5k to a million in just Months on a Live account

[4xinvestor]

@hermanhess,

who traded 500 Dollars to 650k in two and a half months ?

And how ?

 

 

yeah on a demo account...if that was live, he'd be the most famous trader in the galaxy

[hermanhess]

I am not a subscriber.

 

@hermanhess,

who traded 500 Dollars to 650k in two and a half months ?

And how ?

 

Of course I know it is possible, but all traders I know have lost more than won in Forex.

 

dont really know who it is, its a trader form the tsd forums I'm told. Not completely sure of the strategy but its scalping break-outs. I used to share the statement freely but then i got accused of making it up and being an FXCM ib and all kinds of things so i dont share it any more although i have given it to quite a few people on the forum.

 

i also know another trader who did a similar thing and he wasnt even a full tiem trader he would work in the day and trade at nigh. A couple of years ago i hung out at the et@ro forums and there an indian trader took just a 100 pounds and turned it into 500000 dollars in around 8 months, I personally saw this live you can still see someone made a post about it here ------>

hxxp://[email protected]/topic-t678.html

he got so damn successful the broker couldnt shake him off so this broker froze his account and refused to pay him his money on some silly pretext lol ....... and he went into a long ugly battle with the broker (so u gotta beat the market and be careful with the broker too especially these smaller shady brokers)

 

So i guess moral of the story is anything is possible in forex and there are many ways to do it, but i should add such examples are very few

Edited July 9, 2010 by hermanhess

[soundfx]

Hi Herman,

 

I believe that the Indian trader is this guy who is based in the UK:

 

http://forexsantoshtiwari.blogspot.com/

 

He doesn't seem to be trading much at the moment, though it would be interesting to know how his system worked in 2008.

[hermanhess]

Hi Herman,

 

I believe that the Indian trader is this guy who is based in the UK:

 

http://forexs@[email protected]/

 

He doesn't seem to be trading much at the moment, though it would be interesting to know how his system worked in 2008.

 

Hi Mike,

 

yes thats him alright but the link you mentioned is another blog. He has an old blog where he detailed how this thieving broker cheated him

 

http://xxx.@[email protected]/my_blog.html?part_id=10088&post_id=748&action=view_comments

 

last i spoke to him he said he was busy with his day job but planned to return to forex soon. He also intended to go full time in a couple of years. I dont even know why the hell he's bothering with his day job. He doesnt use much TA its mostly fundamentals. At the height of his forex powers he was making 200k a week and all this came from a start of just 100 pounds!!

 

It was a good blog and he mentioned his fundamental strategy to some extent.

 

thx for the link, btw mike as i remrmber you studied the 650k statement in detail please tell us if you think its a demo or if i made the whole thing up.

[soundfx]

Hi Herman,

 

I indeed studied that 650K statement in a lot of detail. The statement was a live account from what I could see - all the transfers in and out of the account looked genuine.

 

The rapid growth in balance was mainly down to a money management technique which increased lots traded with successful trades and reduced them with unsuccessful trades.

 

I looked at various trades in detail and charted them. Whatever system was being used, it had a high win percentage. There was no fixed time when trades were placed, it seemed as though trades were made only when high probability setups occured and from what I could see most of these trades were based on breakouts of earlier price action S/R levels.

 

Cheers

 

Mike

[lerxst]

@soundfx

 

Could you point to where this statement is available? From your comments, his money management technique is quite unique. Thanks.

[soundfx]

Hi lerxst,

 

Hermanhess showed me the statement originally, I think it should be up to him whether or not to post it.

 

Maybe with some more eyes looking at the trades we'll be able to work out better how they were made.

 

Regarding the MM - I managed to get very similar results by doing the following:

 

I used a simple calculation taking the % win/loss as a proportion of the current balance, I then multiply this by the previous lot size to get a proportion to increase/decrease the lot size by and then add to to the previous lot size to give the new lot size.

Edited July 11, 2010 by soundfx

[ftrader]

Maybe it is too simple for us .... therefore we move on to hundreds of other systems,

but I am sure that none of us ever turned 5k to 100k within 5 months and another 500 to 10k within 3 months.

 

With a good EA, it is possible. :)

[patheway]

Hi soundfx,

 

He is probably using some variation of what is called the Kelly formula. If you use this formula straight with no modifications it will give you this kind of return.

 

A bit of a read but this explains it better than I.

