can require several bites at the cherry. I get multiple 5-8 pip scalps before I get a 40 pip scalp. But that is OK.

Compounding rocks! The maths of compounding are real.

I trade from a base of $200,000 across my accounts, not the $125,000 you mentioned. I leveled off my trading at the 500 lots I trade with, taking profits weekly out of my accounts back down to the $200,000 level to pack, stack and rack cash in my bank. I'll do this for as long as it takes until I feel I am ready to take my trading up to a higher level. I had considered that I MIGHT trade to thousand lot trades this year; but that seems unlikely for now; and maybe from next February I will consider it.

The 5 Trillion dollar Forex market equates to 50,000,000 lots of trading per day. Whilst the spot market is not the total market, a huge change in PA in the spot market will impact the other forms of currency derivatives, and in reverse too. So it is all one market.

Assuming (no one knows) that Eur:USD is half the Forex market, that's 25,000,000 lots of trading per day. My 500 lots does NOT impact this market at all.
I have no idea if that will be true at 5,000 or 50,000 lots.

Sooner or later though, of course the "Law of Large Numbers" will impact the liquidity of large lot traders. And at such a time, I'd imagine a different trading system to that which I use now.
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