How long will it take to turn a $5,000 account into $100,000?

[guy2]

Quote from keyser1:

this is true, if your plan is to either make your goal (100k) or go bust (0) and not stop in the middle, you're better off taking a risk that'll pay off the first time (ie a 20-1 payoff/~odds with your entire 5k at risk) instead of either 1. taking smaller risks that have less payoff or (ie your 5k at risk but only a 2-1 payoff/~odds) or 2. not betting your whole bank role each time(ie 20-1 payoff/~odds but only a portion of bankroll at risk); since the more times you play (with the odds against you), the more likely you are to end up at bust (since the house edge will grind you down). And opposite is true if you have the edge (ie you're essentially now the house)...Too lazy to write the probability/expectancy calcs right now...

You've got to be careful not to mix payoff and risk (or probability of payoff) and interchange the two.

For example, if I say to you that I have a strategy that works 10% of the time you might not think that that is a very good strategy. But if I then told you that the amount risked on each trade was 1 point and that when it won, it won 20 points then that changes the picture.

So every tenth trade (on average) makes 20 points and the preceding nine trades lose 9 points so I'm up 11 points for every 10 trades I take.

That's why, when you see these adverts on the net that say 90% win ratio you know that they mean nothing.

A 90% win ratio is a losing strategy if you have to risk 20 points on each trade to make 1 point (for example).

So what I'm rambling on about is that the payoff should be calculated against the probability of that payoff and the amount that is risked to see if we achive that payoff.

 

[guy2]

Quote from jonnyy40:

How long until a truly global economy?(Not to put you on the spot of course)

Well what job cannot be done from almost anywhere now? If physical pressence is required then that can be delegated real time. I've seen an advert recently where a surgeon remotely operated on a patient 2,000 miles away.

 

[nononsense]

How long will it take to turn a $5,000 account into $100,000?
A bit more than a month (if you double your money every week).

 

[keyser1]

Quote from guy2:

You've got to be careful not to mix payoff and risk (or probability of payoff) and interchange the two.

agree with everything u said. sorry it wasn't clear.
what i meant by my lines like --
20-1 payoff/~odds is that
if u risk with 1 dollar, the payoff is 20 dollars, and the odds of hitting that are 1/(20+/- ur edge) = ~5% +/- edge.
the example i used simplified things in assuming theres a general correlation between odds to payoff, and that ur/house edge is fairly constant no matter what the odds (like in the case of american roullette the house edge is always 2/38 ).

 

[guy2]

Quote from nononsense:

How long will it take to turn a $5,000 account into $100,000?
A bit more than a month (if you double your money every week).

I know that you're joking nononsense but you got me thinking extreme stuff:

Some brokers allow you to day trade a margin of $500 per contract so that means you could trade 10 ER2 contracts with $5,000 start capital. Now if you take a look at the Daily Notes page you will see that the 10, 20 and 40 day average ranges for the ER2 are 10.36, 10.51, and 9.15 respectively. Let's call that 10 points for the sake of convenience.

Now I've heard about this genius trader called kingfish who can take 10 points out of days with 5 point ranges. Because I'm not that clever or talented a trader my goal is a more modest 5 points out of a 10 point range. 5 ER2 points on 10 contracts is $5,000 on the first day.

2nd day I have $10,000 margin so 20 contracts...

Why limit ourselves to doubling our capital every week when we can do it every day?

 

[nononsense]

Quote from guy2:

I know that you're joking nononsense but you got me thinking extreme stuff:
[...]
Why limit ourselves to doubling our capital every week when we can do it every day?

Hi guy2,

That I was not joking must have been obvious from my adding:

Of course, you can't do this without thinking. I'm glad I got you thinking extreme stuff.

As to your doubling every day, methink that's truly extreme stuff. Myself, I couldn't imagine ever getting there.

Be good,
nononsense

 

[PitchBlack]

Quote from guy2:

I know that you're joking nononsense but you got me thinking extreme stuff:

Some brokers allow you to day trade a margin of $500 per contract so that means you could trade 10 ER2 contracts with $5,000 start capital. Now if you take a look at the Daily Notes page you will see that the 10, 20 and 40 day average ranges for the ER2 are 10.36, 10.51, and 9.15 respectively. Let's call that 10 points for the sake of convenience.

Now I've heard about this genius trader called kingfish who can take 10 points out of days with 5 point ranges. Because I'm not that clever or talented a trader my goal is a more modest 5 points out of a 10 point range. 5 ER2 points on 10 contracts is $5,000 on the first day.

2nd day I have $10,000 margin so 20 contracts...

Why limit ourselves to doubling our capital every week when we can do it every day?

500$ margin is only possible for small size trading, your margin will fast double or more when your size increases. ( margin will be maybe 1000$ when over 100 contracts and increase exponentially).


doubling up your size that fast will bring you to the next problem: volume. At the rate you double you will have in no time a size that is bigger than the daily volume of the market. In 21 trading days your size will be over 500 000 contracts.

But 1 thing reassures me: you will never be able to double on a daily base.

 

[Learner]

Buy a gun ($100?), go to a bank and make lots lots of the money! $100:eek: :eek: :eek: 000

Just a j ke

 

[guy2]

Quote from spike500:

500$ margin is only possible for small size trading, your margin will fast double or more when your size increases. ( margin will be maybe 1000$ when over 100 contracts and increase exponentially).

Very true spike - you'd have to split it across a few accounts.

doubling up your size that fast will bring you to the next problem: volume. At the rate you double you will have in no time a size that is bigger than the daily volume of the market. In 21 trading days your size will be over 500 000 contracts.

But 1 thing reassures me: you will never be able to double on a daily base.

true again - however I like the idea that 5 back to back 5 point days (i.e. half the daily range) - would take an account from $5k to...

End
of
Day
1 -> 10
2 -> 20
3 -> 40
4 -> 80
5 -> 160

Anybody ever have 5 back to back 5 point or better days?

 

[lurefo]

Quote from guy2:

...
true again - however I like the idea that 5 back to back 5 point days (i.e. half the daily range) - would take an account from $5k to...

End
of
Day
1 -> 10
2 -> 20
3 -> 40
4 -> 80
5 -> 160
...

Hi Guy2, nice maths... but if you don't fully automate the strategy, you have to factor in the mind adaptation time to the increasing size.

See, lets say you got really, really lucky and passed through the 4 days as your plan suggests...

Picture this : Friday morning, ER2 opens, you send your 100 contracts long order to the market. Oops you just ate 3 levels of market depth. You're not used to that.
The markets gets a bit wild and moves against you. You start sweating. Each tick is $1,000 worth.
You don't know why, but you have just canceled your stop loss order. Market drops 2 points.
At this point you feel totally paralyzed. While the market is falling, you realise you got caught in a trend day of ER2. :eek:

Just a thought...