Open trading account 
Having taken part in the Great Dukascopy contest for more years than I care to imagine, I can see that much accepted trading wisdom is wrong. As a trader we are taught or we have read books that talk about risk and only risking 1%. Yet today I made a trade that doubled my account something that I never ever did in the trading contest before. If I was wrong I stood to blow the complete account so would you do this trade in real life?
The simple answer is no, because 1 trade will wipe you out completely if you are wrong, but if you are right then you double your account, Hold on though a lot of people talk about having an edge in trading even if it is just a small one, so lets say I have an edge, suppose it is a 60% edge, so I win 60% of the time and lose 40%. Now I know that I won't know if the next trade is a winner or a loser. But lets say I test my system out and I find that I never have have more than 4 losers in a row.
How can I use that to make money?
ok trade test time
1, I risk 10% of my account, it fails, I am down to 90,000
2. I go in again, it fail I am down to 81,000
3. I go in again, it fails I am down to 73,000
4.I go in again, it fails I am down to 66,000
at this point I decide to risk 20% of my account on a single trade, I know because I have back tested my system that it almost never has a losing 5th trade. If my analysis is correct then statistically I am going to have a winning trade because I understand my system. So lets say I get in with a 100 pip stop looking for a 200 pip target, my risk calculation is as follows
12,000 at risk with a 100 pip stop, is 120 per pip move, if I hit my target I make 24,000 dollars and my account goes back to 90,000, I am still down yet I have a system that has an edge. But what happens if I go all in and risk everything on the trade, in effect trading 660 dollars a pip. If I win I make 660 X 200 or 132000, add that to my balance and I am now at 198,000
I can do this trade if I understand my system, however you could also get blown out of the water as the markets can do anything, think of the Swiss currency move.
So it pays to be selective in your trades with so many pairs to trade just look for the best ones, go in like a sniper and wait for the near perfect set up. That is the reason I took the trade and risked my account on it. For me it was the perfect trade and it paid off. I know know that I have to search for one thing and that is not always right, sometimes it can fail. Hence for this contest I only want to look for the best trades according to my rules. If any one is interested in this article click on like and I will let you in on my strategy.
The simple answer is no, because 1 trade will wipe you out completely if you are wrong, but if you are right then you double your account, Hold on though a lot of people talk about having an edge in trading even if it is just a small one, so lets say I have an edge, suppose it is a 60% edge, so I win 60% of the time and lose 40%. Now I know that I won't know if the next trade is a winner or a loser. But lets say I test my system out and I find that I never have have more than 4 losers in a row.
How can I use that to make money?
ok trade test time
1, I risk 10% of my account, it fails, I am down to 90,000
2. I go in again, it fail I am down to 81,000
3. I go in again, it fails I am down to 73,000
4.I go in again, it fails I am down to 66,000
at this point I decide to risk 20% of my account on a single trade, I know because I have back tested my system that it almost never has a losing 5th trade. If my analysis is correct then statistically I am going to have a winning trade because I understand my system. So lets say I get in with a 100 pip stop looking for a 200 pip target, my risk calculation is as follows
12,000 at risk with a 100 pip stop, is 120 per pip move, if I hit my target I make 24,000 dollars and my account goes back to 90,000, I am still down yet I have a system that has an edge. But what happens if I go all in and risk everything on the trade, in effect trading 660 dollars a pip. If I win I make 660 X 200 or 132000, add that to my balance and I am now at 198,000
I can do this trade if I understand my system, however you could also get blown out of the water as the markets can do anything, think of the Swiss currency move.
So it pays to be selective in your trades with so many pairs to trade just look for the best ones, go in like a sniper and wait for the near perfect set up. That is the reason I took the trade and risked my account on it. For me it was the perfect trade and it paid off. I know know that I have to search for one thing and that is not always right, sometimes it can fail. Hence for this contest I only want to look for the best trades according to my rules. If any one is interested in this article click on like and I will let you in on my strategy.
