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

Quick update. Got a few areas lined up for the 'account doubling trades' and while I'm waiting, I'll just be scalping my normal system.

http://www.myfxbook.com/members/gdrought/gdr3k/697509
Quoting neelyfx
Doubling your $50 account balance with one trade? Seriously??
Seriously? just doubling? 2 times?
How about multiplying 100$ some 100 times ? http://www.forexfactory.com/showthread.php?t=414848


@others
People should STOP generalizing things
& those talking about "You loose that money and your life is over", get a life yourself first and try earning your first profitable trade, before ranting here

Not an advise for all to do stuff like this (better if you have some free money lying around),
But
Yeah, in that shit of statistical porn and probabilities, such things are rare BUT Rare things happen !



Regarding the thread, i think the thread owner once wished > i should post here
Wanna say a few things only:
1) Compounding math and other similar stuff always looks very easy & great in text and images
2) The preparation, plan, implementation, conditions for implementation and mainly the "balls" for implementation (psychological control) are RARE and likewise VERY difficult
3) "Rags to Riches in 10 or 20 Trades" , why not in 5 trades, why not in 1 ?
Yes it can be done in that "1 trade" from Rags to Riches (what's "RICH" is another pandora box though)
There are various ways of compounding , scaling, modified martingale, etc (there are loads of threads/talk around) which can give same or even better results, with same or even better risk control But EVERYTHING boils down to Point (2)
4) Don't expect this to be done on large scale on these leverage brokers. You will be booted out sooner (than you expect) if make some money esp. on typical bucketshops
5) Trying stuff like this on Low leverage brokers is bit more difficult, & probabaly a time consuming affair. Further large minimum starting deposits (except you got a lot of free money flying around), weird margin requirements, trading software incompatibilities add to issues.
I would advise not doing so, except if you have already done stuff like this SUCCESSFULLY before (preferably many times) on bucketshops
6) Your deposit for this stuff, think thats gone (already)
7) You make some money, cut out what you think wud value your time spent making it and go on. (Withdrawals would always the ONLY way to reward your effort/time spent because that bad trade/trades would come sooner or later. To err is human & in anyway these markets will remain irrational a lot longer than you will remain solvent(quote)

@Rags2RichesFx
dear, i STRONGLY advise Trade explorer doing the talking rather than you (else its more of a ego trip & a large number of posts)
I know you are young but think about it.

Good Luck all, yes its always better to have that in rare scenarios
Hope this helps





P.S.
Personally have been doing this stuff, trying different strategies, since years (along with less risky conventional trading) and have got paid to remain way above the water level
100 Fold Challenge->Interested? ->https://www.forexfactory.com/thread/32152
Quoting uberteh
Very true iahmedz, if your life savings total 50$ and u blew it ur out


just had a good 10-15 minutes laughing hard
thanks and Good bye
100 Fold Challenge->Interested? ->https://www.forexfactory.com/thread/32152
Quoting CindyXXXX
{quote} {image}
Anyone grab it?

Good R:R there..

Attached Image (click to enlarge)
Click to Enlarge Name: gbpusdddh1.png Size: 33 KB
Time hides Nothing
Quoting venzen
...... So, what i'm getting at is that a grid martingale method with defined risk and disciplined application is acceptable in my mind. It needs to balance with a good (and ever improving) method for spotting high reward trades to ensure efficiency (of time spent trading) and a compounding account balance - as outlined in these pages.
@venzen could you or someone please give me a link that explains what the "grid martingale" means/is? I've never come across that terminology before.....thanks
Quoting silverpuma
{quote} @venzen could you or someone please give me a link that explains what the "grid martingale" means/is? I've never come across that terminology before.....thanks

There's the vanilla martingale - which basically means you double down on each progressive loss until your $1mil is all lost, then there is the martingale grid as applied to trading, whereby you average by doubling - up to a specific drawdown determined by yourself. The sizing and drawdown is shown in a spreadsheet "grid" hence Grid Martingale (or Martingale Grid). The pro's and con's depend on your MM but as we had been discussing it's a viable option for certain typres of trades and is an effective replacement for hedging. Again, it's one of the strategies that often get pooh-poohed by the orthodox, but as R2R says: it's what the big players and bank traders use since they have the the capital to average many times and, in the case of a bank trader, it prevents having to go to your boss and say "oh, THAT trade? yes, the market moved against me" and the boss is like "why didn't you just martingale it? this is forex not the casino!"

