£50 Challenge - can I get it to my £500 target? Could you?

I want to achieve the impossible: become a successful trader from starting capital of £50. This is the very minimum deposit required at the financial spread-betting sites (only available in the UK).

I have started first with UK100 but may also enter Silver and FOREX. I’m working with a 1 or 2 pip spread and the initial size of my stake will be £1. It’s that simple. Anyone one want to join me in this attempt please post your experiences.

I’ve read plenty on the internet, watched youtube videos, where I’ve been told that it’s impossible to become a successful trader without £5000, or at least £500 minimum. Well, in the short term I’m prepared to put £500 to it but not £5000. But I’m not even going to start with £500.

My attempt to go from £50 to £500 could help others understand the difficulties of trading and - if successful - some inspiration that learning can pay off, for relatively little down payment. It will also give me experience of trading for real money - and the psychology involved in that - possibly cheaper than were I to start at a larger amount.

BTW I’m not a professional trader pretending to be a newbie (this will probably become obvious!). Three months ago when I wanted learn how to trade I thought I’d have 50% chance of being right, straight away. After all - the price will either go up or down. 50% chance! I lost £100 in 12 trades, only one of which was correct. So you can’t get more hopeless at trading than me.

Okay, it’s not quite true: I’ve had three month’s practice so I now I can look at the chart and can guess which way it is going about 80% of the time. If you want to try this you may need three months preparation.

My currently meagre ability is mostly because I recognise “Ms” (rounded tops - or a “tit’s up” formation ) and “W” (“bottom’s up” formation), ascending and descending triangles which form along support and resistance levels, then breakout. However this knowledge isn’t necessarily enough to go from £50 starting point as I don’t always know how far the breakout will go, or initially reverse. We’ll find out! (I’ll combine this tits up/bottoms up strategy with other indicators).

I have tested a much more promising high probability strategy that is about 85% for at least 15-20 pips with little swing (relatively tight stop of about 15 pips). Some of the remaining 15% could be caught too. However I would only start this with a decent amount of capital - £500. So I want to go from £50 to £500 so I can use this even better strategy. Or I might give up and decided to start with £500.

Why even bother starting from £50? First, the challenge. Second, to gain the experience.

I’ve found out from small scale attempts with other strategies that following any “only enter if X and Y but not Z are true” strategy is more difficult than it looks. In fact, I’ve made mistakes trying to follow a specific strategy that I would have never made just looking at the chart and thinking for myself.

The probability rate is a lot lower than the paper rate of any strategy, due to one’s ability (or lack thereof) to make accurate observations, and make subtle judgements quickly. It’s easy to get so excited by the prospect of winning your imagine an entry signal that is not there.

This is true because using an “if X and Y but not Z” strategy is just like trying to execute a golf swing which is made up of “do X and Y and not Z” component movements. It looks easy when a professional does it, one can understand it on paper, one can explain how the professional does it, but physically doing it takes practice, during which time (costly) mistakes will be made and you feel like giving up.

Currently working from home and for some reason 90% my entry signals occur when I’m working so progress is slow. I will update thread with my progress. Were I to get wiped out right away, I’ll probably have one more go with another £50.

Oh yeah, I began this £50 Challenge weeks ago. I got to £74 then fell back to £47. Yesterday I was £69. Today I’m back to £49.

(I hope i understand this right, you are betting £1 a pip right? Otherwise disregard my post :P)

Risking 30% of your capital each time is likley to fail. Just a couple of losses in a row will render your account useless and even with an 80% win rate that is still a possibility. A 2pip spreat eats up 4% of your account off the bat, before you even break even on the trade, and hude swings from +50% back to 0% are not signs of a strong, sustainable account.

Find a broker with microlots at 10p a pip and slowly grow your account from there.

Once you are confident and have been trading for a while I would suggest that you introduce a system of slowly adding more money into the account everytime you reach a target. For example if you manage to add 100% to your account (using microlots rather than your current method) then you could add another 100% of your own money. Thereby gradually building your account up a healthy size trading size a little bit quicker, whilst making sure that you are winning along the way. Plus you have the added benefit of slowing growing the account size and getting used to trading with more money rather than switching from £50 to £5000, which is a very different emotional game.

