ok guys with a $1000 account 4 hours of trading a day,
with a 25% success rate and 1:4 risk to reward ratio,
1 trade roughly a hour and one pip equal to $10,
with this set up if i go for a 5pip stop order and a 20pip limit order for a trade, and do 4 trades,
according to the 25% success rate i will loose three trades and win one.
loosing trade will make me loose $150 and the winning one $200 so the difference is i gain $50 a day.
is this possible
and if it is that means if i don’t do any withdrawals and accumulate the money i gain in the account and invest it back at trading in 4 years ill be able to acquire $1 million is this possible as well
You’re risking 5% of your total equity with each trade, and you aren’t reducing your exposure as your equity goes down, or increasing it as it goes up.
Now even at 25% success rate, that doesn’t mean every day will produce 3 losers and 1 winner, or that each winner will go to your tp level.
Honestly, at this high of an exposure even a relatively small losing streak could wipe out your entire account.
Sure, it’s possible to take $1000 to $1000000 but the odds are 1 to 1,000,000 that you could do it with the sparse information you’ve given and your high risk.
nir, you are making huge assumptions here. One is that you will somehow find four trades every trading day, and that out of each of those four one will be profitable. The reality is you are not preparing for the worst only the best. So lets flip it around, lets say you have three days of losses, where will you account be and where will your head be at? As a professional trader you must be prepared for the worst, that is why hedge funds only risk 2-3% of capital per trade and they have “circuit breakers” as far as drawdowns. When you talk about 75% loss rate, you have to assume the WCS, which means 75% in a row and not distributed throughout a period of time. Protecting your capital should be #1, without capital you cannot trade. So I think you need to reassess your plan, I would hate to see you as a statistic.
I love the enthusiasm of making $1M, good luck. Have you back-tested your theory. How many months have you back-tested it for. What was you biggest loosing run? I assume you have done this, or at least I hope you have?
No in all honesty you can’t. Four hours a day with your lot size and your really pushing it! I would sincerely suggest you look to 4h and up… preferably 8h or daily. Scale back your lot size and trade the longer TF’s. 250 pips a week at 0.2% of account balance re lot size will give you 5% compound growth a week. Thats all you need to hit your $1m in four years. I’ve yet to meet a scalper who’s profitable longer term.
Hi, lots of traders try to come up with theories and calculations that seem to be simple. However, reality is usually different than we expect. In your example, 25% risk is easy to achieve. However when you set your targets in 1:4 risk, you will probably get to the stop order 6-8 times out of 10 ( because 5 pip stop is extremely close). Therefore, this theory probably won’t work. I guess that you are looking for a method that will provide small but constant profits. Well, everybody does. I would try take your suggestion, and try to do the opposite, 10 pip limit and 15-20 pip stop. You will have to combine some basic trading skills, such as spotting the trend, but it will improve your odds. Though I must say that I do not support any system that its potential loss is bigger than the potential profit.
like they said, there’s no guarantee you can win 1 out of 4 trades everyday. Every trader hits losing streaks and it is possible that you get hit with a massive losing streak along the way.
with that said… turning a couple thousand into a million woudl be awesome. lol
Here’s a joke for you: statistically, statistics are not such a good method to go by…
And now for real – I don’t know if you will make 1 million dollar (probably not) but this is probably the way to do so, by self-discipline and Stop Loss. The only thing that you’re missing is strategies, when to go Long/Short/Stop loss and Take profit. Learn well and you can use several websites to do so and then go and try to earn your 1 million dollar (I wish you luck).
Good Luck!