http://www.investopedia.com/articles...martingale.asp

better but longer article:
http://www.forexrazor.com/en-us/scho...e-and-modified

@nanningbob provides this link:

http://www.forexfactory.com/showthre...82#post2417082
cryptocurrency everytime
Quoting venzen
{quote} There's the vanilla martingale - which basically means you double down on each progressive loss until your $1mil is all lost, then there is the martingale grid as applied to trading, whereby you average by doubling - up to a specific drawdown determined by yourself. The sizing and drawdown is shown in a spreadsheet "grid" hence Grid Martingale (or Martingale Grid). The pro's and con's depend on your MM but as we had been discussing it's a viable option for certain typres of trades and is an effective replacement for hedging. Again, it's...
ahh, thanks for that. Yes it all depends on your MM and risk controls. Just a bit like fire, it can burn, disfigure and destroy in the wrong hands or bring heat to a cold damp room, or clear stubble from a barren field to promote growth, or tasty hot nourishing food in another hands. All about how you use it..... carefully....
Quoting erik1
{quote} Oh mate, how careless! You're right. I made a mistake on my post, I mean an edge where you have 35% winning trades (clearly an edge with 66% winning trades would be gargantuan). One in a million is equal to 0.0001% success probability (100*1/1*10^6) Random chance -> With 2:1 R:R 33%. Your probability of winning is 3e-5%. Slight edge -> With 2:1 R:R 35%. Your probability of winning is 7.2e-5%. Just repeated this very quickly mate, feel free to check. Cheers.
Hallo erik1.

Now the math is no longer an opinion! (though it looks like not many people are interested in it!).

Bye

BL
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Quoting betterlife
{quote} Hallo erik1. Now the math is no longer an opinion! (though it looks like not many people are interested in it!). Bye BL
@betterlife I'm very interested and thankful for your maths skills. Its just that I simply do not have a well oiled functioning maths brain So if is not too much trouble I would appreciate it greatly if you could convert your findings into easier to understand trader speak. Yea I know I'm a bit of a dunderhead......and thanks for your patience...!
Quoting silverpuma
{quote} @betterlife I'm very interested and thankful for your maths skills. Its just that I simply do not have a well oiled functioning maths brain So if is not too much trouble I would appreciate it greatly if you could convert your findings into easier to understand trader speak. Yea I know I'm a bit of a dunderhead......and thanks for your patience...!
Hi silverpuma, no problem. Each one has his/her own strengths and weaknesses.

Go to a casino, find a fair game, one that gives you 50% chances of winning and 50% of losing (that's just a theoretical casino). You have 6 coins in your pocket. At every run you bet one coin. If you win you get one more, if you lose you have one less. You decide to stop when you reach 21 coins, or (of course) you MUST stop if you have zero coins.

Now: ask yourself. If I have 40% chance of winning and 60% chance of losing, which is my overall probability of going out of the casino with my 21 coins or with nothing in the poket?

It is not so easy. Imagine that you have 15 consecutive wins: you will reach your target and go home happy. But, how likely is that you get 15 consecutive wins? You guess: 0,4^15 (1/2^15 or 1/32768... not so much...). The worst thing is that, if your first run is a loss instead of a win, now, for getting our again with 21 coins, you need no longer 15 consecutive wins, but 16, for a total of 17 runs (because you have already made one + 16 = 17). And so on and so forth: it's sort of "recursive problem".

Now, after a bit of number crunching you come out with the formula I presented before. P(k) = (1-lambda^k)/(1-lambda^T). k is the number of initial coins (6) in the example. P(k) is the probability of going home having reached the target starting with k coins. T is the target (21). lambda is the ratio between probability of losing the single run and probability of winning the single run. In this case is 60%/40% = 1,5. TAKE CARE: the formula doesn't work for lambda = 1, i.e. 50% loss/50% win (because you cannot divide by zero...!).

OK: what does it matter for the Rags to riches story?

Imagine that the "coins" of the casino are the exponent to apply to the power of two. In this thread (original version with reward:risk 2:1 - and sorry if I wrote before risk/reward = 1:2... it's not a hard math calculating a reciprocal!) every time you win you double your capital, every time you lose you have half of the capital residual. Therefore, if you start with 50$ (that you can imagine as 50$ * 2^0), you will have $50 * 2^1 (100$). If you win again, you will have $50 * 2^2, and so on. Vice versa, if you lose you will have 50$*2^(-1); 50$*2^(-2) and so on.

Where do the 6 and 21 chips come from?

