Earlier than we start, simply know, that is all easy in idea, however tough in apply.2) Reasonably priced Threat
Begin off with no matter you take into account “inexpensive” threat.
For the sake of this thread we are going to simply say $50.
3) The Psychological Perspective
You may have to deal with it like digging a gap to discover the buried treasure. Wins make the opening deeper.Losses make the partitions of the opening cave in.
4) Do not Consider the Cash, Suppose About Web Profitable Trades (NWT)
Whenever you use a 50% cease loss and 100% take revenue, a dropping commerce will solely trigger you to lose the revenue you made on the final commerce. Whenever you scale your leverage down to compensate for the loss, a profitable commerce will get you again to the place you have been earlier than the final commerce.
For this reason you should not take into consideration the cash, however take into consideration the Web Profitable Trades (NWT).
What’s a NWT? It merely means what number of extra wins you’ve gotten had than losses.
5) 9 NWT = 100,000% Achieve
When you’ve got 9 Web Profitable Trades, scaling up after every commerce, you’ll make a 100,000% acquire.
9 NWT examples
9 wins 0 losses
18 wins and 9 losses
30 wins and 21 losses
50 wins and 41 losses
150 wins and 141 losses
You get the purpose? So long as you get these 9 Web Profitable Trades, you’ll make a 100,000% acquire.
6) The Math
T1 -Steadiness $100 – Threat $50 – Take Revenue $100
T2 -Steadiness $200 – Threat $100 – Take Revenue $200
T3 -Steadiness $400 – Threat $200 – Take Revenue $400
T4 -Steadiness $800 – Threat $400 – Take Revenue $800
T5 -Steadiness $1600 – Threat $800 – Take Revenue $1600
T6 -Steadiness $3200 – Threat $1600 – Take Revenue $3200
T7 -Steadiness $6400 – Threat $3200 – Take Revenue $6400
T8 -Steadiness $12800 – Threat $6400 – Take Revenue $12800
T9 -Steadiness $25600 – Threat $12800 – Take Revenue $25600
7) Cease Loss and Leverage
This needs to be fairly self evident however right here it goes
Should you use 300:1 leverage, 17 pips is your cease loss. Your goal is 34 pips.
Should you use 200:1 leverage, 25 pips is your cease loss. Your goal is 50 pips.
Should you use 100:1 leverage, 50 pips is your cease loss. Your goal is 100 pips.
Should you use 50:1 leverage, 100 pips is your cease loss. Your goal is 200 pips.
8) Picture #1 – Digging for Treasure (Web Profitable Trades Idea Illustration)
9) Picture #2 – Instance of a 200,000% acquire in 4 days of swing commerce the 30 minute timeframe
10) What to do after making $50,000
After reaching $50,000 (or no matter you’re feeling comfy with), you need to begin buying and selling decrease leverage and decrease dangers. Here’s what I might do, however you are able to do no matter you need.
a) assuming i made the $50,000 earnings in 1 yr or much less, i might be taxed and solely have $35,000 to $40,000 remaining (except tax free)
b) i might take the $40,000 and try +to make 20% features each month, which might give me round $400,000 at the yr finish, and after taxes i might have roughly $300,000 remaining.
c) now i would cut back my leverage by HALF, and commerce the very same approach i traded the yr earlier. i might goal for 10% features monthly, and at the yr finish, my earnings can be $600,000 with a complete steadiness about $900,000. after taxes remaining steadiness can be about $750,000
d) the subsequent yr i might goal for 6% monthly, and double my cash by yr finish to $1.5 mil. repeat for subsequent 5 years and retire (semi retire, i might nonetheless commerce weekly charts, simply no scalping, in all probability extra inventory and commodity investments to be trustworthy)
Utilizing 1:4 RISK REWARD and preliminary cease lack of $25
Account steadiness = $50, giving two makes an attempt to get going.
Threat = 50%
Reward = 300% (4 fold)
$50 whole, first commerce threat $25
Win = $150 whole
Win = $450 whole
Loss =$225 whole
Win = $675 whole
Win = $2025 whole
Loss = $~1000 whole
Win = $3000 whole
Win = $9000 whole
Loss = $4500 whole
Win = $~13000 whole
Win = $39000 whole
Win = $117000 whole
9 wins, 3 losses.
The order of the wins and losses would not matter.
This thread is open for dialogue, be happy to ask questions or make observations..