 

The Kelly Formula, **

 

F =*(bp -*q)/b

 

Where F is the percentage of the current bankroll to wager, b is the

average winner divided by the average loser, p is the probability of winning,

which is the number of winners divided by the total number of trades, and

q is the probability of losing, which is simply 1 – p.

In plain English, we first take the average size of a winning trade and

divide it by the average size of a losing trade. This is the odds we receive

when we win versus what we give up when we lose, on average. So let’s

say that we make 100 pips on average when we win and lose 50 pips when

we lose. The ratio is 2:1 so we would put in 2 for the b in the formula. P is

the percent of total trades that are winners and q is simply 1 minus p.

 

So the formula is actually very easy to use. But I’ve made it really simple.

Just go to

http://investmentmentoringinstitute.com/kelly.php

and fill in

the blanks. Press “Calculate It!” and the amount of your bankroll that you

should invest is displayed in red. Check it out!

Now, either use the Web calculator or your physical calculator or take

your shoes off so we can do some calculating.

 

In general, the longer-term position techniques like channel breakout

and trend analysis have a winning percentage of about 45 percent but the

average winning trade is about 2.3 times the size of the losing trade. Let’s

plug those numbers into the Kelly Formula.

The Formula comes back and tells us that we should risk 22 percent of

our bankroll on each trade. Let me explore this outcome because it reveals

some very interesting concepts.

Basically, the Kelly Formula is telling us that we should put on a

position large enough that we would lose 22 percent of our portfolio if

there was an average loss. This may seem like an extraordinary amount

of risk. And it is. But Kelly is based on maximizing profit, not finding a

balance between risk and reward or trying to get the most conservative

position.

Note that each trade loss would be 22 percent of the remaining portfolio.

So we are effectively stopped from getting wiped out but we could

suffer greatly. For example, we have our $100,000 account. I used the example

of losing the maximum of 1 percent when using fixed fractional, so a

loss would drop the account down to $99,000. But an average loss on Kelly

would drop the account down to $78,000. Do another losing trade and the

Kelly account would drop to $60,840. And so on.

Notice that I said maximum loss when describing the fixed fractional

but average loss when describing the Kelly. The basic way of using Kelly is

�based on average loss, not maximum loss. This means that you may actually

lose much more if the maximum loss is hit.

The idea of using the average loss works just fine in the context of

gambling because the maximum loss and the average loss are often the

same. You bet $2 on a nag and lose and the average loss and the maximum

loss are the same.

But trading is different. The average loss is usually less than half of the

maximum loss. So we can’t use Kelly as is. We need to modify it to take

into account this significant difference. We might otherwise find ourselves

in deep trouble. I would also suggest that it would be psychologically debilitating

to take such large losses.

 

One of the keys to using Kelly is to realize that it is a way to rationally

determine the relative value of differing trades. Suppose that Kelly

says you should risk 22 percent on this particular pair using this particular

technique and says you should risk 11 percent on a different pair using the

same technique. This clearly means that you should risk twice as much on

the first trade as the second trade.

Perhaps that means that you use Kelly to modify the fixed fractional.

In this case, perhaps you take 2 percent risk on the first trade and 1 percent

on the second.

I suggest that you do not use the pure Kelly but use what is called a

fractional Kelly. The most powerful fractional Kelly is a half-Kelly, which

is when you put on a position half of what is recommended by Kelly. By

doing this, it reduces your risk by 50 percent but only reduces your reward

by a few percent. Your risk-adjusted return actually goes up. Still, this may

mean that you are risking over 10 percent on a given trade.

Another way to modify Kelly is to use maximum loss in the calculation

instead of the average loss. In other words, take the Kelly percent but

divide into the largest loss, not the average loss, and you will be much more

conservative.

 

How to use the Kelly formula

First, I keep very good records of all my trades. That way I can see

what the performance is of every technique and currency pair. That record

keeping is invaluable for me to continue to grow as a trader.

I don’t make any decisions on risk management until I have at least

30 trades. In addition, I really would prefer that I have 30 trades in different

types of markets. How well does this technique/pair work in trending

markets or sideways markets? With 30 trades, I can start to make some

rational decisions.

Second, I use the Kelly weightings to change my fixed fractional trade

sizes. My basic size is to risk 0.5 percent on each technique/pair. But I then

adjust that by how big a proportion of my portfolio that Kelly says I should

use. I look at this from a relative point of view. So, if I am using three

�different techniques for a given pair and the Kelly rankings are 5 percent,

10 percent, and 20 percent, then I will risk 0.5 percent for the middle technique/

pair, half that for the first one, and double that for the last one.