Well, when you reach 50*2^(-6) = 50 * 1/64, you have 78 cents left, and we decide you are "ruined" (it doesn't make sense going on playing the game).
Just let 2^(-6) correspond to 0 coins, 2^(-5) correspond to 1 coin, ... 2^0 correspond to 6 coint (wow! You're at the beginning of your trade, with 50$), ....
2^15 correspond to 21 coins (that's the million dollar target all are aiming at, in this thread!).

You see that you can apply the good formula of above for calculating the probability of success. My discussion with erik1 was due to the fact that, if you really have a win probability of the single run of 66%, lambda will be (33/66) = 1/2, and with the above formula you can see that you have 98% of probabilities of winning the challenge of this thread. Instead, as erik1 than corrected, if you have just 33% of probability of winning the single trade, your chances are quite low (3*10^(-5)).

Erik1 is a good guy, and he's right in saying that a bit of math is not dangerous to health. If you want to understand this better, you can spend two hours with this video: http://oli.extension.harvard.edu/mat...51129.flv?play

You will see that you can also calculate how many "runs" you need to reach either the target or the ruin. But take care: Prof. Bamberg is very nice in explaining things, but a bit careless, and his formula for the time to exit wrong. You need to dig a bit into the web if you want to understand it better and having the correct formulas.

OK, now I am sure that 90% of the other readers are sleeping .

Please do not stone me: I was answering silverpuma's question. Silver, I hope this helps.

Bye

BL
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How do you fancy doing some maths tutoring on an old codger like me....LOL Well what can I say. Thank you seems trite for so much detail and help but its the best I can do. I really do appreciate you explaining this for me and now I going back for another read through to see if these 1.5 brain cells of mine can be shaken into action. Much to ponder...........
I've heard so often that averaging down losers is heresy. But is it?

There´sa a very interesting Video in you tube on that ( I will look it up and post it)
Its actually a commercial Video from a group that explain how the Market Maker buys against the selling trend and sells against the bullish trend, slowly accumulating the other side´s positions of all retailers...till the inevitable turnaround comes where he cashes in all their Money...
And of course he always has the deepest pockets that allow him`to play that game.
Consider this: stop hunting is so aggresive, it effectively destroys most of the hard studied edges of the poor retailers.

I´m definitely trying to go the non stop averaging down way, including hedge, instead of SL...recovery going both ways...with carefull Position Sizing...
Position sizing is crucial, that´s why I trade with OANDA, free from lots....
OANDA , mind you, is one of the worst stop hunters in this Casino game.!
It´s hard to establish rules, cause once you go away from the classical postion, SL, traling game...and use "campaigns" with multiple adding , averaging down, AND hedge...the possibilities are endless...also of a Margin call by the way....
Quoting cuchuflito
I've heard so often that averaging down losers is heresy. But is it? There´sa a very interesting Video in you tube on that ( I will look it up and post it) Its actually a commercial Video from a group that explain how the Market Maker buys against the selling trend and sells against the bullish trend, slowly accumulating the other side´s positions of all retailers...till the inevitable turnaround comes where he cashes in all their Money... And of course he always has the deepest pockets that allow him`to play that game. Consider this: stop hunting...

hi cuchuflito,

do you mean the video recently recently featured by ZeroHedge? http://www.zerohedge.com/news/2013-1...-market?page=1

If so, i just want to point out that, as explained in the video (and by similar employees now members here), "stop hunting" is not really what we think it is. It is not a deliberate attempt by the market makers to frustrate the retail crowd, but a natural consequence of making market. As you say they discuss levels and open positions for big players and it is often obvious where PA is heading and will reverse. The retailers (having small money by definition) are just "in the way" of the bank and hedge funds settling PA for their intended entry and direction. Basically, if you think of the market as an aquarium, we are swimming in their pool and when it's feeding time, it's best to wait till the frenzy is over and then pick out the scraps. There is no evil intent, it just comes with the territory and we have to take that into consideration when we analyse, plan and enter.

