Note: I posted this in the Trading Forum under a thread with a similar name. It has been a lively discussion over there. I think we may get some interesting ideas here as well. FYI before you read on I do believe that someone can do this. It may not be me, but I am having fun trying. Here is the post. Quote: I have a few doubts that someone could trade their way into $100MM in stocks or futures, but the fOREX is a completely different story. In fact, I have worked up a spread sheet where with just a $1000 to start you can have $1 million in less than a year. Your second year will get you the $100 million, actually it may even reach a billion. AND the most incredible thing is that you are doing this with the market's money or rather money you have earned in the market. I personally have spoken to one gentleman who traded a $50K demo account up to $1.1 million in just 3 hours. Later he then traded that $1.1 million up to $2.5 billion. Now demo account trading is different than live trading but the basic principals are the same but without some of the real world gremlins to hold you back. To go from $1.1 million to $2.5 billion is only 30 trades if you do it right! Of course, there are milestones along the way where you will need to change your trading method and brokers, but here is how it can be done. First, have a reliable trading system that can get you a net 100+ pips per week including all drawdowns. I currently have been averaging 200 pips per week and on active days I may see a 500 pip day. I attribute this to the unique trading system I use which is based on price action and not the typical indicators. Second, trade with a broker who offers a mini account to start with 200:1 leverage. Also, this broker's trade station must be able to execute hedge trades. Watch out for this as this is a key point to my strategy. By hedging I don't have any negative trades unless the market moves too far away from a trade where I need to use the margin in a current trade. Then I may close out at a loss for a limited number of pips and only for a small percentage of my account. Otherwise, I work the hedge trades as my account builds. Third, when your mini account gets to the point of needing to be converted to a standard account, don't. Use it as your "cash cow" and open a second standard account. You can easily withdraw $10K+ a week from the mini account and use the rest of the cash earned in the mini to build your standard account, which will be also be building but at the lower 100:1 leverage. Fourth, as your account grows you add lots to successive trades which builds your account exponentially. If you are hedging as well it will go even faster, but you have to be careful of your margin. If you don't you will get margined out and have to start over. I learned this the hard way, and it was worth every penny. Fifth, there will come a time when you will need to find a bank to trade with directly. Most retail brokers are charging 2-4 pips per trade. Once you account is at the $500K mark you will be trading 10 x 100 x 100 = 100,000 per week or 20% of your account. By hedging you will be able to have 20% of your account in the market with very low risk. Now when you are trading 100 lots that is $10 million. The banks active in the Forex will trade with you at wholesale rates when you are making trades of this size. You should not wait until you have the $500K in you account to start making contacts for the wholesale trades. You have several months in advance to figure this out and establish your network to do this. The important thing is to have a plan in place, even though it may not be detailed much more than this post to be your guide to your $100 million. There is nothing quite as powerful as a definite plan that you have set out to accomplish to make it happen. So I close with what I said in the beginning, "Yes it is possible to earn $100 million trading the (Forex) market." In fact, you should be able to do this in less than 24 months of trading. In the Forex you will not see the slippage and liquidity problems you have in stocks or futures when you are looking to move larger contracts. The Forex currently trades about $1.8 trillion per day so they won't miss a $Billion when you get there. Just in case you were wondering a $Billion is 0.001% of a $Trillion and you don't need to take it all out in one day. Be nice and spread it out over a week or so.
Aside from the rest of the crap on the first post . . . I love how they automatically connect "largest market in the world" with no slippage. Please explain what being down 3 pips immediately following every single execution is on a liquid market like eur, if not slippage.
Could you give a blow by blow example of this...? By hedging I don't have any negative trades unless the market moves too far away from a trade where I need to use the margin in a current trade. Then I may close out at a loss for a limited number of pips and only for a small percentage of my account. Otherwise, I work the hedge trades as my account builds.
I only have about 20% of my account in the market at any one time. The trades will be both shorts and longs which I will leave in until they hit the target T/P. Sometimes this means leaving a trade in for days. If I need the margin for another trade I may close it at a small loss. I use a broker that let's me hedge which allows me to effectively double my margin when the account is hedged, but I can only trade in one direction until the older trade has matured. This does leave me vulnerable if the trading range shifts unless the lot size is low in relation to the account. Then I have to scalp a bunch of pips to pay for the drawdown.
So when one side of the Hedge hits the TP do you re-enter that side immediatley? I only have about 20% of my account in the market at any one time. The trades will be both shorts and longs which I will leave in until they hit the target T/P. Sometimes this means leaving a trade in for days. If I need the margin for another trade I may close it at a small loss. I use a broker that let's me hedge which allows me to effectively double my margin when the account is hedged, but I can only trade in one direction until the older trade has matured.
Illiquid aren't you confusing slippage with spread? When the spread is 3 pips per trade that is the cost of this business, the spread. When you enter or exit at one price but your trade station fills it at different price that is not in your favor that is slippage as I understand it.
When a hedged trade hits an old T/P the market is running with that trade so, yes I will add to it with the current params in mind. Sometimes it will be at the top or bottom of the range for that day and then I just get out. So the answer is it just depends.