The $200 Challenge

Greetings ForexFactory!
I have started a challenge for all the people who are thinking about starting trading but they don't have the money or the expertise needed.
I am on purpose starting here with $200 and the goal is to produce ~2% per week return.

The Method
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I deposited $200 by means of Visa and I have used a 1000:1 leverage.
This means that I can buy 1.0 lots and if the price moves by 1 pip it means I either make or lose $1.
My default starting size is 0.01 lots which is essentially 1 cent per pip. I then adjust my positions automatically depending on how right I think my guess is. I will be running my strategy on 5 currency pairs: EURUSD, USDCAD, AUDCAD, AUDUSD, and GBPUSD.

The Trading Methodology
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I wrote my own trading strategy in the form of a computer program which opens and closes all my trades.
I trade without stoploss. There is a good chance I might lose all of the $200 and that's OK. However, the test I did show that I have an edge on ~90% retail traders and that there is no emotion associated with my trades, they are executed by my ExpertAdvisor.

Learning Points
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I think the biggest problem is that "day-traders" or wannabe traders trade too much and get emotional and make trades which are not backtested in their reason and which are not sound in their setup (ie why trade now). It is something to keep in mindwhen constructing a strategy.

How will we make the money
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Essentially we will chose our opens based on a set strategy and we will just focus on managing our winners agressively even if it means risking more in order to get higher returns than otherwise would be optimal as a sake of excercise.

We will utilize not only aggressive winner management but we will also compound our wins. Over 5 different pairs simultaneously. The risk of encountering very severe drawdown in equity is very real, but since its not our lifes savings & we should be OK.

And most importantly, there will be no human intervention for the next 8 weeks.

I will be going over simple concepts in this thread which are necessary in order to become a successful trader on your own.
Cheers and subscribe!

$200 Forexville Challenge

So far so good, the expert advisor has openned 6 trades in total, essentially holding bearish position in the audusd on the basis of price action and the apparent volatility.

I also dabbled a bit with the account and made some low risk yet high yield trades based on the inverted head and shoulders structure evident in the H1 chart of the AUDUSD. Essentially I even before the 2nd shoulder formed and as we were expecting the bullish arm to develop, I bought a total of 0.7 lots in total (0.1 + 0.2x3) buying against the dropping market and holding to make a quick 12% return within minutes. I know I said I'd let the EA do all the trading, but was a sure thing

As a side note, I have been looking to automate this kind of trading as I firmly believe that head and shoulders is probably the most consistent chart pattern which you should be manually exploiting. All the other things like fibo, bats and other nonsense are just nowhere near as reliable as the H&S.

By the way, here are some of the backtests I did for my EA, and it definitely seems we will be looking at some interesting equity curves. Here is the profit over 5 currency pairs. X axis in number of M15 bars in the test.
http://www.forexfactory.com/attachme...7&d=1445407385

Just an update... as mentioned above the EA was holding some 0.06 lots of AUDUSD for the last day or so and even though I made manually a quick bounce within minutes, it held its bearish positions for ~24 hours and was able to close some nice profit. Personally I would have gotten out of those trades earlier, but that is the beauty of automated systems, they let your winners run. That is why we all need to strive to be automatic as possible in our decision making, eliminating the psychological tilt which wipes most of our profits for one reason or another.

See below my trades in orange and the ones made by the EA.

I think this clearly denotes two different styles of trading: low risk and good payoff using high leverage and the, "gut-feeling", more haphazard trading involving your feel for the market and your analysis.



And just like that....we made 20%!
NB. Making 20% returns in FOREX is something you should aspire to do over the course of a year, not 48 hours.

While we are able to make quick gains, I have a sneaking suspicion that this will be a fun showcase of what happens when you experience the other side of the model which underlies the FOREX market, that is what the market "walks" or "diffuses" away from a position which favors the strategy which you think is optimal. I will be going over some of the mathematical theory underlying market behaviour in later posts here.

