Today I was looking through my broker’s (FXCM) website at Aprils ‘King of the Mini Account’ Winners.
The person in first place had a 500% gain!!! started with $2000 ended up with $13950! They mostly traded the EUR/USD.
But what I want to know is what kind of system they are using, they placed orders well before the price went up and had gains of 50 pip daily and up to 120 pips.
Seriously, How do they do it? Experience im sure, but what techniques do you think they are using?
These things tell you absolutely nothing of value. The issue is what risk did they take to achieve that. I would be pretty certain that the risk would be sufficient to guarantee a complete wipeout sooner rather than later in their career. Remember the fable of the Hare and the Tortoise! If your gains come from taking on excess risk then ultimately your life in this business will be short
This is why I love this Baby Pips site. You learn how to be around
for the long haul!
Thanks for the question and the answer guys!
We also dont know how many people were involved in the contest. If its a one in a million chance that those kind of profits could happen, and there were a million traders involved, well it could be quite reasonable to see that kind of number.
What it basically comes down to is the fact that FXCM is interested in keeping newbie traders beleiving in the get rich quick idea. The more newbie traders they can suck in like that the more liquidity for their veteran traders.
Have you used FXCM as your broker before, if so how long? Im interested in people that have had real experience with them, cause there are so many people that spread lies or rumors, and then those lies and rumors get spread more.
Honestly, i have never had a problem with them. They offer some of the best info i have found so far, except for baby pips, of course.
Also the contest is for anyone with a mini account and a balance over 1000 bucks and you are automatically entered.
Let me see if i can find a link to the contest winners, you will be able to view their buy and sell actions for the month. Ill post the link.
Calm down, Calm down … I was afraid my comments would be interpreted this way. If there is anyone who believes that the major brokers are not trying to steal from us it is me. See my thread:
http://forums.babypips.com/newbie-island/13024-evil-broker-myth-busted.html
When I first started trading I was with them and remember seeing those numbers that FXCM posted and it made it easy to believe that I too could achieve those kind of numbers with relative ease. Thats just not the case. This is hard work and not a get rich quick scheme.
I respect FXCM’s business plan, and part of that plan includes showing new traders what is possible with an account. However, this must not be misconstrued.
I hope you did not take offense because you are one of the newbies out there providing liquidity trading a live account. You want to be on the other side of the coin, you want to be the veteran non-emotional hard working trader who takes money from those who emotionally trade these markets.
And yes, if your going to make money in Forex, you will be taking money from those with less experience. This is an OTC market.
I hope that you were not offended by my comments because all I want is the best for you and your trading.
Happy pipping.
Think of a coin toss say 10 times. If I take enough participants then a handful of them will come up with 10 heads. If they bet their whole account each time they will make a fortune. Do you see? Its not difficult to show huge gains by taking huge risks but this will not work in the long run. One tail and you are out. Ignore the results of these competitions and continue to focus on learning this business and how to identify and action low risk high probability trades
Sorry GBLilley, Didnt mean to seem offensive. Thanks for the input. And by all means i know this isnt a get rich quick business. It will take time, experience and patience on my end before i will see results.
The main reason for this post was just to figure out how some of the trades that these people made were even predicted. Thats what i want to know.
Also, I noticed someone posted about betting all of your account. Its kind of what they did. But thats the beauty of a mini account, the most you can risk is 100k lot, which through fxcm is a $1000. Check out the person in third place i believe, they used 10k, 20k, and 30k lots most of the time and still achieved higher than 300% gains. Tell me thats not skill.
Thanks for the input guys
Agree 1000%.
I am a newbie in Forex (still playing with demo accounts) but old enough to know that this kind of profit was achieved with unreasonable risk taken of each trade.
If you take the advice from people who are living from trading that you should not risk more than 2% of your account on each trade than become obvious that person who take such a risk will not stay in this business for long time moreover, he will probably loose his account in a few months.
Since I am planning to stay in this business for a long time, I will stick to my money management system - never risk more than 2% of my account.
Just my 0.2$
I just closed my account with them, I have posted some reasons for this elsewhere on this forum. My ‘feeling’ is some brokers think they make more money blowing out small accounts than growing lifelong customers. I agree completely with GBLilley’s comment:
What it basically comes down to is the fact that FXCM is interested in keeping newbie traders beleiving in the get rich quick idea. The more newbie traders they can suck in like that the more liquidity for their veteran traders.
I’m going with a fee-based broker now (EFX Group) ‘hoping’ that they will be more interested in collecting commissions for years to come than in blowing out a small account and moving on to the next.
No offense taken, knowing that I could be of any help makes me happy.
Your absolutely right, these people were taking HUGE risks.
Keep in mind though that HUGE Risks = Potentially HUGE Gains or Losses. But thats where the risk to reward ratio comes in.
These traders(the ones from the contest), know whats going on and thats why they see such big rewards. They interpret market Technically and Fundamentally and enter their trades by waiting patiently and striking when the time is right. This allows them to set stops closer to entry points allowing a low risk high reward situation.
Example:
With a 100k lot(or 10-10K lots of a mini account), pips are worth $10. If you set a stop within 10-15 pips, thats only 5-7.5% risk in a $2000 account. Also if you are anticipating a gain of more than 40 pips than your risk to reward ratio (1:4) is higher than that of the recommended minimum of 1:2.
Me personally, I wouldnt risk that much of my account mostly because im inexperienced and im still trying to get the hang of spotting reversals and using incoming news to help guide my trades.
Also I like to think that what has been taught to us, by babypips.com and other Forex training, as far as knowledge on risk to reward and percent usage of our accounts or any key point for that matter, to take it more as guidlines and less as rules. Use your own judgement while taking others’ advice.
Bill gates followed the rules of getting a higher education by going to college but ended up dropping out because he saw that he could do more OUTSIDE the box of rules. Look where he is at today. He took the risk of dropping out to persue something more of value to him, and others, and the reward was a giant company called Microsoft. Still to this day Microsoft is taking risks like the release of the Xbox which has obviously taken a huge majority of the gaming industry and has been very successful. Even terrible risks, such as releasing Windows Vista(i feel for ya if you have it, still sportin XP,
) and it seems to be failing miserably in many aspects of the PC world.
Let me reiterate again. You will have gains and losses. The more risk you take the more you can potentially make. All you have to do is play the game and have the mind set to win.
IBFX runs a simular contest, but the post resluts for the bottom 10 as well, and typically they are -100% each and every month.
The winners seem to always be in the 300-500% range.
Big risk = big reward or big FAILURE.
The key is to find what suites you best, if you are willing to take the risk, then in my opinion go for it, but heed what you learn here, because these veterns know what they are talking about.