Good luck, but first get that risk size down! :slight_smile:

If you can genuinely predict market direction with 80% accuracy with just three months’ experience then I see vast riches in your future.

Good luck with the challenge, though!!


Yeah, its possible, But Like Shroom said, you HAVE to be perfect,

I risk about .25% per trade, 3 trades open MAX at one time, Leaving me 25% for leway incase of early call. But my strike rate is very high, You can get in trouble, so just follow your rules strictly and good luck

That sounds like good advice. I will probably do this after just a little more experience - possibly start of November or next year when I’ve not got other work commitments. I’ll spend another £50 first. Disregard everything I say though as I may change my mind overnight!

In March I tried Finspreads for 1 week. They have/had a 10p pip opening promotion. I decided to quit after a couple of days because I very quickly realised I didn’t know what I was doing even at 10p and I hated the leverage, lost £15 but that wasn’t the point. I had a job where I wasn’t working from home so I just forgot about trading until this summer.

It’s easier said than done (read update below this post - which uses another strategy but illustrates human error) and it’s still a relatively small sample size from a non-trending market. There is also an element of judgement to it that can bias the statistics. How close is “close to the edge of the bollinger band” (which disqualifies a potential entry)? The swing of 60% of the first 40 samples was clustered between 0 and 9. The graph of the swing has a familiar mathematical left-skewed distribution where as the graph of the total movement is flat… but since there is an element of human judgement to the result I’m still not sure - and it’s a tiny sample size.

START OF DAY: £69. Market: UK100.

Let’s start with something positive - yesterday.

Yesterday I was successful but also unsuccessful - because I’m still new I didn’t have the confidence to stay in and so didn’t maximise my returns. This is a problem because it means the next day, when I wasn’t successful, wiped out more than I gained this day.

My method predicted the breakout. I also correctly predicted the short pullback before the big move - which I expected because the price had gone over the edge of the bollinger band. But I didn’t have the confidence to re-enter. Anyway this move took my total up to £69. I was feeling very pleased with myself this morning.

Today’s update.

Had two entries and two types of human error today. The result of which means I’m down 30 on the day. I’ve had to top my account back up to 50 so I still have adequate margin to participate. This means -11 has of my 50 has already been used up.

Here is the first at 8.30am.

My first mistake was to incorrectly draw the resistance level. It should have been level with the top of the wick of the green candle or under the range (not enough experience to know which it was yet) - either way, resistance wasn’t actually broken at the end of the signal candle so I should not have entered.

Here is something else I might have done (but didn’t need to on my method) to give me pause for thought before entering: the preceding bull run went up 62% fibonnaci of the bearish range break-out. From that reason alone one might have guessed it would be a pull back.

Here’s another mistake - this time psychological. My method correctly predicted the move but I got scared by the big 1 minute red candle, and was shaken out.

This is how you can be right and still lose money trading. Look how it went after that… that big red candle looks tiny now.

BTW I’ll explain my method when I’m a bit more confident I know its ins-and-outs. It’s possibly also 80%+, or more, but there are only a few times a day when it applies and I often miss them because I’m working. You might be able to reverse engineer it but there are a few banana skins.

Can’t say I did warn you :wink:

It seems to me you are exiting trades early because you aren’t taking into considderation that the market might temporarliy move against you. It is very very unlikely that you will always be able to enter trades just before the move takes off, but there should be a price level where you can say you were totally wrong about the move, which is where you should get out.

With M1 trading it’s about gauging the overall direction of the move and picking a good entry position, you have to be prepared for moves to come back against you as M1 is more volitile than other time frames. I make a habit of always selecting a sensible place for a SL which will only be hit if the trend im trading is broken (in other words higher lows or lower highs, etc) and I will only exit a trade early if I see the trend reversing again me, which usually takes much more than 1 candle.

In your last example the price moves down sharply but is still in line with an upward trend, so it’s not really a get out signal. M1 is psychologically brutal, which is why I love it and hate it.

