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Journal of a Trader, December 4th

December 4, 2022 by XYZ Leave a Comment

With the year coming to an end, it’s almost time for “new” resolutions. Most of us know all too well the old age resolution “hitting the gym” / “getting back in shape” which maybe last for 1-3 months max then go back to our “normal” daily routine. The following table shows the main categories for new year’s resolution.

If you add Living healthier(23%) + Personal Improvement (21%) + Losing weight (20%) this accounts for nearly 65% of ALL resolutions across the nation. That’s a staggering number, hence why all health products are making so much cash throughout the year. It’s literally a gold mine if you are a product reseller with a trusted brand.

In 5th place stands “Financial goals” which I thought would be at least in 3rd place considering more than 80% of US population is actually in debt and living well beyond/above their means. I guess you could say money becomes secondary if you aren’t healthy enough to earn or enjoy it. However… If you don’t have the money to pay those medical bills and prescriptions, how can you get out of this situation? How can you treat yourself to the doctor in order to become healthier if you don’t have the means in the first place to go see a doctor? At the same time, the healthier you are, the less chances you are to go see a doctor…

In 9th place you have “Stop smoking” which I am now close to 2 months clean. I have to say it was much easier than I thought, minus all the random headaches which lasted for a good month. Haven’t had any headaches for a while now that I think about it. On the flip side, I go to bed much earlier. I used to stay up till 1:00-2:00 AM now I’m in bed usually by 22:30 on weekdays, or maybe I’m just getting old and loving these moments of doing nothing in my comfortable bed, just chilling and relaxing while watching some stupid comedy TV-show on Netflix.

Speaking of TV-shows, lately I have been watching re-runs of a show called The Ultimate Fighter, where 14 aspiring UFC MMA fighters get together and fight each other through several rounds until you eventually end up at the final and the champion wins a UFC contract and 250,000$. With 14 aspiring fighters, they will be split into 2 teams with both teams having their own coaches and trainers, who are usually current champions or previous champions and belt holder in their own divisions, so you know they are being trained by the best guys you can find in the sport.

I personally don’t like to see men fighting each other, it reminds me of the gladiator days where you basically fight to death for your freedom, since most gladiators were slaves, only this time you basically purposely fight another and cause tremendous amount of damage and sometime permanent damage just for money… How can you go and kick or punch someone till they drop on their knees and causing serious damage just for money… There’s gotta be another way you, as a human being, can make money without having to injure someone else… A garbage collector or city bus driver makes more than the average UFC fighter make in a year.

However, I have to give my utmost respect to these guys for the amount of dedication they put in their craft. These guys are beasts. They are always at the gym doing either cardio or training and learning new techniques, 7 days a week. It’s quite impressive to see them putting all their time into their craft. The amount of physical and mental energy required to keep up with this lifestyle is very intense. Imagine getting beat the shit outta you for 15-20min straight, broken arms, knees, shoulders, ribs, you name it, and once the fight is done, you ask for more and basically go back to the gym and hope you don’t get your ass whooped another time at your next match-up. Not to mention, most of these fighters don’t have jobs or revenue until their next match with the prize money not enough to feed a family, unless you are a famous UFC fighter with lots of publicity and endorsements. Most don’t get this far.

Getting your ass whooped

This brings me to my resolution, what would happen if I put the same amount of work and energy towards trading? All I have to do is wake up early, do a 1-hour daily routine before the market opens, read some news than look at potential setups for the day/week and repeat the next day. Sounds much easier and safer as a way of living and earning. The only thing which would prevent me from doing this is lack of discipline. Not many world champions become great by casually cruising when they feel like it. All world class athletes and champions are able to perform at this level because of pure discipline and dedication.

