The math to have 1000% returns in short-time

We all know about martiangle, where you exponentially use bigger lotsizes in order to keep the breakeven point near price when it goes against you.

That is the best way to lose your account.

The same concept, mirrored (opposite!), can instead make incredible returns in a very short time.

So how it works, like this.

Suppose that you have 10k.

First trade, you are going to risk 100 usd, aiming to make 100 (1:1 risk-reward ratio), 50% statistically possibility of achieve the profit, with a proper method such probability can be made much higher.

Now you have 10100usd on your account.

What you are going to do next, is risk 200 usd (100usd risk + 100usd of the previous profit), aiming to make 200usd (1:1 again).

Now you have 10300.

Same again, risk 400, aim for 400.

10700.
again ---> 800 risk 800 reward
11500
again ---> 1600 risk 1600 reward
13100
again ---> 3200 risk 3200 reward
16300
again ---> 6400 risk 6400 reward
22700
again ---> 12800 risk 12800 reward
35500
again ---> 25600 risk 25600 reward
61100
again ---> 51200 risk 52100 reward
113200

Et voila, in around 10 good 1:1 rr trades you have made a 1000% roi.

Now, instead of use a 1:1 reward, you can as well use a 3:1 rr, where you risk 3 to make one, giving you a 77% random probability of success, with a good system it can reach 90% pretty easiliy.

The same, around 10 trades are needed to make such returns.

The key of course is to have a good winning streak.

The worst can happen is that your account will be back on the original position.

Cheers!

I think you are going a little bit too fast,
first can you first explain how to do addition and multiplication ?

Then can you please teach us the math on how to get +10'000% roi ?
what about minus -50%roi ?

Thanks in advance

uhhhhh yeah

Forget it...
your account balance would become 0 after only 100 lost trades. E.g., with a winrate of 75% and 1:1 RR ratio you would get margin called after only 400 trades.

I would suggest to increase lotsize by a certain percentage (not more than 50%) during a sequence of a limited number of consecutive winning trades.

Rags2Riches had a similar experiment and thread. Check it out.

HI Tunera,

You give win/profit scenario. What about, if you loss at the first trade, what % you will trade at 2nd trade?

This is interesting.

Thanks,

It's not an hard rule system, just the math i wanted to share.

But the concept is to keep risk extremely small, like risking only 1% of your account on your first trade, and if it fail, then risk 1% again on the next, and again, and again, just keep risk small.

Now if it instead give a profit, the next trade we risk the previous profit.
Then again, and again, etc.

I've used this technique in the past and made way more than 1000%, even if i wasn't aware of using it.
It just went natural to risk more and more as profits piled up.

As k4y also pointed out, risking the whole 100% of account's profits is the "extreme" side of the concept, we don't necessarily need to make 1000% in just exactly 10 trades, no hurry!
You may as well risk 50% of account profits on each trade instead, so you would be able to afford even a few loosing trades and still be on track.

It's really just all about your trading "system", if you are able to guess correctly the market most of the time on a consistent basis, then you can aim for 1000% pretty easily and quickly (instead of keeping a fixed account% risk on each trade and keep running for a 10% monthly return forever. Nothing wrong with that anyway!)

Tunera dont worry its ok , i agree.

So you'd risk the double amount of what you've earned?

I'll go slower and just risk the amount i've earned with either RR 1:1 or 1:2

I risked around half (50%) my account profits on each trade (not just the previous trade profits, but the whole account profits).

And my RR was of around 2:1 or 3:1 at least (risk 2-3 win 1), yet in just a few months the target is hit.

Keep making smart trades, looking for 100% winning ratio (that 100% cannot be, we all know, but just aim for that, only take trades that really looks like 100% sure shots).

It needs patience and mind clarity, but really it's all about mind-set, once you enter in the right one everything take care of itself by itself.

Ok have fun!

make a robot for your idea to test and see the drawdawn if the drawdawn was low then the idea is good

This is called antimartingale.

k

[quote=tunera;8262583], 50% statistically possibility of achieve the profit,

nope, statistically possibility of achieving profit in each trade is much much less then 50%
there are many reasons for that, i only can explain all of it in a face to face meeting with a pen and paper
one reason is two times of paying spread one when entering position another in closing position
another reason is spread slippage or spread volatility
and the main reason is that that we have a 180 degree movement of price(this one is my discovery and need a pen and pencil to understand )

I have worked a lot on grid/martingale and hedge and I am a big fan of it, and i understand the risk and the gambling nature of martin, but still a big fan of it.
technical analysis kills u day by day= gradually, coz we all know no method can predict the market
but martin kills u on the last day, some guys survive many years and even exit without loss.

77% win ratio with how many pips profit ? if you have 99% winning trade with 10 pips tp and your 1% trade hit 100 pips SL will wipe out your account so win ratio is not important but your decision and perfect entry is matter ...