As discussed in this thread about the contents of that video, http://www.forexfactory.com/showthre...&goto=lastpost it can be deduced that the urban myth about deliberate and systematic stop hunting is indicative of a victim mentality. We traders would blame anyone but ourselves for our failures. The banks are slow, unsophisticated and unorganized. We are fast and agile. But get in the way of the market maker and their customers setting up a large trade and we risk getting tailfinned.
cryptocurrency everytime
Quoting cuchuflito
I've heard so often that averaging down losers is heresy. But is it? There´sa a very interesting Video in you tube on that ( I will look it up and post it) Its actually a commercial Video from a group that explain how the Market Maker buys against the selling trend and sells against the bullish trend, slowly accumulating the other side´s positions of all retailers...till the inevitable turnaround comes where he cashes in all their Money... And of course he always has the deepest pockets that allow him`to play that game. Consider this: stop hunting...

re: your point about averaging down:

For an inexperienced trader with no sound averaging method, it can be a one way trip to margin call. However, as explained in the video you refer to, the big players use averaging to position and protect going concerns. They also close positions at a loss if necessary - say it becomes obvious to the bank trader that client orders coming in are going against his position - he has to close - both to minimize loss and to be able to justify to his boss. But when awaiting a high probability reversal, martingaling is no doubt the method. It is explained by the bank trader in the video.

Of course, it is much better in the long-run to enter with a reasonable stop and then to make the judgement call: "Is PA doing what I expected?" If not, manually close out immediately. No hopamine. Searching out high probability trades and waiting for the optimum moment to enter is the art that needs cultivation - not skill at hedging after each entry. But sometimes averaging is called for despite its potential to amplify a losing position.
cryptocurrency everytime
I thought whilst everyone is experimenting with risk I would post a simple martingale EA (not written by me) with various methods of going from zero to hero, or vice versa, to play with whilst you are working on your next post.
Attached File(s)
File Type: mq4 MasterMartingale_v2[1].00.mq4   7 KB | 588 downloads
For all who are in need to discuss about all these losing martingales, I would suggest them to open their own thread.

The purpose of this thread isn't about any EA/system.
MT4/MT5 EAs/Indicators/Alerts coder
Quoting FerruFx
For all who are in need to discuss about all these losing martingales, I would suggest them to open their own thread. The purpose of this thread isn't about any EA/system.

and who effing asked you?
are you the thread owner? does he not mention martingale?

check yourself or go join the police force if you want to boss people around in someone else's yard
cryptocurrency everytime
Quoting venzen
{quote} and who effing asked you? are you the thread owner? does he not mention martingale? check yourself or go join the police force if you want to boss people around in someone else's yard
MT4/MT5 EAs/Indicators/Alerts coder
Quoting venzen
{quote} and who effing asked you? are you the thread owner? does he not mention martingale? check yourself or go join the police force if you want to boss people around in someone else's yard
... well I never
Time hides Nothing
Quoting venzen
{quote} re: your point about averaging down: For an inexperienced trader with no sound averaging method, it can be a one way trip to margin call. However, as explained in the video you refer to, the big players use averaging to position and protect going concerns. They also close positions at a loss if necessary - say it becomes obvious to the bank trader that client orders coming in are going against his position - he has to close - both to minimize loss and to be able to justify to his boss. But when awaiting a high probability reversal, martingaling...
As I said before, averaging down does not mean Martingale....one can open and close positions with and without profit, in the same "campaign"....as the market progresses, looking for the best chance to either recover, or come out ahead....

In my opinion, "long-run to enter with a reasonable stop and then to make the judgement call:" like you mention hardly works.
Consider this: the average well prepared trader does what you mentioned : "Searching out high probability trades and waiting for the optimum moment to enter is the art that needs cultivation" (Market Maker loves that statement!)

"Average good trader"
He enters, with a "protective stop", now not anymore by the book ("one pip plus spread below the last swing...")...but way below, cause he learned about stop hunting the hard way...
So he´s already loosing a nice chunk of his edge. Say an extra valuable 5 pips on the 5 min. chart, and maybe 10 or 20 extra pips on the hour or 4 hour chart-
So he survives the first moves, market advances in his direction and he starts trailing his stop...(always on the safe, "expensive" side, with some extra pips to avoid the sitting duck risk).
To make it short: most traders get stopped in the beginning with or without safe stops, if not, they get stopped later with a minimal 0,30 R win....that has to recover most of those full 1 R losses.
Sometimes a trade will survive even longer, only to get wiped out in a second by a news spike...
Some even take a short profit and let the rest run...worst practice, when you get stopped you get hit full load, your best runs are only with half a load...eats up your bottom line.
Granted there´s a small, very small group of genuis traders out there that still make it good...but for the vast majority of retailers, the way spot forex works these days is a guaranteed money looser...
Maybe you can improve your chances trading day/week charts...
The reality of Forex retailers is pretty much what I pictured above...and no "magic, carefull picked entry indi" will help much in the long run....the statistics prove my point.

That is why, at least for myself, the chance lies in "unconventional ways"....
Just my 5 cents...
All the best to all...
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