If I want to quit the corporate world within 2 years from now, I must start applying these same concepts on a daily basis. If you had the chance to make well over +200,000$/year and growing by just reading news and looking at charts rather than getting beat up with possible permanent damage, would you take the opportunity? Seems much easier…

Filed Under: Journal

Journal of a Trader, November 13th

November 14, 2022 by XYZ Leave a Comment

Here we go with another entry in my digital journal. Last week wasn’t an easy week, had to figure out what I wanted to do in the future, either go full corporate or achieve financial freedom just like I always wanted to.

After spending a week trying to solve this very complex problem, I have chosen financial freedom. If it fails, worst case I can go back to corporate and still make more than enough money to get by and more. But somehow, not many people will understand this but money shouldn’t be an objective, it is merely the result of the work you have put in. When I talk about my algorithms, people always assume I did it for the money when in fact, it was just me trying to prove that a set of instructions or algorithm can beat the human mind. A concept which isn’t obvious for most.

This week however, I was faced with another challenge in life, how do I get there? How do I make the most of my time in order to reach the quality of life only a few can dream of? In order to make it happen, I really think changing habits is probably the number one thing a person should do. I have met plenty of people from different walks of life but only one person made me re-think about my actions, my health and future. I don’t know if it’s a sign of maturity or wisdom, but my perception of life changed.

I used to have bad habits which I carried on for many years since it was helping me get through so many obstacles and eventually felt like it was a mundane action with no consequences whatsoever. Sometimes forgetting about the reality you are faced with is somehow necessary, take your mind off, cool off and just survive for another day was the motto for so long. After so many years, I am proud to say I am now clean. Deep inside I always knew this day would come but I just needed a reason to fully commit and put all those bad habits aside.

It’s kinda weird to say, my family wished I had quit so long ago but it never hits you as hard as when you actually re-evaluate your life and goals and realize, if I want to be with a person who I care a lot, wouldn’t it make sense that I start taking care of myself too? We all want to be with someone who will push you to new levels, further in life and somehow expect them to be “perfect” depending on your values and priorities. But, if you look yourself in the mirror, are you the best you can be? How can you expect so much from another when you yourself aren’t even willing to make some changes in your own life?

With this in mind, I have now quit smoking. I thought it would be a bit harder than what I experienced but I guess a huge part of it was that I just needed the right reason or in my case, the right person to make me realize it was time to start a new chapter. It has now been a full 4-weeks clean and surprisingly I have no “need” or sudden “craving” for it. Of course I had to go through withdrawals, mostly headaches and sudden “heat waves” or randomly sweating. Slight mood changes once in a while, I guess kinda like irritability, peaked at 2nd week but overall, pretty smooth experience. Headaches however, were very frequent throughout the weeks, just random times during the day out of nowhere even if you had all 3 meals and enough water, vitamins and sugar. Eventually, all these withdrawals symptoms were gone, took about 3-4 weeks to be back to “normal”.

Now that I have quit smoking, I am now focusing on healthier nutrition and try to put some effort into losing weight and getting back in shape. All these years of junk food and bad diet eventually got me fat. There is no other way to put it. Eat junk food, get fat. No exercise and spending all day in front of a computer, you will get fat. The worst part is that all the fat is concentrated in my belly area, which is also the most difficult area to lose/burn. But I think if I genuinely do a solid push, I won’t have to worry about it anymore. I suppose time will tell…

You may wonder, how does any of this is related to trading? Well it’s simple, the happier you are in your body and mind, the clearer your thoughts are. If your thoughts are no longer cloudy or distracted from useless or meaningless things, that means you will probably spend more time working towards your goals and eventually make it happen. Be happy with what you have become, all the obstacles you’ve been through and you are bound to succeed no matter which path you choose.

If you are lucky like me, maybe you will meet someone special in your life who without even asking will simply wake you up, help you see things from another perspective and that my friend, is a life changer. Just remember, it’s a team effort, teamwork.

Always give, the more you give the more you will receive, you just never know when.

Filed Under: Journal

Journal of a Trader, November 7, 2022

November 7, 2022 by XYZ Leave a Comment

First entry in my journal. Not sure how this will turn out but here we go.