Yes. It’s a psychological hurdle which you can’t replicate on a demo account.

I think I’ll do it eventually - I’m gaining confidence that I know what I’m doing. Getting this wrong when my method is right actually gives me confidence.

Stop loss could be about 15-20 pips, I think… need more data. If the average move is at least 20 that would give me 2 attempts to not make the first type of sloppy error… set my limit at 20 and stop loss at 20 and handcuff myself… if my method is as reliable as I think, on the basis of my research so far, then that’s all I need to do to reach 100, and then on to 500.

With M1 trading it’s about gauging the overall direction of the move and picking a good entry position, you have to be prepared for moves to come back against you as M1 is more volitile than other time frames. I make a habit of always selecting a sensible place for a SL which will only be hit if the trend im trading is broken (in other words higher lows or lower highs, etc) and I will only exit a trade early if I see the trend reversing again me, which usually takes much more than 1 candle.

In your last example the price moves down sharply but is still in line with an upward trend, so it’s not really a get out signal. M1 is psychologically brutal, which is why I love it and hate it.

They often dip just after the breakout too. I predicted that in the first example, but didn’t re-enter!

Another piece of advice I picked up but ignored in the excitement: candle/s following an abnormal candles usually retrace to the mid-point of the abnormal candle. If I was going to wuss out I should have at least waited for the pull back, but in the split-second I convinced myself all my research was wrong, this was start the big market crash etc… more fun than a £40 video game.

Before I say anything else just going to say I am NOT entering this trade. If I wasn’t distracted by work at the time I would have entered. The 1 minute set up was perfect and I would have gotten 10 pips instantly.

If it’s like the last two it might run on for another 40 pips, but I’m still not entirely sure. That could be it so don’t make judgements based on what I say.

Again, this is the psychological battle… I think it will run on but because I didn’t get in when I wanted according to my rule, so I’m not.

This perfect set up doesn’t occur everyday and it’s happened three times in three days. Just realised these things are mini-Elliot waves.

Wave 1 pushes through the resistance, wave 2 is the pull back. Wave 3 is the super-run. then a larger pull back. Then a shorter run. Then finished.

Elliiot Wave

This is the UK100 today. Compare with the Elliot wave diagram above. Quite similar.

If I’m counting correctly Wave 5 went quite far (41 pips) but is still shorter than Wave 3. It’s a messy market so I know not to expect the Elliot waves to always be visible at any particular chart level, or to be exactly as the theoretical model shows.

The cool thing about Elliot waves is if you identify wave 1 and 2 then you know what’s coming so I recommend newbies learn it as STANDARD.

Personally I’m still learning something new every day… outcomes of my predictions are not always so perfect. Still working out when to expect massive runs and when to expect shorter moves. Either way perhaps next time I’ll actually get in and stay in!

Confidence is higher since start of thread yesterday because my strategy may get me in during an Elliot wave and 2. this (wave 2) may explain the large reversal when I enter.

BTW I’ve tried this strategy on the FOREX and sadly I’m not sure it works quite as well, but I’ve not gone into it much. Will report back if it does.

Sorry, I’ve been away from the computer and/or working so not entered today. Lots of opportunities on the UK100. The one below I did not get a signal for but it illustrates a useful chart pattern.

This is a market going “tit’s up”. You need to dial “M” for murder. Total move was at least 15-17 pips.

Strong resistance prevents price moving up resulting in rounded peaks, like punching sand. Buyers are trying hard but the sellers make up a formidable wall. On the way down the sellers are too busy recovering from the assault from the buyers to try hard and so the price goes back up sharply.

The price often has two goes without going down hitting the bear side of the bollinger band until it dives for the bollinger band edge, creating the profile of a pair of tits. Sometimes you get a “bra-strap” where it drops slightly below the support then tests the previous line of support that now becomes resistance. Sometimes the bra never comes off and it’s a fake, other times gravity takes over.

A high percentage of the time they do what they are supposed too and you can enter with a very short stop, or at least get an idea where the market is moving next. However, if it’s against the overall trend for the day (bullish) I would not enter with the expectation of a long run.