OK so not a system as such but I’d be interested to know if anyone has tried this?
You start with 20 and after 30 successful trades end up with 50k.
I can’t do it as my broker won’t allow me to risk anything like 30% of my balance due to free margin, is this a standard thing? In which case is this challenge impossible to do before you even start it?
I think every trading forum has quite a lot of threads with titles like “From $20 to $50,000” and some even more outlandish than that.
Even I’ve seen quite a few of them. Just never a successful one.
However good, bad, adventurous, reckless, lucky or unlucky one is, there’s always going to be a strong inverse correlation between ‘R’ and win-rate, though. I think 30 consecutive successful trades, realistically, could only ever be achieved (if at all!) with a terribly low ‘R’?
It’s true that with an ‘R’ of 1.0, risking 30% of your balance, ignoring commissions and slippage, 30 consecutive successful trades would take you from $20 to over $50,000, but I bet brokers absolutely love people to try that, because they know they’re going to get the $20, 100% of the time. And I think probably some people try it from a base of a whole lot more than $20, too.
You can see how appealing it is, for sure?
I’m surprised your broker won’t allow you to risk anything like 30% of your balance, though. I wonder if that’s common? I think it must be connected with the fact that you’re using a low-leverage regulated broker, and if you used one of those wild, offshore places where they let you use 200/1 leverage or whatever, you’d be able to do that. (But not get paid out by them, if you made the $50,000!!).
I remember reading a thread, here at Babypips, long ago - before I joined - which I thought looked much more promising (though a similar idea, in a way, but allowing for some losers). It wasn’t successful, but looked a lot more sensible and hopeful than most, as I recall.
I think you’d be interested to read it. don’t know how to find it, though. If it helps, the man posting the thread was a poker player, or former poker player, and I think he had “London” in his username (which I noticed, being a Londoner myself).
Is this something you actually want to try, David?
So, I’m going for a 2/1 ratio with a system that has a 60% win rate based on rather limited backtesting.
My maths says assuming 1 trade a day it would take around 6 months to get to the $50k but obviously back testing and real life are two different things!
It does at the very least help me to improve my discipline and I will get more exposure to markets and how they behave so for £20 not a terrible thing.
I will report back, going to try a different broker, one of the dodgy ones 
I hope I won’t offend too many people, or to be too widely accused of “negative posting”, if I mention that there’s no such thing.
I know you’re acknowledging that the sample size was too small, but if backtesting suggests a 60% win-rate with an R of 2.0, then the backtesting’s really seriously wrong.
I don’t believe it’s even possible for a retail trader to achieve a 60% win-rate with an R of 1.0. (56% or 57% maybe, with an R of 1.0)
But I have only a few decades of experience, so I can be wrong, too!
I’m just thinking that this isn’t a good use of your time and effort, and that probably the educational value will actually be close to zero, whereas if, instead, you spent that time reading Michael Harris’s book “Profitability & Systematic Trading”, that would help you to end up making a living by trading.
Sorry if it’s an unwelcome thought!
(I moved the thread to “Trading Discussion,” as it ain’t a “system”, and I hope you don‘t mind that, either!).
Yes, totally fine with all of that.
I’ll look up that book, thanks.
I suggest maybe having a look at “TD365”, for this, then.
They’re offshore and unregulated, but as these things go they have a good reputation, and will give you both 1:200 leverage and a bad platform to trade with, lol. They say client funds are segregated and held at Barclays in London (but there’s no regulator to enforce or inspect that).
Not exactly a “recommendation”, but personally I believe that if you do win a few few thousand there, they’re far more likely actually to pay you out honestly than most dodgy brokers.
Good luck!! 
Don’t forget to start a Journal thread for this, so we can all cheer you on!
I found it (I think?)! -
That was a funny read. I stopped when he said he wouldn’t reveal his secret strategy… blowing an acct by risking 30% on 2R trades. Every acct linked to MyFXBook was blown up. I’d rather play Roulette.
based on what I know of risk and capital management this is an impossible challenge!