Over the years, I have been honing my skills at trading, in particular the foreign exchange or forex market in which I have developed and built countless of systems with the main objective of proving that an algorithm can beat the human mind at reading and navigating the market.

Fast forward to now, my algorithms and strategies are outperforming far beyond my initial objectives. In a sense, it’s almost too good to be true. I mean, who knew this “kid” would actually be able to solve the market on his own, just by reading and trading from his bedroom, keeping 100% focus on the end goal and removing all unwanted noise from his daily life.

Well all this comes at a price. When you have such big dreams at solving one of the most complex problems/environments known to man, other than sending man on the moon, you are bound to have a few people of your entourage either telling you to give up or make fun of you with such condescending attitude. As you get older, you realize your entourage gets even smaller for whatever reasons, let’s just call it life.

I have now reached a point in life where I do not know which path to follow. Having always secured plan B’s all my life, making sure I graduate from school, go pursue higher education going through the hardest university courses and now climbing up the corporate ladder, you start to wonder, what happened to plan A and living your dreams? Isn’t it the reason why you started this whole trading journey in the first place?

Having spent 1/3 of my life trying to reach financial freedom, I now found myself sucked into what I wanted to run away from, this corporate life. The money which comes with it is definitely very attractive but at the end of your career, what have you really accomplished? All you did was basically to stand in good terms with everyone at work and do the job you were hired to do. Eventually you get promotions and raises until you pretty much decide that you are now at a comfortable level where your income can provide for all your basic needs and more if need to be.

Past few weeks have been different, maybe it’s because I am slowly realizing that the dream life I had in mind and worked for so many years is slowly fading away as I become more and more involved in the corporate world. Many people have come to me and commented about how I don’t seem to be as joyful as before and that my usual high level energy seems to be gone. I do the work because it needs to be done and I am very good at it but I have lost the motivation of going over and beyond what is asked, which is usually the way I work, I always over deliver because I take the utmost pride in my work and making sure everything is done right.

All these thoughts are troubling me and I believe it is my instincts which are telling me to re-evaluate what I want to do with my life. I am blessed with the ability to solve almost any problems thrown at me with such precision and accuracy, it is truly mind boggling how some individuals just seem to be able to operate and navigate on this level. This “ability” is causing me so much trouble lately. Imagine you could choose to be at the most senior level in the corporate world or choose the entrepreneur path and live life on your own terms and truly enjoy the experience. Which would you choose?

This question is so much deeper than it really looks. So many elements to take into account, pros and cons and so on, I don’t think even starting to list them would be of any benefits since everyone has their own values, priorities, insecurities and preferences. This question is so difficult to answer that I now have trouble sleeping. I can’t sleep. I spend 1h30-2h every night in my bed thinking about which path I should choose, going over all the elements I can think of, trying to solve this puzzle as if I was a chess Grandmaster but no luck so far.

As for now, I think the best option is to give it another 2 years doing this corporate life while I start to treat forex as a real business. With enough discipline and remaining focus on the end-goal, which is to break free from this corporate life, I do believe I will be able to live life in my own terms and be happy with whatever I will have accomplished. Only 2 years to go, stack the money up and take control of my future. If others can do it, why couldn’t I be able to?

To be continued…

Filed Under: Journal

Road to 10,000$ – Part 1, November 6, 2022

November 6, 2022 by XYZ Leave a Comment

Welcome back! After many tries at the 25,000$ challenge, I had to rethink my strategy and decided it was probably best if I started with a 10,000$ funded account challenge then use the profit to gradually level up to 25,000$, 50,000$, 100,000$ and so on.

Market this week was definitely choppy with all the talks about rate hikes and of course USD filled with events such as Non-Farm Payroll and such.

US30 – H1 Chart
US30 – M15 Chart
US30 – H4 Chart

As you can see, tremendous market manipulation and traps which I myself got caught in those traps. You can see my first 2 trades as a loss where I had to close before I reached my daily loss limit of 500$. Eventually waited until stop hunt was reached and slowly turned into sell mode. Closed my sell trades at around 32000 which netted me around 1000$, so overall we took the account from 9600$ to 10,500$.