 

The final way that I use Kelly is to take a small percentage of my portfolio,

say 10 percent, and use the half-Kelly or the Kelly using the maximum

loss on just that portion of the portfolio. I find that I can easily double my

money on that portion and don’t have any psychological issues with the

potential losses.

Kelly is truly turbo-charging your returns. Using Kelly is the best way

to create the most amount of money in the shortest time. However, it is

also the scariest. I had a client who lost 97 percent of his portfolio in just

six weeks using Kelly. But he ended up doubling his money in just another

eight weeks. That shows the incredible power of Kelly, both good and bad.

 

 

**How to make a living trading foreign exchange : a guaranteed income for life /

Courtney D. Smith.

 

 

Patheway

 

 

 

 

 

 

Hi lerxst,

 

Hermanhess showed me the statement originally, I think it should be up to him whether or not to post it.

 

Maybe with some more eyes looking at the trades we'll be able to work out better how they were made.

 

Regarding the MM - I managed to get very similar results by doing the following:

 

I used a simple calculation taking the % win/loss as a proportion of the current balance, I then multiply this by the previous lot size to get a proportion to increase/decrease the lot size by and then add to to the previous lot size to give the new lot size.

Edited July 12, 2010 by patheway

[soundfx]

Hi Patheway,

 

Thanks for the details on the Kelly formula which isn't something I was familiar with.

 

Please can you edit your post a bit because the cut-'n'-pasting has left loads of gaps making it hard to read ;)

[hermanhess]

according to Larry Williams in his book "long term secrets" he says the kelly formula can not be applied to the markets, he says if you apply it you will havw wild equity swings. The formula was originally developed in the 1950's to tackle a problem of interference in phone lines. Edward Thorpe wrote about its possible application to gambling, it was later adopted very successfully by gamblers particularly black jack players as a position sizing algorithm after Thorpe introduced the idea

 

Larry William's being the pioneer that he is was the first to pick up the idea and apply it to the markets. He was able to turn 10k to 1.1 million by year end using the formula and win the robbins world trading championship by a thumping margin. However it was just a streak of good luck which he didn't know at the time. After the competition he was flooded with offers to manage money which he did, applying the same kelly formula, however this time he lost most of his money under management. The problem is the kelly criterion works well in gambling because the win on a bet is defined which simply means after you roll the dice or spin the wheel you now exactly how much you will win if you win, but in trading there is no way to know how much you will win as you can not know how far the market will go in your direction. This is the fatal flaw because of which the kelly formula will lose money in the long run, i mean you might be lucky initially but sooner or later your luck will run out. During the competition William's had hired Ralf Vince as his programmer and research assistant, Vince is considered somewhat of a mathematical genius was able to see forsee this flaw and warned Williams about it but Larry ignored Vince and continued to use the Kelly formula. He got lucky and won the competition but some time after that his luck ran out with disastrous consequences.

 

Williams writes in his book ...

 

Ralph noticed the error of Kelly, which is that it was originally formulated to assist in implementing the

flow of electronic bits, then used for blackjack. The rub comes from the simple fact that blackjack is not

commodity or stock trading. In blackjack, your potential loss on each wager is limited to the chips you put

up, whereas your potential gain will always be the same in relationship to the chips bet.

We speculators don't have such an easy life. The size of our wins and losses bounces all over the place.

Sometimes we get big winners, sometimes miniscule ones. Our losses reflect the same pattern: they are

random in size. Figure 13.3 shows a trade-by-trade recap on a system I use so you can see the irregularity of

wins and losses. As soon as Ralph realized this, he could ex

about because we were using the wrong formula!

 

Larry subsequently abandoned kelly and developed his own position sizing formula but even that according to me personally is not the most efficient way to position size simply because you're trading at your largest size when you lose and it takes you a long time to recover from a drawdown, one possible solution would be to ratchet down only after you lose a certain percent of you equity only then ratchet down and maintain that size for all subsequent trades until you lose another chunk of your account, when that happens ratchet down again, this helps you recover from drawdowns faster and you're not necessarily trading at ur max when you lose or ur minimum when u win.

 

This is just a suggestion from me as there really is no perfect solution. However personally to me a very interesting way of position sizing is to use the reverse laboreche sequence to position sizing, I picked this up from a trader called FXIgor and it really is a very appealing method as it helps you recover from dd rather efficintly though once again not the perfect solution as if you have a long streak of losses you will cut your a/c up.