Less is more.

The less you trade and the stronger you are at controlling your trigger finger and prevent it from entering positions, the more money you will make, the less commission you will pay and more sanity you will have remaining.


So what does every wannabe trader do?

They buy 4 or 6 computer screens and put up 64 charts up simultaneously with 6-8 indicators per chart.
ie

Now, the trader who has the above setup might be a very good and experienced trader. We are not denying that. However, if you are new to trading and don't have a strategy for trading which you have written down on paper or word or excel document, or programmed it into an expert advisor, if you go an invest in such a setup, I will guarantee that you will lose money. FAST. Faster than you could spend it playing scratch and win tickets. I remember when I first made money in this game, I made it all on an old $400 dollar Macbook which ran 24/7 and paid for itself 25x. I still use it. Sure when I am coding and doing statistical analysis of market trends, I have a computer with 2 screens. Two. Between those 2 screens I have a coding window, Excel spreadsheet, MT4, MetaEditor, output text file and a mathematics suite which are all necessary to make mathematical models of the market. I also have a whiteboard to plan algorithms. That is all.

You should really aspire to have your trading desk have as little clutter as possible, meaning wireless keyboard, mouse, monitor (or 2?). Nothing else. No cans or drinks, no clocks, no pen cups, nothing. It has to be clear. You are sitting at that desk to do a simple job: you are there to push button A or button B to either buy or sell when the pattern you decided on shows up. That is all.

Just an update:
The exert advisor for some reason or another had a rather bearish outlook on the Cable at a time when most people I think would have considered that the market is "consolidating". In any case:



Once again, the advantage of an automated system is that order sizingg, building positions etc is all automatic. I will teach you how to do this in the upcoming posts.
Your initial entry really is not what matters a whole lot, but rather how you manage the positions once open is really what allows you to make money and to compensate when you are wrong (ie, just look at when the EA decided to BUY the Cable).

Cheers!

All right we hit 100% growth within 1 week! The drawdown we have experienced has been about 20 percent at very most, but we have been risking much more than the recommended 2%. I think this approach can be further tweaked, but its meant to inspire people with small accounts and giving them an idea for how to size and how to trade super small accounts and still make decent money by starting small. Feel free to review my trades and learn. Remember that a 100% return is unrealistic and that you can run into a lot of trouble if you try to do so without staying on top of your risk

Some interesting trades made by the EA:




As well as



Seems like the EA has a mind of its own and definitely milks those trades for a long time. The cool thing is I made a neural net chose entries based on past data and I sometimes am quite surprised when it thinks would be a good time to enter. Once again, I am using very aggressive money management. I adopt the methodology of a casino: if I have an edge, I should never put a limit how much somebody can wager. Therefore, since Casinos don't use stoplosses why should I? What do you think, when should you really use a stoploss if you have a winning strategy?

Closed a couple of GBPUSD trades and we clear $500! Vamos.

I have been receiving some questions about whether or not I will be giving out the EA I made and the short answer is NO.
However, you are free to use the trades my EA generates and test them yourself. It uses a neural network which I personally trained.

I would much rather teach you how to get to this stage where you have an automatic strategy in place which is really the key to becoming a profitable forex trader. I am putting together the first free and finest quality trading course on the internet, which I hope will save the world a lot of the money that they would have otherwise dumped into the market.Hold on tight!

Talk is cheap.
I m wondering...
Phemmy

Hi there,

The problem with people like you is Instead of coming out and saying you want to sell this EA to prospective Traders, you go round about it and pretend to want to help people, in reality, you want to Sell your Tool in the end. You know what, lots of traders here already know all this sort of Games and as quickly as you came, is as quickly you will fall in to Oblivion along with your Thread.