With the challenge now halfway done, profit target 11,000$, next week will be very important to wait for perfect setup or trade “in the moment” with carefully planned lot size and risk position. My game plan is to wait for a sell setup with a 1:2 risk reward where I’ll be risking 250$ for 500$ gain and bring the account to the 11,000$ profit target required to move on to Phase 2 Verification.

Phase 2 verification will then require to start over from 10,000$ with the profit target of 500$, so 10,500$ but this time, all this can be done in 2 months, 60 days while Phase 1 was 1,000$ profit target in 30 days. Just by looking at the numbers, you can already tell Phase 2 is much more reasonable/attainable than Phase 1 where you are almost forced to over-leverage in order to meet the 10% profit in such a short time.

As for the next 500$ to make on Phase 1, I am not sure if I will keep trading US30 or move on to more traditional pairs where volatility might be less of an issue, considering all the fluctuations that is happening surrounding the USD lately. Looking at the charts, I have possibly found a very good Sell setup on GBPCHF, see below:

GBPCHF – M15 Chart – Sell Setup
GBPCHF – H1 Chart – Sell Setup
GBPCHF – H4 Chart – Sell Setup

Looking at GBPCHF H4 chart, seems like we hit the top and price is now reversing. Looking at the 15min chart and H1, it seems price is in stoploss hunting mode, maybe pullback a bit higher to last high on 15min and I am expecting the price to drop and reach the 1.105 level, for 60:420 or 1:7 risk:reward ratio as seen below:

GBPCHF – H4 Chart – Sell Setup

Another setup which looks very interesting is USDJPY H4 where the double top pattern seems more obvious:

USDJPY – H4 Chart – Sell Setup
USDJPY – H4 Chart – Sell Setup
USDJPY – H4 Chart – Sell Setup

With these levels, we would be looking at 80 pips risk and 200 pips reward so roughly 1:2.5 ratio. Now the challenge is to determine which pair would be more likely to crash and hit our target, GBPCHF, USDJPY or US30?

From a fundamental point of view, Bank of England (BoE) is expecting GBP to weakened even more and at least till end of 2022. USD is definitely in trouble for same reason as BoE but maybe in a stronger position than GBP. JPY on the other side, is also very weak just by looking at the H4 chart where USDJPY kept rising and rising and rising until the Bank of Japan (BoJ) actually had to intervene last month, something which hasn’t been done since 1998 in order to control Yen’s price value. Swiss Franc is most likely the strongest of them all, while being generally considered as a go-to asset when there is too much volatility in the market. Yen was also considered as a safe asset as of late 2021. However, 2022 hasn’t been good at all for the Yen, hence the BoJ intervention.

GBPCHF – D1 Chart – Sell Setup

From a technical and fundamental perspective, GBPCHF makes more sense to me as a Sell setup but who knows, maybe I will find another setup over the weekend and split the risk in 2 trades instead of 1 in order to get the 500$ profit left in order to pass Phase 1 of the 10,000$ challenge.

To be continued…

Filed Under: 10K, Forex

Road to 25,000$ – Part 4, October 29, 2022

October 29, 2022 by XYZ Leave a Comment

October has been my choppiest month of trading in a very long time. Somehow, I feel like I forgot how to win. Such a weird thing to say when you have been studying the markets for a decade. I think any trader will hit this phase in their trading career where you just can’t seem to win for whatever reason.

NHL – Montreal Canadien vs Ottawa Senators

This is where being able to look back and review your trades becomes invaluable since you may pick up faulty behaviors in your trading process. For myself, after looking back at all my trades, I realized something changed in my process. I was essentially trading off charts using only technical analysis without taking into consideration all the fundamental macro analysis which I usually review every month then follow how it plays out on a daily basis. I was essentially trading blind and ended up losing almost all my trades and consequently blowing multiple 25,000$ FTMO Challenge accounts.

