How to make $500 to $1 Million- compounding effect

Sorry I meant they don’t risk more then 5% I think their guide line target was around 2%. But give you a bit of Lea way … But yer 5% the manager will be down your neck … 10% your out the door

He said I was risking too much on my trade .

They don’t keep 90% I think the company keep 30% or more for admin . The investor get the rest

Forex managed fund a very high risk and high return do the clients are expecting 50%+ a year

Yea it was a prop trader house . It impossible to get in as a trader for bank . You need a huge gift Unless you turn $100 into a million or very well contected

It’s not impossible to get into a commercial bank as a trader, you just need to realize your own potential and find an adequate starting place. For example I’ve just been offered a role as Trade Support with Bank of America Merrill Lynch, this involves being in direct contact with the traders on the floor in London and the US, carrying out valuations and risk profiles on my specific fixed income asset class.

Thats awesome Jezz, good stuff, whether you take it or not, its a big deal,

Agreed. If you ask any professional trader what is the number one consideration before taking any trade, no matter how solid it looks, the answer will always be. ‘How much can I loose on this trade’. :33:

Therein lies the dilemma. A professional floor trader, even as a relative newb, will be trading a $10m account (with supervision). The more experienced or team $100m and up. The inverse rule applies here. Were certainly not talking 5%, more like 0.01%. A 30% year on gain is reason to pop the champagne corks. In contrast, a retail trader with a $500 account will probably take a 1-5% risk per trade in the hopes of hitting the big numbers as soon as possible. A solid strat, MM and compounding is the key to the bigger numbers as the OP of this thread suggests. Unfortunately, its all too common on BP to see crazy risk, scalping and very short TF’s.

I suspect that figure is lower, probably nearer 60-80% but will probably include some level II traders. ‘Clints’ your man on that kind of data. Perhaps he will drop in and clarify the picture? Certainly, on the longer TF’s the stats look better.

Getting back to the thread main point

To show newbies that this plan can work

Please list your avg pips per month and and Risk

Per $500 I trade 0.01 lots
Max of 10 trade avg is 3 trade

I have a bit of a high risk streak with my trading. I would risk 10%-15% in a week if I open 10 trade

Trade style - long term swing and trend following
Avg trade length : 4-10 day up to a month
Avg stop lost 50 pips - up to 200 pips
Avg winning trade: 150 + pips
Avg risk to 1:2 + I don’t bother with any trade less then 1:1

Avg winning trade : 40%
Profit target: 500 - avg 800 pips - best month 5000 pips worst month -600 pips ( worst month when I started 4 years ago -3,000)

hello, great thread. im a newbie too and just want to say its a great read seeing people setting some awesome goals and how your going about achieving them.

I started trading with a demo but its absolutely does not compare to live. In the demo i some how made 16k off a 4k trade in the matter of couple minutes. Great but progress like that can only give me false hope.

Ive started a live a account with $250. Not much but im learning all the time. First week down $50 doing amazingly stupid trades
(knowing and understanding what i was doing wrong)
couple days into my second week and ive climbed from about $185 to $220 by making smarter trading choices and risk managing.

What i need to improve on
Get out of the being in a trade all the time mentality
Trading what i see, not what i think
Setting my stop loss correctly(too many times its been triggered by a few pips and then the price heads in the direction in which it would of favored me

Billyboy, great post. keep us updated. Hope you hit your targets and continue setting new goals.
I too have similar goals and hope to see others do well.

Best of luck mate - welcome

Create a ur own thread and I will try to give you some pointer / feedback

Start small - slow and steady win the race

For the record babypips $500 to 1,000,000 can definitely be done. I know someone who did it. All it takes is compounding and consistency think about it.

If you turn 500 into 2k (which there is no doubt about) then you turn 2k into 6k (no doubt about that) you turn 6k into 15k (no doubt about that either) then you are well on your way to your first 100,000… This 100k depending on your skill, determination and consistency will also turn into your first million.

It can definitely be done, its just that majority traders start from 10k to 1million.

And it can be done within 1.5 -2 years suprisingly…

If you know exactly what you’re doing … and most people who do would not be in a position to start with a $500 account. (I have no idea what I’m doing yet. Just commenting.)

Ref: http://leaprate.com/files/summaries/fxcm.pdf ( stats from a company that tracks forex brokers )

[I]FXCM customers have consistently fared in the bottom half of all firms reporting, with only 24% of client accounts being
profitable over the past year, well behind both the [B]industry average of 28%[/B] and industry leader Oanda where more than 40% of accounts made money.
[/I]

So they say the average is 28% profitable; your suspicion is right :slight_smile:

.

well you only know exactly what you’re doing when:

A) you have a profitable strategy
B) have discipline and patience
C) understand rr over a series of trades and probabilities
D) don’t chase the market and over leverage
E) know what moves the forex market

the person i previously referenced turned 500 bucks to 1 million but he had already made alot of money in Forex (approx 50k)
he emptied the account and started over with 500 bucks. So indeed he knew what he was doing, but then again you can start off with 10k and try and turn it into a million (as most successful forex stories go) but if you dont know what you’re doing then you’ll just lose it all.

so i guess its safe to say that YES it is a possibility, you just got to know what you’re doing. And it can be done within 1.5 - 2 years …

Imagine the classic bell curve…

Then think about the top 1% “tail” at each extreme…

On the right we have high accuracy traders, who make tons of money by flipping tons of lots. Their risk to reward ratios are low, but their accuracy is high. Each losing trade wipes out a few winners, but the losses are far and few between.