Far rather - the odds are way less stacked against you. Sorry to read about Dan’s health, though.
It looks like the underlying idea was a bit of preliminary marketing for a book, really?
Thank you! I’d looked for so long I was starting to think I’d imagined it. 
He did say at the start that it was very high risk.
Maybe the sort of thing you’d only do, if you wanted to write a book about it? He was honest about that, though.
2R trades surely can’t really be sensible, anyway, can they? It’s hard enough to achieve a steady enough equity curve with 1R? 
It depends who and where you ask.
If you ask in a forum, on a marketing website, on Youtube or people giving out trading advice PDFs on websites, the answer’s pretty often that 1:2 (even 1:3!!) R is a really good idea. And that’s a really enormous number of people, so it’s obviously going to be a broad consensus of opinion, isn’t it?
On the other hand, if you ask anyone who’s ever made a living as a trader, or anyone who’s ever been involved in the industry in any capacity at all (far fewer people!), you’ll always hear the exact opposite.
It’s like everything else, when you’re trying to learn how to do something that so few people ever manage to do successfully: your own outcome will inevitably depend on whom you choose to listen to. 
Well, Oanda wouldn’t let me place a trade for 30% of my £20 bank so I am trying TD365 now.
Today would have won at 2/1 
What do you normal go for? 1-1 or 1-1.5?
Good company - I sometimes use them for the leverage, useful for adding to winning trades. Tom Hougaard uses TD365 and he stakes very high. I just hate their platform.
I’ve ran scenarios and they all eventually fail as the 66% loss rate of a 2R will always come across a large losing streak and kill the account. Anything above 1R will always have a losing streak greater than the win streak. Inversely, R-multiple below 1 will always have greater win streaks than losing streaks.
1R is the max. The market is not so inefficient that the opportunity to gain more than risk is always available.
No, I was strongly advised by pro-traders, when I started, that aiming for an R above 1.0 is about the single commonest reason for the failure-rate among retail traders being so close to 100%.
There were very “telling” figures published by ‘MFF’ a couple of years ago (it was the world’s biggest or second-biggest prop firm, and used to publish some really interestng and helpful statistics!). They said that the average R of the huge number people taking their evaluations was getting up towards 1:2, but the average R of the very small number of people passing them was about 1:1.
I understand that other prop firms and broker staff say the same kind of things, too.
I’ve seen a lot of people with industry/pro experience saying - here and in other places - that their R is usually a bit less than 1.0, some as low as 0.6 or 0.7.
It really makes everything much easier. Especially position sizing, which is also a lot of people’s downfall (especially people using high leverage!).
I’m normally trading, on average, with a fixed stop-loss of about 18 pips and a fixed take-profit of about 12 pips, so around 0.67, myself. But it varies a little, around that range, because I like to let the chart and support/resistance to tell me where to put them (esecially the stop-loss). I don’t even always enter a take-profit at the same time as the trade.
These are good posts on this subject, David (now that we can post links! 
) -
Thanks, very helpful. Do you ever use Fibonacci levels for SL/TP?
This does make a lot of sense as I very often see trades go in the right direction to begin with and then retrace before hitting 2/1 but I suppose a lot of them probably hit 0.5, need to go back over some trades to check.
I may try doing the £20 challenge with a RRR of 1/2 and 1/0.5 to see what happens, you can still do it at 0.5 RRR it just takes longer
(56 successful trades)
Never.
I’ve never seen anything beyond anecdotal/biased evidence that they have any value at all. Don’t get me started on this subject! I have a big list of “absolutely don’t touch” things, just for myself, and Fibonacci’s on that list.
I’m more impressed by “random line theory” than by Fib’s.
Others will tell you very differently, I know.
I agree. It’s easy to lose track of how often this happens if you don’t monitor carefully, backtest in detail, etc. etc. etc.
You should start a thread to list and discuss them. It would probably only be the most contentious thread in Babypips’ history! 