Once you have identified your faulty processes, you can now grow and become a better trader, that is if you actually apply or correct your errors. I personally decided to go back to one of my earliest systems which was consistently profitable, a system which dates back at least +5-6 years ago and collecting dust ever since.

NZDUSD – H4
NZDJPY – H4
EURGBP – H4
GBPAUD – H1

As you can see from the history, this system is a money maker and I think it is mostly due to having specific trading conditions/triggers while searching for patterns on the market. Using the visual analysis, we realize that using partial close might actually be limiting us in our profit per trade since we won 3 trades and lost 2 trades for a total of 5 trades. By using a 2:1 ratio, 2 units win: 1 unit loss, we would then have 6 units won – 2 units loss, so 4 units in profit. Considering each unit is 50$, we would be at +200$ profit. With using partial close, I ended the week at +80$ in profit. That’s more than 2x our profit left on the table.

An alternative would be to use partial close 70% of the trade once it reaches the 2:1 profit level instead of using 70% partial close at 1:1 profit level or sticking to a 2:1 ratio and no partial close, which would then lead me to a minimum of 1 out of 3 trades in order to be profitable in the long run.

Our goal here is to have a system with a minimum of 35% winning rate. This is the minimum threshold which should be accepted based on extensive Monte Carlo analysis where we are risking no more than 50$/trade with a 2:1 Reward: Risk ratio on a 10,000$ account. We can prove this statement by using the following equity curve simulation tool: http://www.equitycurvesimulator.com/

You can generate multiple simulations using the following parameters and you will find it rarely goes in the negative.

With a win probability of 35%, you almost always end up making money if you stick to solid 2:1 ratio, no partial close.

Provided you are using a system which has an edge on the market, or at least have the perception it has an edge, let’s see what happens when we change the win probability to 40%. After all, you shouldn’t be trading a system which you don’t believe it has an edge on the market. However to be conservative, we will crank up our win probability to 40%. Let’s see what we get:

Using a 50% win probability, you basically cannot lose:

Now, a 60% win rate will take your account to next level, which basically what we have right now using our short history of 5 trades, 3 wins, 2 losses:

In conclusion, if you want to make steady money, use a 2:1 win/loss ratio, no partial close and find a system which actually has an edge on the market with a winrate of at least 35%.

Filed Under: 25K, Forex

Road to 25,000$ – Part 3, September 24, 2022

September 24, 2022 by XYZ Leave a Comment

A month later, here goes part 3.

These past few weeks were incredibly hectic, trying to balance trading and opting for a healthier lifestyle by combining daily exercises and cleaner diet.

Nonetheless, this shouldn’t stop us from pursuing our own goals and dreams, one step at a time. I have now failed 3x the 25,0000$ funded account challenge under prop firm “A”. Mostly my mistake, I didn’t take into account the drawdown rule which stated trailing relative drawdown. I think in previous post I went over the difference between trailing drawdown and absolute drawdown but in a nutshell, trailing will move your stop out level as you grow your account, while absolute drawdown means your stop out level is fixed and based on initial starting balance. Most, if not all prop firms require a 10% drawdown rule, however, in my opinion, going for a trailing drawdown is the worst mistake you can make. Here’s why.

Scenario A: Prop firm A offers 10% trailing drawdown for 25,000$ account. Your starting stop out level is 22,500$. If your account goes below this equity level you’re out and done, challenge failed. However, if you manage to go let’s say 26,000$ (1,000$) profit, your stop out level now becomes 23,400$. You have just lost a buffer of 800$. This means, you could make 40,000$ profit and the moment you lose 2,500$ from your highest achieved level, you lose the account. This doesn’t seem right because while you lost the account, your prop firm just cashed in all your money instead of you. 1 bad day and you lose all your work. Makes absolutely no sense.

