THE €100K CHALLENGE
Type: Day trading
Time frame: M5, M15, M30, H1
Instruments: EURAUD/CHF/CAD, GBPUSD, USDCHF, USDJPY
Risk/Reward: up to 1:2
Strike rate: 72%
Risk: Max 15% Draw Down (historically)
Average trade length: 14 hours
11 / 01 / 2021
Welcome to the biggest trading challenge of 2021. We have carefully crafted a series of trading systems that are able to generate massive results.
Alongside our robust and low-risk portfolio, we have built a dedicated trading environment specifically designed to grow a small account quickly. This system is high in risk initially, but migrates to more conservative trading strategies as the account grows. Once the account has reached the 1K (1.000 euro) mark, additional lower risk systems are added to the pool to ensure a steady low risk growth along side the more riskier systems. From extensive back and forward testing results, it can take up to 5 tries to grow the account from €100 to €10.000 before it blows up. Once the account reaches 10K, exposure is reduced on the high risk system as well to ensure we can continue to milk as much profits out of the market as possible.
“As the account grows we transition from high risk systems to a lower risk portfolio solution, locking in profits along the way.”
To be able to grow the account this quick, basically doubling the account every 2-4 weeks, we use a combination of pure price action trading algorithms and a soft martingale management system. Initially the risk is high compared to the available margin, but as the systems completes profitable trading cycles and the account grows, the risk is decreased. This is accomplished by decreasing the size of the positions as well as adding low risk systems to the portfolio.
As the system is risky in nature, we want to make sure to withdraw profits as they have been generated.
From extensive testing we have determined that the sweet-spot of withdrawing profits is 25%. What this means can be seen in the table to the left / below.
When the account reaches €200, we withdraw €50.
This means the account balance then drops to €150. As soon as the account reaches €300, we withdraw €75. At this point the rest of the journey is already risk-free as we have withdrawn €125, which is larger than our deposit of €100.
By withdrawing profit at regular intervals, we have withdrawn almost €15.000 by the time the account reaches €10.000. This on average takes about 6 months to accomplish if the account does not blow up before we reach this level.
If it does, no problem we have withdrawn profits along the way. We just wait 1-2 weeks and try again!
WITHDRAW PROFITS AND INVEST
Once the account reaches 10K, a new phase kicks in. At this level the portfolio is able to double the account every 4-5 weeks, reaching 20K quickly. As soon as the account reaches 20K, we withdraw 25% of the account per month, where at least 12,5% is invested into our low risk portfolio. By doing so, our money is no longer at risk and it will start working for us. This way we can enjoy the profits that are realized and simultaniously built wealth savely.
DETAILED STRATEGY ANALYSIS
Our first system scalps the 5 minute chart for high volume break-outs of consolidation and key support and resistance zones. Trades usually last sever seconds to minutes.
The second system trades the 15 minute chart and combines a high strike rate price action strategy, with a martingale management system, which is activated when the trades does not move into the anticipated direction. This martingale system in its 'normal' settings is quite save as it does not double down on rik with every step it takes.
The third trading system uses historical trading data to analyse current price action and uses a sophisticated mapping algorithm to predict future price. This system can open multiple trades in the same direction depending on market volatility. It is pure price action based, no martingale or grid management systems are used.
Due to the high strike rate of all three algorithms, the system is able to grow the account quickly before the martingale system has to be activated to protect the downside. Intensive back and forward testing show that on average, every one in three attempts will grow an account from 100 euro to 10K. It also shows that it can grow an account even (way) larger every now and then. For example, if we would have started this challenge on the 1st of January 2020, our account would have reached over 500K by the end of 2020. However this also means that half of the time the account will blow-up before it reaches maturity. Therefore it is important to lock in profits along the way, basically trading risk free as soon as possible.
We have started the first challenge of the year on January 11th 2021, of which you can track the live performance of the account below (be sure to click "Refresh" on the dashboard below every time you check the status). On this account we will not be subtracting any profits from our account for the purpose of showing how quickly an account can grow. On mobile: use your finger to zoom into and out of the FXBLUE dashboard or click HERE.
** update 1: June 1st 2021: start Challenge**