You really want to help people, bite the bullet and give away your EA then you would have Traders Listen and Pay Attention to you.
For now, you are just a wannabe that Dreams of Making a lot of money selling this Special EA. Take a good look at FF, you will see that there are lots of you about trying to Sell this or Sell that to Make people Rich. Question is, if it were so good, you will sit down and Trade away for yourself and make all the pips on your own, guess what, that is not the case so you come here and try to Sell. It has never worked and still never works. Give this thread a few weeks and see what a Ghost Thread it will become. Another Loser trying to sell EA, Dream on.

Am out of here and wish you all the best as you sure will need it.

You are going down and down . You should have close all your trade

Relax. I am trying an excercise here to build using a micro account, while accepting high risk and showing the whole world how I am trying to do it. I have turned 500 into 10k over 3 months and cashed out most of it. I am trying to show you how high returns are possible if you wish to accept high risk. Which i stated outright. Rest assured I will never publicly release the neural net which generates entries. Bottom line is we are still up 50% over 2 weeks, which only a handful of people on this giant forum can attain. No need to hate.

Also, let me turn your attention to one word:
Schadenfreude - to experience joy derived from misfortune of others.
Like here I am trying to save new investors money and trying to show them how to trade profitably wih a smal account, and we experience one drawdown and people just can't help but be giddy? Shame on you.

Making a good recovery following some drawdown. Currently sitting on 68% returns in well under a month without ever losing any of our investment really.

Upon analysis, the largest component of drawdown was user error as I interfered with the EA where I closed hedged positions opened by the EA. I had my reason for it, but in the end it left the EA naked in a volatile position of aud/ dollar positions. Let that be a lesson to you:

Develop a strategy and stick to it no matter what.


Now, when the strategy was first developed the idea was to permit large drawdowns, we are talking about 50% in equity terms. The damage I created wasn't really in not tolerating large enough drawdowns but rather cutting hedges which allowed large drawdown to happen instantly due to small account size.
^This is exactly how small accounts get destroyed.

Talk is free.

$200 Forexville Challenge All Time Return: 59.4%



...you are missing a point. People need to learn how to trade not necessarily which strategy to employ. There countless profitable and super profitable strategies, but if your fundemental approach to trading is lacking, it doesn't matter what strategy you use. Criticizing my return is meaningless as it is a challenge and where I set out to beat 99.993% of human traders using a simple program i made using the smallest imaginable trading account (which is the kind of approach new traders should take). So far I am only ( )beating about 98.5%. Cut me some slack, will you?

Hey, those are some hurtful words.
I'd be lying if I said I didn't consider selling the EA. But honestly, I don't need to. Its a hobby of mine which has made me some money...not millions or anything like that, but enough to buy some extra things I don't need with it. That's why I trade. I don't do it for a living, but nonetheless the journey I went on has been educational. I just want to share what I found with the community which gave it to me. I made my own software and that's all it is, my pet project. You can check my profile for another account that I strictly used the EA for. It made some 6k Profit, mind you it started as a 500 account. I have nothing to hide. I beat the forex market using both automated and manual trading. Most people don't. Actually 92% don't. You can take what you want from this thread, insight, trade ideas or how to approach trading in general. However, if you are going to come here and be a jerk, I am going to drop a ban-hammer on your butt rest assured

Forexville, do not let them get to you. Keep trading fun. You are right with people needing to learn how to trade. Once you get the ea running you will not need to sell it just buy a couple of houses then rent them out, be good.

The EA made some trades:
legged into a bearish bounce on the EURUSD, held and cashed in a solid profit. Up to 95% return at the moment. Lets goo!

Instead of talking so much, why don't you show people how good you are instead? got any trade explorer to show your trades? if not, you're in no position to scrutinize others. you are just as guilty by pretending to be just and helpful when you don't show a single thing regarding how well you perform, so whatever you post relating to you entering a trade with no hard evidence is simply interpreted as you giving out trade signals but god knows whether if you have placed that same trade yourself.

be legitimate, if you are going to talk the talk, and if you're really gona walk the walk, show it. instead of telling people about it.