Scenario B: Prop firm B offers 10% absolute drawdown for 25,000$. Your starting stop out level is 22,500$. If your account goes below this equity level you’re out and done, challenge failed. However, if you manage to go let’s say 26,000$ (1,000$) profit, your stop out level is still 22,500$. You have just increased your buffer to 3,500$. This means you can now have up to 3,500$ of bad trades to be stopped out instead of 800$ with prop firm A. This is a game changer. This means, you could make 40,000$ profit and the moment you lose 42,500$ from your highest achieved level, you lose the account. The money which you worked for stays available for you, instead of being closed out and forced to give all your money to prop firm A.

It took me 3x tries and a total of 750$USD spent to understand this cold hard truth. I would always go to 26,000$-ish, have a few bad trades going back to 25,000$ and instead of “starting” the challenge over again, assuming I still had another 2,500$ buffer to lose (22,500$ stop out level), my account gets closed because my trailing was moved to higher levels since I reached X amount in profit.

I strongly advise against signing up with any proprietary trading firm which has a trailing drawdown structure. You will get bad days, its inevitable, protect your winnings.

FTMO Comparison & Rules

I have now changed to another prop trading firm which is also the most popular one out there, FTMO. FTMO uses absolute drawdown but is considered the hardest of the challenges available due to their stricter rules, such as having to close trades on weekends, not being able to trade during news events and a 2 phases process, 10% in 30 days then 5% in 60 days. Most prop firms will give you anywhere from 6 months to 1 year to pass the challenge. Keep in mind that institutional funds make no more than 10-12% yearly.

Recently, they have added FTMO Swing Account which now allows you to keep your trades open over the weekend and can now trade during news events using 1:30 leverage instead of 1:100. From my experience, 1:30 leverage is more than enough to flip small accounts by scaling in on trades and make home runs just like I did this week, see below:

The drop at trades 100 to 120 was exceptionally very difficult to accept. The Bank of Japan decided to intervene in the market for the first time since 1998, causing extreme spikes in the market and hitting all my stoplosses in under 5min only to end up in the correct direction.

That’s the reality of forex trading and why it one of the most difficult market to trade due to its liquidity and volatility.

Extreme spikes caused by BoJ intervention

In this picture, I made +2000$ in a single day by constantly opening new positions as soon as current position reached its profit target, not even scaling in on trades, just placing bets back to back and riding the wave. +2000$ in a day, no scaling-in, and using 1:30 leverage. I think any serious trader should opt for this FTMO Swing account, you only need to be “lucky” once, and by that I mean purposely taking trades with more exposure to meet the 10% under 30 days. 5% in 60 days seems reasonable, only need to make about 150$ a week. (1250$/8 Weeks = 156$ per week)

The account is now at 26,000$, only need another 1500$ and Phase 1 is completed.
To be continued…

CF Montreal vs CF Chicago Club, Saputo Stadium

Filed Under: 25K, Forex

Road to 25,000$ – Part 2, August 27, 2022

September 2, 2022 by XYZ Leave a Comment

Last week I was able to make 2 very good trades which left me with 1 only trade to go in order to get the funded account since I am using compound risk as growth model, see Part 1, to achieve our 10% profit target.

Unfortunately, I got trigger happy and took a trade on Sunday night not long after market just opened. Trade went in the red, had to close according to plan. However, I didn’t pay attention to the trailing drawdown rule vs absolute drawdown rule. The trailing drawdown means, you cannot go lower than x% from the highest balance achieved while absolute drawdown is the maximum loss you can occur on your account base on the initial account balance.

EURCHF, +250 pips pullback

Let’s take for example a 25,000$ with 5% trailing and absolute drawdown. If you reach 26,000$ with trailing you get stopped out at 24,700$, now with absolute drawdown you get stopped out at 23,750$ no matter the highest balance achieved. Because I use bigger risk for every win, that 3rd trade which turned into a loss really hurt the account growth as I now only had less than 500$ to recover.

