Hello Everyone!
I keep running into the following trading table often promoted by a well known FX educator, and always wonder about it.
Clearly the goal here is trying to reach $2000, ASAP. But the numbers suggested as daily profits seem rather arbitrary and not even very nicely distributed. In addition, the last 2-3 days of profit increases seem very big.
So I tried to recreate this table from scratch (in Excel) to better understand what is going on, in hope to clarify the risks and other money management issues in trying to apply this to a small account. But as I am fairly new to FX, I simply do not see how to properly evaluate this table. Most people on these small accounts, are using 1:500 leverage, so with an RR of 1:1 (as shown in the picture), this seem extremely risky.
So I am asking what BabyPips people think what to make out of this.
Perhaps help answering questions like:
- What is the better approach, to keep the Profit “fixed” or to keep the “LotSize” fixed (or something else)?
- How big SL can these trades handle?
- What is the greatest Draw-Down I can expect using these huge lots?
- Also how does this depend on the leverage? (e.g. 1:30 vs 1:500?)
- Is this plan at all realistic, even if very risky?
- What is the risk involved in each trade?
- Is this progression possible? (With what WIn/Lose ratio?)
For sake of argument, let’s assume we have an account of:
50 USD @ 1:500 leverage with a 50% margin requirement.