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Old 08-29-2008, 10:39 PM
gtatix gtatix is offline
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Join Date: Mar 2008
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$1000 to $1000000 - Can it be done?

I did some math. I don't think it is in any way outlandish. I will share for viewing and discussion purposes. I don't want to waste electrons printing dry information but to see the math may help understand my observations.
Let us say we can make upwards of 100 pips per week. For argument sake let us make a pip $1 per 1 lot as if we were trading mini lots.
Let us risk 6% of capital per trade. If we had $500 we would be risking $30 or 30 pips to make that same 30 pips. To make a net total of 3 good trades of 30 pips per trade a week would net 90 pips.
Say we are happy to net 15% of our capital each week.
This would require - at most - 6% risk of our $500, a maximum of 3 times per week. I don't think this is too outlandish. These numbers would net 90 pips or $90 gained of our $500 which would be an 18% return on our money - in the week. So say we are happy with a 15% return on our money each week. We would only need to initially net $75 which would be 3 x $25 trades which would be 3 trades risking 5% of capital per trade.
Now, this is where the math comes in. Watch as we COMPOUND our CAPITAL each week. I used $500 as a base to show the 1 pip/$1/1 mini-lot relationship. If we were to use 6% of $1000, we would risk 2 mini-lots where 1 pips = $1 thus looking for $50 to $60 per trade - 25 to 30 pips per trade won - netting our 75+ pips per week - which is less than the 100 talked about earlier - or 15% or more on our $1000 as 1 pip is now worth $2 and we made 75 pips in the week. 75 pips x $2 per pip = $150. $150/$1000 is a 15% increase to $1150.
Okay, I am typing this on the fly so I hope I haven't lost you. If we are trading smaller lots - micro, we can trade fractions of lots as per a mini trading method. If we are trading standard sized lots, we could use a mini account to trade "partial standard lots" allowing for sizes such as 1.1 lots, 1.2 lots, 1.3 lots etc. This is important because we would want to increase our account by 15% per week, then we want to risk 5% to 6% of our capital each time our capital increases to gain in a compounded manner.
Basically, we are compounding 15% on our new capital each week. This based on the ability to net a minimum of 75 pips per week at $1/pip/mini-lot traded, increasing lot sizes as account balance increases.
This is what it could look like rounding out the cents values:
1) $1150 2) $1322 3) $1520 4) $1749
5) $2011 6) $2313 7) $2660 8) $3059
9) $3517 10) $4045 11) $4652 12) $5350
13) $6152 14) $7075 15) $8137 16) $9357
17) $10761 18) $12375 19) $14231 20) $16366
21) $18821 22) $21644 23) $24891 24) $28625
25) $32918 26) $37856 27) $43535 28) $50065
29) $57575 30) $66211 31) $76143 32) $87565
33) $100699 34) $115804 35) $133175 36) $153151
37) $176124 38) $202543 39) $232924 40) $267863
41) $308043 42) $354249 43) $407386 44) $468495
45) $538769 46) $619584 47) $712522 48) $819400
49) $942310 50) $1083657

15% compounded each week nets over $1000000 in less than a year. Is this practical? Perhaps. Is risking 5% or 6% of your capital too risky? Maybe. Can you depend on 75 pips per week? No, but this is a conservative number that is far under many unfounded claims and still under what Nick has offered as an average - of 100 pips per week - at this forum/site.
Is this impractical because you can't trade fractions of lots? No because you can trade fractions of lots depending on the account type you have - standard or mini or micro - and the broker/dealer you are with.
What would this take to do? Discipline and the fact that you can actually make at least 75 pips per week.
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