To be honest, I think it was more than enough to win the account on first try but after looking back at what happened, I believe I was just too in a hurry to win the challenge in 3 consecutive winning trades. I ended up over-exposing myself trying to make it all back at once and eventually called it quits after a series of very bad trading.

I have now purchased another trial challenge account and will hopefully be able to apply more self control.


Filed Under: 25K, Forex

Road to 25,000$ – Part 1, August 21, 2022

August 21, 2022 by XYZ Leave a Comment

After 3 months of hiatus, it’s time to get back on the trading scene and start collecting some money. As you know, I trade a very specific style combining both fundamental macroeconomic views and technical analysis with a simple secret behind, data-engineering.

Last year, I spent 4-6 months updating my Excel datasheets with the only objective of making it as streamlined as possible, where at any given time I can run up my own numbers and eliminate any noise or interference such as watching or reading the news from popular channels or trade someone’s else idea, 2 strategies which will make you lose tons of money.

This being said, I decided to try my luck at doing those funded trading account challenge with a proprietary trading firm going usually from 25,000$ up to 500,000$ funded account. In order to get one of those accounts you must pass a trial period where you need to make generally 10% with 5% risk, most will have time limits where you have 30 days up to 6 months to complete the challenge. Once completed, you are rewarded with a “live” account and can withdraw just like any other regular account.

However, make sure you read all the rules which must be followed in order not to get disqualified. Most prop firms will require you to put a stoploss on all your trades and you cannot carry trades over the weekend, must usually close all trades on Friday by 4-5pm. I should warn you, most people fail at these challenges because 10% gains/5% risk under 6 months is very difficult. Think about it, institutional money and investment funds make on average 10-12% a year, if they are lucky. You need luck or a serious trading plan, hence why a proprietary trading firm is so lucrative since more than the majority who sign up fail and those who win are usually already profitable but looking for a way to fast track their growth.

Speaking of fast-tracking your growth, I have myself just signed up to one of those challenges. I am trying my luck at a 25,000$ funded account. I figured, if it cost you 200$ a few times to get 25,000$, I don’t see how it can play against you if you actually know how to trade. Hear me out, 200$ to 25,000$ is 125x, meaning that in order for you to lose money you would need to try and repetitively fail for 125x consecutive times. Sure you only get to risk 4-5% which is about 1000$ and not actually 25,000$ but the goal here is to be able to put in those bigger volume/lots number, unless you can afford to put a 2.00 lot trade on the fly which I think is either 20$/point or 200$/point. In my opinion, if you fail more than 10x in a row, you need to go back to the drawing board for a few months, re-think your strategy, test it, run it and retry the challenge.

Here is my strategy. In order to make these numbers happen, you must understand that these rules were meant to make it very difficult for you to pass. Because of this, people tend to switch their strategy in order to meet the platforms requirement and therefore deviate from the process they know so well and eventually start making mistakes until they break one of the rules and end up disqualified. These challenges are meant for you to overtrade, and as we all know, overtrading will blow your account.

I will show you how to win these challenges in less than 4 trades maybe 5 depending on the maximum lot size allowed with your platform. The idea here is to risk whatever you won+risked on previous trade using a 1:2 reward/risk ratio meaning you risk 5$ to get 10$. The whole standard of saying 2:1 ratio is non-sense since it would be 2:1 risk/reward. I am not risking 10$ to make 5$, it is clearly the opposite way around but people never really pay much attention to it since it is now a faulty standard.

Let’s do an example with a 25,000$ account:

Here on the first trade we risk 125$ in order to make 250$. On the second trade, we will risk 375$ (125$ initial risk+250$ just made) to make 750$. On the 3rd trade, I should be risking 1125$ in order to make 2250$ but as you can see, that would make our total balance to well above the 10% target profit mark, meaning we are risking more than necessary to win this challenge. I have adjusted the risk of my last trade to 875$ risk with 1750$ reward which would bring the total account to 27,750$ just above the 27,500$ required. With this strategy, you can win these challenges in less than 5 trades depending on your risk tolerance level instead of overtrading for months and most likely end up breaching one of the rules and losing the challenge.

