A bet with a friend over too much beer started all this off ! James knows that I regularly double & treble my forex trading accounts so the initial challenge was to turn $1000 to a million. It can be done as I stated in this article;
http://www.forex-fxtrader.com/compound-forex-profits.html
BUT it takes too long to get the momentum going.
The easiest way I can explain this is to think of trying to push a huge boulder up a hill. First you need to get the thing to move just a centimetre, then a metre etc until you reach the top of the hill. Once you get it going, it gets easier.
Once it reaches the top it will gain a life of its own as it flies down the other side. Finally, its own momentum will carry it forward.
Also, to be perfectly honest I would be bored rigid. In my normal forex account I am trading to make a living. Therefore for all the effort that this $1million challenge entails I really couldn’t be bothered if I was only staking 30 cents a pip.
By the end of month 1 to have only earned $300 for a lot of hard work would be demoralising.
However, the other side of the equation is that I want to show how the average main in the street, with a little money & some forex training can achieve great results. So we agreed on $2000 start up capital.
The low start amount does create problems of its own. It tends to make me more jumpy & get out of my forex trades too early. This is because it is vital to not lose in the early stages.
Also, the problem is compounded by the fact that I need to place my main account trades first. Make sure that everything is O.K before I can go to my mini account. The result of this is that the market has often made some of the anticipated move before I have time to place the trade.
I still trade my larger account for longer & make a lot more money per pip & will do with this account once the balance reaches the $10.000/ area.
Hopefully it will inspire those of you with limited capital. Those of you with less capital need to set a target of $1000 to be able to try this.
Hi Mark, enjoying your blog. I do wonder though, don’t you think most beginners and amateurs who trade with $1000 will lose their money no matter how many courses and tutorials they take? Once you start trading live so many emotions come into play. With so little money all you can think about is not losing your money and with that mindset it seems all you do is make one mistake after the other.
you are right that emotions are the biggest problem in forex. fear of losing being the biggest. for anyone down to their last $1000 forex is not the solution. demo trading is the best way to learn. the next step for me would be one of the new micro accounts where you can trade for cents per pip. that way you get the feel of having real money on the table but any losses are only small. similarly you should risk maximium 5% of your bank per trade. that way you have to have 20 losing trades to wipe yourself out. if you start to lose, stop & go back to a demo.
Hi, I know what you are saying BUT on that principal we would never try anything new ! marc
Congrats on a successful challenge Marc. I’d like to propose something practical on how to deal/dissolve unwanted emotions when trading. You see, we don’t have to be victims of our emotional issues, we are winners and pro-actively create success; the same approach applies to emotions http://TwitPWR.com/EFT/. I use this method prior, during & after trading. And as a bi-product I nearly cured my shortsightedness too ;o).
Dagmar
Trading results that make you say W.O.W.
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on your challenge how many lots at the end you need to be trading in order to get your target. risk at the end is huge and more than $50 per pip. I know consistency and final balance at the end of day is what matters, but at what cost?
good point. i hadnt thought of that ! truth is that the maths is correct. the reality will be that fear will come in to play. Here we go again, fear & greed ! For example, I start to feel uncomfortable at the moment when I am risking more than $2000 on a trade. Equally, last year i was uncomfortable when the risk per trade got above $500 then $1000 & $1500 ! I can only presume that as i develop a larger bank, i will get used to it.
In truth the solution will likely be a compromise. at the outset i will risk 5% of my bank per trade ($100). As i said in the original challenge i will likely reduce that to 3% once we hit $10.000. At some point that will probably reduce to 1%. Hey, if we have only achieved $500.000 after 2 years & it takes 3 years to reach the target, I won’t be too disappointed !, regards, marc
by the way your comments r great . very helpful thnxs!!
Marc,
First off I would like to comment on your site and your articles. I am relatively new at trading but have been on quite a few sites but yours even though it is relatively new and you have just started it you have a fine start. The big issue is the lack of hype and bullshit and just plain down to earth advice without trying to sell anything other than an option for others to follow in your footsteps.
Having over 30 years of business under my belt I look at this a bit differently and all the articles on risk management give me a bit of a laugh. Now don’t get me wrong I commend you and other good advisers out there to preach the cautionary approach to a considerable degree so that you don’t aid in leading lambs to the slaughter. However in reply to the challenge and the concern for cost per pip getting very high it is all relative and you grow into this as you progress in any business. Also as you and so many talk about the fear and greed issues of trading and as I see it, it is a game of the mind much like golf and if your mind is under control then the mechanics of the trading take care of themselves. All I can say is I only wish in many of my business ventures and especially real estate development that I had formulas and percentages that were as easy to calculate in advance. The risks in these areas typically far out weights what is going on with trading where I come from but then I have a rather different background to most beginner traders and am most certainly desensitized to risk exposure. AS I see it with trading I have to control me for the most part but in most business ventures I have dozens or hundreds of others that I need to control, calculate or predict and that is infinitely more difficult and is the one thing that has really brought about my interest in Forex in the first place.
At any rate keep up the excellent work and selfless dedication to helping others out.
Trevor
Hi trevor. I too have 25 years + business experience behind me. When I sold up and emigrated I had 25 people working for me. Therefore within the organization we had to have a level of organisation and discipline for the whole thing to keep moving in the same direction. I find that the problems re self discipline in forex to be way harder – there are 100′s of books on trader psychology. I think fundamentally the problem is that those of us who are drawn to forex are mavericks & risk takers by nature. With characters that are likely to think outside of the box/bend the odd rule now and then & not be great at following rules. If you can transfer your business discipline into any kind of trading you will go far young man ! good luck, marc
Hey Marc,
I’m new to the site, just joined today, have you started the challenge yet and will you be posting the trades you will be looking to make before you make them so we can follow along with you?
Also, did I read somewhere on the site you will be doing this with only LMT signals?
Thanks for the great work and all the info you’ve made available!
Tim
Hi Tim. i keep getting delayed with the challenge. Have new computer system arriving at the week end and hopefully will start early next week. i am using the lmt a lot at the moment. When it works it is phenomenal, but all systems go through periods when they dont work so well. I have a number of strategies to fall back on. regards, marc
Hey Marc,
Good luck with the computer… I was still wondering if you will have an area for the challenge where you will be posting the trades your looking to make so we can copy your success!
LMT seems to have a lot of conflicting data, daily trend up, 4 hour trend down and vice versa….I think we should wait to take any signals until the trend direction agrees, your thoughts?
Thanks, Tim
Hi tim, Re the challenge. It is my intention to use the lmt wherever possible. You will have exactly the same information in front of you as i have. I also post advice here on the blog, to teach you how to learn for yourselves, for example last weeks http://forex-fxtrader.com/blog/potential-400-forex-pips-gbp-monday/I simply have’nt time to do a tipping service. I am trialling one at the moment that a member recommended and it costs $299 per month. If enough of you want to pay me that much, I’ll take on the staff to do it !! Re the conflicting data. The markets are choppy at the moment, but i have advised here and in the advanced rules that the safest bet is to only take trades where the 4 hour & daily charts are in agreement ie both say up or down. Marc
I am seriously encouraged. I know a person can achieve alot with discipline and focus. I am willing to take thus journey.
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