 

There is no one size fits all mm, you need to look up the statistics of your trading system and then try to develop a formula that best fits that those characterisitcs. Using kelly or a percentage of kelly or optimal f, may not be the best way. However personally i am very partial to using the reverse laboreche, there used to be a video about this which was made by fxigor (maybe someone has it) and personally I thought it was a really exceptional out of the box thinking.

 

all this is imho so please anyone please dont misunderstand.

 

PS> i dotn think the trader who made the 650k is using kelly i havent sat down through all 800 trades and calculated it but it doesn't appear to be so he's using his own mm which fits his system and thats a very smart thing to do.

[patheway]

Soundfx thanks ihope it's better now.

 

Hermanhess

Not on a pure kelly formula. Actually the author of this book warns one against such trading but in a very modified form it may work or not.

You may be correct that the trader was not using a Kelly method but his own MM system.

 

Another very common way MM systems can give you large returns is simply some form of a anti-martingale in other words you bet with the edge if you are in a winning trade bet more if you are in a losing trade get out quick.

This is very commonly used when you scale in more trades when you are in a winning trade allowing the trade to fiance your extra trades.

 

However this way seems like he took what he was best at bet accordingly It would be great to know more. To see what his strengths are in trading and how bets.

 

What I cannot understand is why the guy is still working a day job if this is really real? Then again money may not mean to him what it means to someone else.

Not a good day for trading market is very sluggish..

 

 

Happy Pips

Patheway

[4xinvestor]

This is on his blog..

i know there was much discussion that his original system wasn't legit and he changes it and now he's not selling it and whatever...

 

So is this the final-

System offer

For 149, - EUR is to be had my system in completely the package with support.

[fxeasy5]

This is on his blog..

i know there was much discussion that his original system wasn't legit and he changes it and now he's not selling it and whatever...

 

So is this the final-

System offer

For 149, - EUR is to be had my system in completely the package with support.

He announced it again and again:

The system(s) he sold are worth nothing without his personal support because he is trading another system,

not the ones he is selling.

He is bragging about this on his blog.

 

English speaking people are warned: he does not give support because his english is terrible and he does not care

and he does not keep his word.

Go back in the thread and find the testimonies of those who paid and were scammed by him.

[hermanhess]

does anyone know if he is still using long and short orders or if he's only playing one side of the breakout like kokanal described? all said and done $500 to 10k in 2-3 months is astounding performance whatever the drawdown may be, we can't expect to shoot for that kind of return unless we are ready to stomach some serious drawdown but in the end i think its worth it provided you start with a small amount of money.

 

wish he had an english trading room, I'm very curious to know exactly what he does

 

does anyone know if he is updating his english blog anymore because i cant seem to find it.

 

thx

Edited July 13, 2010 by hermanhess

[fxeasy5]

His english blog ( not recommended )

http://www.1millionusd.blogspot.com/

 

His german blog ( well, hmmhh ... )

http://fromdemoto1million.blogspot.com/

 

@kokanal,

where are you ?

I think you are the only one who is in his live-trading-web-room.

[hermanhess]

anyone else in his live trading room?

[Pipmagnet]

Thanks sandman

[hermanhess]

gosh now he's at almost 14k!! Theres no stopping this guy!!

[⭐ apollo12]

This is for metatrader but i use tradestation .eld for tradestation

[Sauber]

his using some kind of indicator.. u pay for a live room of for an system with indicators and stuff?

[mograst]

i dont suggest to pay. My friend purchased the system.. then he never got updates or access for trading room..and never got replays by email or livechat. Use the system you can find in this thread... sorry but i think he isnt seriouse to buyers of his system..

[crushbeat]

I agree with mograts...

[hermanhess]

his performance is phenomenal there's no stopping him, he's now at 16k!!

 

unfortunately one of our members kokanal who very generously shared the strategy in the live trading room has been banned by Sebastian and so no longer has access. I urge all members not to post any direct links to any system they post or discuss, please enclose in code and use "@" in place of letter "a" "0" in place of the letter"o"

 

If you post direct links then its very easy for the creators of the system to find this forum and ban the member who shared it. The consequence is the member who shared is banned or no further support is given to him even though he spent his hard earned money and shared with all of us.

 

thx

[mograst]

what i do not understand is: Does he use the system (those we have here, the second version V2) or another system in his trading room?

thanks