Of course, in order to do this you must actually believe that you have a winning system because starting over after moving up levels really suck and can possibly push you to doubt your own trading abilities, hence why you must see it as, I have X many times to try this challenge to make it worth it without changing your trading strategy which has been working well for you.

Another very important aspect to this trading style is to have a lot size calculator. Each forex pairs available have a different pip value. Meaning that you can trade a pair which a pip value is 0.67 and another which is 1.04. What this means is that you must play with your lot size and target profit to determine the right lose size for your trade. A 1.00 lot trade on EURJPY and 1.00 lot trade on GBPUSD will not have the same return over a 60 pip profit run. Therefore you must adjust your size according to the risk/profit for the current pair.


Here is last week’s results:

EURCHF, Sell, Win
GBPCHF, Sell, Win

Trade 1: EURCHF, Sell, Win, +250$
Trade 2: GBPCHF, Sell, Win +750$

As you can see, lot size calculator becomes so important when using this strategy. Here, I made a mistake on EURCHF selling with 0.55 lot trade when instead it should’ve been 1.25 lot trade. Had I not corrected my mistake , while profitable, trade would’ve returned me 117$ instead of 267$, quite the difference.

All I need now is another win and the 25,000$ funded account is mine.

To be continued…

Filed Under: 25K, Forex

Week 15-21 May, 2022

May 22, 2022 by XYZ Leave a Comment

Rainy days for rainy markets… Dow Jones took a massive drop.

Filed Under: Forex

Update 3.1 – Indices Futures, Work In Progress

May 15, 2022 by XYZ Leave a Comment

After a very successful week of automated trading for the first time in a year, I have now started working on adapting the system to trade the major Futures; S&P 200 (Australia), S&P 500 (United-States), CHINA50 (China), DAX30 (Germany) , FTSE100 (United-Kingdom), CAC40 (France), HSI (China), US30 (United-States), NAS100 (United-States).

SP200 (Australia): The S&P/ASX 200 Index is the benchmark institutional investable stock market index in Australia, comprising the 200 largest stocks by float-adjusted market capitalization.

SP500 (United-States): The S&P 500 Index, or Standard & Poor’s 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S.

CHINA50 (China): The Hang Seng China 50 Index (“China 50 Index”) measures the overall performance of the 50 largest China companies (in terms of market capitalisation) listed on Hong Kong and / or mainland China stock exchanges.

DAX30 (Germany): The DAX is a German blue-chip stock market index that tracks the performance of the 40 largest companies trading on the Frankfurt Stock Exchange. The index was historically comprised of 30 companies but was expanded to 40 as of Sept. 3, 2021.

CAC40 (France): The CAC 40 is the French stock market index that tracks the 40 largest French stocks based on the Euronext Paris market capitalization.

HSI (China): The Hang Seng Index or HSI is a free-float market capitalization-weighted index of the sixty largest companies that trade on the Hong Kong Exchange (HKEx). The Hang Seng is the most widely quoted barometer for the Hong Kong economy and is often used as a market benchmark for Hong Kong investors.

US30 (United States): The stock market index was developed as a simple means of tracking U.S. stock market performance in an age when information flow was often limited. The combined stock price of these 30 large, publicly-traded companies determines the Dow Jones Industrial Average (DJIA).

NAS100 (United States): The Nasdaq 100 Index is a basket of the 100 largest, most actively traded U.S companies listed on the Nasdaq stock exchange. The index includes companies from various industries except for the financial industry, like commercial and investment banks. These non-financial sectors include retail, biotechnology, industrial, technology, health care, and others.


With over 8 indices covering all major markets, I decided to go ahead and start with adapting the algorithm to trade the US30, or Dow Jones.

US30 – Starting Capital: 10,000$; Starting Lots: 0.01; Backtesting: 2016-2021

To be continued…

Filed Under: Forex

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