Inspired by a thread that I’ve read in a forum, I started a trading challenge:
Starting with an account balance of 100 and trading it all the way up to 100,000!
I know that 100 is by far too less starting capital to trade for a living. But I will try to prove that it’s possible to start with only a small balance and grow it to a size where trading for a living is possible.
To achieve this goal, I will trade more aggressively than I would trade a bigger account. Loosing $100 is not a big deal and I could start again just the next week. But loosing 10.000 is something different and I wouldn’t trade such an account with equally high risk.
Under normal conditions I would open a position with a risk of 1%. For this trading challenge, I will put a risk of 2% – 7% per position with an average of 5%, depending on my gains. After some consecutive losses, I will lower my risk down to 2% and only increment the risk after some profitable trades.
How long will it take to make 100,000 out of 100? I don’t know.
Here are some weekly, monthly and returns per year that are needed to achieve this goal in a given time:
| Weekly | Monthly | Year | |
|---|---|---|---|
| 1 Year | 14.21% | 77.83% | 99,990% |
| 2 Years | 6,87% | 33.35% | 3,062% |
| 3 Years | 4.53% | 21.15% | 900% |
| 4 Years | 3.38% | 15.48% | 462% |
| 5 Years | 2.69% | 12.20% | 298% |
| 6 Years | 2.24% | 10.07% | 216% |
| 7 Years | 1.92% | 8.57% | 168% |
| 8 Years | 1.67% | 7.46% | 137% |
| 9 Years | 1.49% | 6.61% | 115% |
| 10 Years | 1.34% | 5.93% | 99% |
| 15 Years | 0.89% | 3.91% | 58% |
| 20 Years | 0.67% | 2.92% | 41% |
I think a constant return of more than 100% per year isn’t very realistic, and even 50% – 80% won’t be easy. So the only solution for not having to wait 20 years to achieve my goal is to add up some capital in the beginning very fast and trade with higher risk.
Should I, for example, make it to 5.000 in 2 years, then it would “only” take another 7 years with a yearly return of 53% to get to 100,000. So this will be more of a long term approach and not a “getting-rich-in-1-year” adventure.
I started this challenge on 19th of January 2009. The broker I am using at the moment offers opening accounts in dollar cents and trading mini lots. So a 0.1 lot position means a win or loss of $0.01. Should I reach a decent account balance of $1.000 to $2.000, then I am going to change the account to a standard account with micro lots.
Update, 09/2009:
I have changed some rules of my challenge. The account was switched 1:1 from Dollars to Euro, that means $350 where withdrawn and a deposit of 350€ has been made on my new account. The broker offers mino lot trading, but is in real Euro now and not in cents as before.
Additionally, I will deposit another 50.00 EUR each month from now on – first additional payment will be made on 10/2009 to speed up the whole process a little bit 