Quick warning to people trying to apply this type of logic. (I'm not saying it can't be done though - if you could make each trade in uncorrelated instrument, that might "work" but reality is most things are correlated but due to costs and other difficulties or news/politics etc could become uncorrelated for some time)

The only proof if something really works is testing it live. And I'll bet every cent I have that if you share something that works in public, it will stop working and quickly . The validity of this theory is easy to prove:

1. "buy the rumor, sell the news" - that's the only thing in trading that keeps working. I think it is because of:
2. imagine the market as having various ranges. eg. eur usd 1.0 - 1.1, 1.1-1.2 or something like that (I just made these up, they change).
- Each of such range has some amount of people interested in trading at those prices
3. Now imagine you have a strategy that flips the trade and compensates for spread/expenses losses by increasing size suitably each time
- This growth in size means there has to be other side to take the trade - and that other side needs to grow their bets too
- If the other side is not growing their bets at similar pace as your strategy is, your other side is going to be a market maker. Market makers move price in ways that make your position lose until they find a counterparty and make a profit from matching you.
- If you take this to the end conclusion, in theory the market maker can have the price go to infinity or zero while looking for counterparty for your trade. The market maker is not necessarily your retail broker - it could be whoever happens to have most size on. So if your strategy starts with $100 and grows to take $xM position, you *become* the market. And if you at that point aren't a market maker but still follow some "get rich quick" strategy, then you'll get some idea what I am trying to explain here :

So, unless you can sustain unlimited temporary losses while market maker is looking for counterparty for your increased size, you end up flipping the trade before the market maker has found a counterparty. Conclusion from that is that to have a "100% winning" system, you have to be able to avoid margin call. How do market makers avoid margin call (when traders blow up, market maker gets windfall profit). Your homework should be to answer that if you are looking to get rich quick.


I don't think I am ready to go live "properly" until I have answer to the question above*. The question of how to avoid/mitigate margin call is like answering "how to set up a startup business with other peoples money and being confident you don't go bust". That's pretty much what you are doing when using leverage. The leverage is "cheap" because the more leverage you end up using, the more certain it is the market maker gets their windfall profit. So the greediest market makers set up as retail brokers and offer the largest leverage. (is it any surprise that many retail brokers are ex. traders - probably the greedy ones that blew up due to wanting to get rich quick)

* I've had live account for a good while but only made losses. I noticed that all trades I made go to loss instantly about 99% of the time. So that prompted me to start looking at what is really going on. If I did not use margin, I could wait for the market maker to find a counterparty. That or those counterparties of course need to be willing to lose what I want to make. There *are* ways to pick the pockets of the market maker - but did you hear about someone making $40M from their parents basement recently? Or fx traders who had accounts closed after making some profit? They were doing things that probably caused losses to market makers. Some ECB guy just came out saying market makers "need to be protected". ... The way I see this, either you are investing in long term, run a hedge fund (either well diversified or self-limiting in size), or are a market maker. What about "trader"? If you want to trade a correlated thing (like solely any currency) the *key* is to know when to stop trading or not trade at all. If you are looking to make 1000% in "no time at all" that brings the question of when do you stop and how you do it reliably "just in time" while the market can still sustain your increased size without you becoming the market(maker) (in which case your strategy should be about market making and not trading).

Okay I actually over-reacted a bit. Looking at the OP closer, yes if you already have a system that you know to work live and know why it works and its limitations, certainly it can be improved (to degree that market conditions allows) by doing things like this. Just keep in mind that if you have $100M, don't expect "quick 1000% returns"... LOL (if your accounts starts with $100 instead of $100M then maybe this kind of thing could scale to 1000% "in short time" but as the op mentioned, if you don't know when to stop you'll quickly find slippage or need to handle situation where the market makers stop quoting (=if your entry was bad the spread could go insanely wide if there's no one quoting near entry level - in practise this can happen if you are trading more often than once a month* - think flash crash being example) (*actually if you are super conservative, 1-4 times a year per price is at levels where a quick "flash crash" soon after wouldn't blow you up with lot of margin - that's why super rich only trade 1-4 times a year! - you can only go big when everyone else blows up)

Jesus, you looks confused.

Let's just say that.. don't worry, you are not going to *become* a market maker, and you are not going to have liquidity problems in forex, unless you open trades big hundreds of thousands of lots in just one straight shot (in that case expect some sort of slippage, but then again if you are trading billions there are some tricks you "must" know about how to enter and exit the market without getting horrible fills in the process).

I bet however that you are not trading billions, so it's fine.

Of course the only and only way to let this "risk-style" to work is to make right trades (winning), at least let's say more than 7 out of 10, this is a risk-style intended for traders that are in the game from a long time and already know how what when and why to take a trade.
In other words, once you are already able to make good trading, this risk-style (that is nothing new! as kprsa pointed out) can allow you to take a small account and let it become a very big one, that's all.

Hope it helped

how do you grid/martingale? i'm reading up on it would like to learn more

Yes it's hard to become market maker but it's easy to become the market so to speak. Difference being the market maker knows what to do and avoid blowing up. Becoming market is just buying so much that no one else has anything left to sell. Technically that can happen under the theory I explained where market is divided into ranges where people are interested in trading. If you are the "last one in" and aren't the market maker, your trade could be the one causing end to that range. If you go to very short timeframes, this happens *all the time*.

everyone has his idea for grid/hedge/martingale
study some grid robots
then u can make your own grid system based on your balance and emotions and risk
i think it's a good idea to start with surefire strategy
google it, you'll find the pdf file
especially the third idea in this file is good and if developed by trader it would be even better

I some times use grid now, not always.