On the left, we have the high risk to reward traders, who make tons of money by carefully selecting and filtering trades that offer small risks but huge rewards. Their risk to reward ratios are large, but their accuracy or trade frequency is low. They rarely trade, because their filtration methodology keeps saying “not yet”…but when they do take a trade that wins, its a big payday and their wins wipe out many losers.

They are both VERY VERY profitable, but to ask which is better is not really the appropriate question.

It would be like asking if it would be better to own a McDonalds or be a high end real estate agent? The Mcdonalds makes only a tiny amount of money per transaction, but they do a TON of transactions each day. Each day there are profits and the level, size, scope of the profits are consistent and forecastable. They make money on volume not margin…

Now on the other hand, the high end real estate agent rarely sells a property, and spends a lot of time communicating with and courting prospects. BUT! When a sale goes through they make a BIG check, and this huge influx of money allows them to budget and spend from funds available.

The boom/bust (real estate agent) model will have times when the market is hot and they will make bank, then there will be lean years when they need to lean on their earnings to get through the tough times.

The McDonalds owner will have some ups and downs too, but they will be buffered by the order flow, and the odds are super low that they will have to reach into savings to survive a downturn. This steady state model will never get hot and make you rich overnight the way the boom/bust model will, but it WILL make you rich exponentially as you make profits and invest them in new locations over time.

See where I am going here? In my experience as a trader and teacher, the steady state style is better for compounding, bootstrapping and is easier for a newbie to learn, execute and gain confidence with. If you have $500, it is totally possible to turn that into a 6 figure income in 2-3 years. We have one student who did in 1 year.

But, once you get up to steady state, why not have both? You will have the the steady weekly income stream of the high volume trader, and then the big booms of profit when the rare but rich boom/bust trades show themselves. If you take a high r/r trade and it stops out, the steady state style gains will help fill in the drawdown while you wait for the next opportunity.

Just like most human endeavors, most participants don’t realize that peak performance lies in the “fat tails” of the behaviour/skill/strategy bell curve. They go for the median, the vanilla, the “safe”, the conservative, the “normal” and eat the bulge there in the middle.

So get out there on the bleeding edge and get extreme, and watch your compounding efforts rise up on steroids!


Questions?

Comments?

Good luck and good trading!

-Bo Yoder

Very good explanation, i like the details and comparison between high volume/low return per entry, and low volume/higher return per entry.

[QUOTE=“3DApex;522335”]Imagine the classic bell curve…

Then think about the top 1% “tail” at each extreme…

On the right we have high accuracy traders, who make tons of money by flipping tons of lots. Their risk to reward ratios are low, but their accuracy is high. Each losing trade wipes out a few winners, but the losses are far and few between.

On the left, we have the high risk to reward traders, who make tons of money by carefully selecting and filtering trades that offer small risks but huge rewards. Their risk to reward ratios are large, but their accuracy or trade frequency is low. They rarely trade, because their filtration methodology keeps saying “not yet”…but when they do take a trade that wins, its a big payday and their wins wipe out many losers.
[/QUOTE]

You are mixing up “high risk to reward” and “low risk to reward”…

“Their risk to reward ratios are low, but their accuracy is high. Each losing trade wipes out a few winners, but the losses are few and far between”

A “low risk to reward ratio” would mean risk is LESS then the reward… Therefore a loss would not wipe out a few winners as a single loss would be smaller then a single win.

A ratio that is stated as “X to Y” is written as X:Y or in fraction form as X/Y… If “risk” is X… Then the only way to get a low ratio is if risk is smaller then reward.

[QUOTE=“3DApex;522335”] If you have $500, it is totally possible to turn that into a 6 figure income in 2-3 years. We have one student who did in 1 year.
[/QUOTE]

Lol… Calling shenanigans on this. rolls eyes

I have actually developed a trading robot exactly for those reasons… too many emotions for a human being and too many mistakes can be made by a human being.
The robot takes my trades in lightning speed and puts in a stop loss and target at the same time (bracket order), then it trails the stop even higher than the entry point and locks in a point (I’m running it on futures contracts, that’s why points and ticks and not pips). It constantly calculates the algos, fibis and ergos and takes me out of the trade if it seems to go bad. This far we build a small group of fellow traders within the nation and are on screen share chat and phone on a daily basis to compare settings and results.
Just on the s&p500 (ESU3) so far we have an average of more then 10 points per week, which is quite a lot!
Check out my profile to find out more whoever likes.
Keep up the good trading guys!
Respectfully,
Mike

[QUOTE=“enoch7;522262”]For the record babypips $500 to 1,000,000 can definitely be done. I know someone who did it. All it takes is compounding and consistency think about it.

If you turn 500 into 2k (which there is no doubt about) then you turn 2k into 6k (no doubt about that) you turn 6k into 15k (no doubt about that either) then you are well on your way to your first 100,000… This 100k depending on your skill, determination and consistency will also turn into your first million.

It can definitely be done, its just that majority traders start from 10k to 1million.

And it can be done within 1.5 -2 years suprisingly…[/QUOTE]

Great post .
My mentor was my old boss - he managed to get it done in 15 years . That been said when he hit 300k he use most his account balance to buy a house .
With me been 29 yr young . I would love to Retire at 45 / well at least live more comfy

Even better I would love to see us all hit our target goals

I’m trading up to anything made above that for the month gets withdrawn… focusing on only two pairs EU and EJ…
welcome to forex
good luck