The optimal size for account doubling

Trading Systems
1

I have come to the conclusion that there is a minimum capital needed for account doubling

Let Me Cook

When I open a trade using 0.01 lots on EUR/USD, I need a margin of 0.36 to open the trade and 5% of 7 is 0.35
If I manage to make a dollar a day for 8 days, I would have a total of $15 at the end of the eight days.

At this point, I increase the lot size to 0.02 and trade for another 8 days but since I’m using double the lot size, I’m making double the profit but also need double the margin to open a trade which means I need a margin of 0.74 and 5% of 15 is 0.75.

At the end of the next 8 days, I would have a total capital of $31 and so I would increase the lot size to 0.04

Here’s what it would look like if I kept doubling values every 8 days

Day 1 - $7
Day 8 - $15
Day 16 - $31
Day 24 - $63
Day 30 - $111

Assuming I traded only 3 days a week, it would take me 10 weeks to nearly 16X my initial investment and since there are 52 weeks a year, that number has the potential to reach 80X which means I would have $560 by the end of the year. Now, all the trades I make in a year probably won’t be a winning trade and my math may be off, but it shows you how much money you could make in a year even if you don’t have capital that’s 6 figures and even if you only had $70,000, you would have $5 million by the end of the year.

I believe this it called The Law Of Compounding where it becomes easier to do something (in this case making MONEY) in the same amount of time because you are reinvesting what you made back into the system.

This strategy could work for any market, including stock, if your margin is around 5% of your capital.

If someone tries to do this, please let me know if this work because I can’t try it for myself since I don’t have that much time :upside_down_face:

2

Compounding is the way to maximise whatever capital you have through trading. But the question is always the same of course, do you have a strategy that will provide that much profit every day?

1 Like
3

No
But I don’t need to make that much profit everyday. If I end up making $8 on the first day from an NFP trade or something, I would just double the lot size and continue on with the plan

This is only a theory, and in the world of trading, where 70% of new traders quit after the first 2 years, it may remain that way and just serve as a reminder that even though trading isn’t a Get Rich Quick scheme, it could give you the same result at winning the lottery just with higher odds of you succeeding but at a much slower rate :upside_down_face:

4

Keep going. I can only admire your spirit.

1 Like
5

This will help you with sizing. Be prepared to blow accounts, but have multiple smaller accounts. This guy has studied compounding in his career: https://youtu.be/vfi2cbB29lc?si=XY6bVp2GtMSYfqq_ I dont want to go further, but watch and listen to all his videos on the market. May open some new ideas.

1 Like
6

7

So
My calculations were wrong
What I did was I added 2 to the 16X then multiplied it by 5 then multiplied that answer by 7.
I have discovered this won’t work because the ratio between total amount of money you have after two consecutive cycles (a cycle is the amount of time before you double your lot size. In this case, 2 cycles = 16 days) isn’t always the same. E.g. the amount of money after the 2nd cycle divided by the amount of money after the 1st isn’t the same as the amount of money after the 3rd cycle over the amount of money after the 2nd.

Because I was bored, I have now come up with a formula to solve this issue

equation

A - Total Amount after Cycles

I - Starting Deposit

n - Number of Cycles = equation

T - Total Days Traded
t - Days for One Cycle

Using this formula, at the end of the year, a total of 17.1094 cycles would have been completed.
If we plug this value into the formula as n and I = $7, the total amount I would have at the end of the year if I only traded 3 days a week is $1,131,161.682

By the end of the next year, if I have done a total of 33 cycles since I started, I should end up with $68 BILLION

image
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This may not be right so if anyone knows anything wrong with my maths, let me know

8

Whether your math is right or wrong doesn’t really matter.

What matters is what @tommor said above:

2 Likes
9

:upside_down_face:
And you don’t need to make that much in a day. If you made $3 every week, you would still end up with $1 million by the end of the year

10

That guy is a degenerate gambler who gets lucky every so often, so far, so good.

Perhaps good advice on that subject but never for trading advice.

1 Like
11

Ya 1:1 RR is for fools.

2 Likes
12

There are many here who won’t realise you mean it ironically or sarcastically but will think you mean it literally
(because they’ve always been wrongly told in forums that they should aim for 1:2 or even 1:3 R, and they’ve actually believed and swallowed that “advice” because it gets reinforced all the time)!!

2 Likes
13

But why tho?

14

Maybe this is more useful as a guide that tells you how much capital you need to have before you double your lot size

15

I have come again

In my previous posts, I showed a lot size that increased exponentially every cycle. But now I wonder what would happen if the lot size was determined in a different way.

Instead of calculating the lot size by checking the number of cycles that have passed and raising 2 to that number, I will instead find 5% of the amount at the end of a cycle, divide that number by the margin, round that number down, and lastly, divide it by 100.

So if the amount is $63, the lot size I would use would be:
equation

image

As you can see, I have embraced all the inconsistencies of the theory because, as you can see, neither of these graphs behave similarly.
The line that represents the weeks elapsed is kinda wavy because the number of weeks elapsed almost follows a linear pattern

image

Whereas the line that represents the lot sizes over the 30 weeks has a curve similar to that of an exponential function.
The same is also true for the amount.

image

If I manage to have a win rate of 100% and all trading conditions are perfect. I would end up with $19 million at the end of the first year.

image

But since that isn’t possible in the real world, let’s say I was making half of what I was required to make per day. At the end of the year, I would still end up with $36,015 which isn’t to bad if you consider the fact that a 5-figure final amount was produced from a 1-figure capital.

Most likely, I will only end up using this spreadsheet to know what lot size I should be using when a certain amount is in my account for Optimal Account Doubling Efficiency but it let’s us know what kind of profit trading is capable of producing.

image
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***Till Next Time… :upside_down_face: ***

16

I have new findings, if I round the lot size to the nearest number (if I get 10.2, I round it down to 10 and if I get 11.8, I round it up to 12), the gains increase by a fair amount.
Instead of having $19 million, I end up with $26 million by the end of the year.

image

And if I was making half of the daily quota, I would end up with $66,723 which is an $30,708 from the $36,015 of last time.

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I hope someday, somebody would be able to test this theory and see if it would actually work in the real trading world but for now, it remains only a theory.

SPREADSHEET (22.6 KB)

Imagine if a broker used this as advertising material.

17

I ran a backtest while also applying the “Account Doubling” concept and within 10 days, $700 turned into $7000

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Over the course of the next 9 days, the $7000 turned into $1744.70

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This is a chart of the 10 biggest winning trades when the lot size is fixed (blue) and when the lot size changes (orange).
The difference between the biggest wins on on the fixed and dynamic balances is $2016.80
and the difference between the biggest losses is $2,151.18.

image

From this picture, you can see the account balance with a static lot size (orange) and a dynamic lot size and as you can see, the account balance definitely does backflips more frequently with a greater magnitude so if you want to try this out with real money, probably enter the trade then stay 2 metres away from any device that lets you see your P&L because it may induce a heart attack :upside_down_face:

P&L GO CRAZY THO!!