Challenge Stage 1; £100 to £1000 using simple method

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Old Apr 7, 2009, 10:24am   #1
Joined Nov 2008
Challenge Stage 1; £100 to £1000 using simple method

Hello
I'm going to prove that trading strategies don't have to complicated, proffesional, difficult. To make money you don't have to be, extremely clever, qualified, or have capital.
My little brother is 8 years old, during this challenge; everytime i see a setup i'm going to ask my brother (who i have explained simply the method to) if we have a setup. If he says yes, i take it, if not i don't.
I'm 18, have no a-levels (yet!), no degree, average GCSE's, i started with little capital, i currently use a broken laptop (monitors bust) attached to a 32-inch samsung tv, no business experience, my work experience only comes in the form of a paper round/somerfield/pharmacy work, i've got brown hair,I failed trying to learn guitar and piano, i do media studies a-level.

What do i have then!?!
- Passion for trading
- An xbox 360 (i pwn at halo)
- Determination
- I have persisted with trading
- Huge ambition and dreams (of moneyyzzzz)
- Big muscles .... *lies*

So as you can see i'm nothing special and very unqualified to do anything. But i can trade succesfully! And so can you!

The ingrediants;
-Time
-£100
- Dedication
- Pesistance
- Determination
- Food
- Simple trading word document
- Igindex account
- The internet
- A computer

Stage 1;
We're going to turn £100 into £1000!
Why? Because its fun and to make a bit of spare cash to spend on treats
What you buyin boy' ?!?
I'm glad you asked,
1. My little brother wants his own PS3 and since hes making the final trading decision, he will recieve one for his work (like a salary)
2. I'm going to buy myself a Hugo Boss suit - It just seems appropriate and proffesional.
3. Any money left over will go into Stage 2 of the challenge, which will be amazing.

Whats the strategy then?
Well i can't tell you that, top-secret information i'm going to sell for $$$ when i'm older.
That was a joke. (HAhahahahah Lol ROFL LMAO)

You're education:
1. Money management
2. The PHENOMENAL, SUPER, AMAZING strategy (lol) You ever seen adverts like that?
3. Live trade examples with graph images

The challenge won't start until i have fully explained everything and all understand whats going down. I want to make this easy for beginners and laughable for experts.

One thing i have always empathised in the way i've taught myself trading is this;
'Only learn whats potentially profitable' In otherwords, i only know how to make money, i don't give a **** what a 'company' is doing or discussing the FTSE100 behaviour, i don't know the basis behind Fibonacci, i don't know how the MA's are calculated exponentially.

It doesn't matter! What matters is the simple basic principal behind the way in which you'll make money.

Famous quote; ' I don't know any ' Now lets see who gives a ****.

Homework; Watch Harry Potter in Pakistan, its hilarious, Ron Weasley (in the episodes his voice is breaking and Really low) is voiced-over by a little girl.
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Old Apr 7, 2009, 10:43am   #2
Joined Nov 2008
Taylored001 started this thread I hope during the few minutes there you had time to enjoy Harry potter;
Lesson 1;

Money Management. (Notice the alliteration) B in GCSE English shining through.

1. On accounts over £1000, risk 2% or less, i only trade 1% on my big capital account.
2. Since we are starting with £100, i'm going to cheat and trade £5 per trade, mostly because this is sort of the minimum IGindex will let me do. When i get to £500, it will be 1% per trade from then on.
3. 'Don't risk money you can't afford to lose' - I feel this isn't certainly true, ultimately when you risk money you should have added the odds up and seen the likeliness of success and the impossibility of defeat, however always know the plan if you lose all the capital. If its depression and homelessness, then trade less of your total capital or make money using a paper round first.
4. Demo until confidence and consistancy.

5. Trading is your own responsiblity, all actions are yours, the consequences only affecting you.

6. If you come to me and say 'Using your strategy i lost all my capital following your rules' then i will rofl and call you a noob. Because its impossible...

Why you ask?
7. On a drawdown of 30%, the challenge will be over and i will have failed. Do not trade anymore until further demo-ing, then refill your capital and start again.
8.Don't lie to yourself about your success, the evidence is the statement. A common mistake i always make is saying 'Ah i made a mistake, but if i hadn't i would have made 4% so the strategy is still very good'. The result is the determant of success. You can't buy a hugo boss suit because you tried hard.


Prepare for Lesson 2;
Beginners, read all the schooling at Forex Trading: Online Currency Trading in the Foreign Exchange Market, everyone should, its not relevant to my strategy but it will make you know how to manage exits more effectively through understanding different graph behaviours.

Experts - Check the FTSE100 right now on a 5-minute chart, notice the 80-point fall today, i was in that using the strategy on the demo account.
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Old Apr 7, 2009, 11:13am   #3
Joined Nov 2008
Taylored001 started this thread Intermission; A few words from Tradings NUMBER 1 NOOB

Life not giving you what you want?
Wish you could afford that new car?
Take the family to Barbados?
Buy that holiday home in Spain?
Afford that heart transplant (if you live in US)?
Buy a new home?
Afford a new Tv?
Have financial freedom?
Quit your job, work for yourself?
Treat your wife?
Treat your children?
Buy a rolex?
Own your own business?
Own a speedboat in Italy?
Scubadive in America?
Take the kids to Florida?
Say '**** off' to the London underground?

Win the London marathon?
Win the olympics?
Qualify for the Champions League on your own?
Have the Barbie doll collection?
Kill people and get away with it due to your 'Licence to kill'?
Play pokemon in your boxers?

DO IT THEN.

Here's a quick task;
Write down, in order a list of things you want, start with the smallest to the biggest. Through trading each milestone you hit, tick it and see how long it takes to get to the top!

Thats what i'm doing! TO give you an idea to start with, first thing on my list was a new xbox 360 game (£30) and it went up from there. I'm currently @ number 26 lol i have a massive list!

How you going to achieve your goals? I can tell you EFFORT and PESISTANCE and RESEARCH and DETERMINATION.


Each target i plan to take up 1-10% of my total capital. For example, i decided when i got to £10,000 i would buy a blu-ray player which cost £250. So that targets never influence your earnings too much.


Okay enough already?
Strategy time.
I can't promise your dreams can come true using my strategy, but i know that through trading your dreams are possible. This strategy is REALLY SIMPLE, its not complicated and not particularily profitable but it has its merits. When i'm trading my big capital - i use other techniques for lots of different reasons, mostly because i'm in a rush to get to a million!

This is just a fun way of showing people its not too difficult to earn.

I don't want people saying 'Ah thats ****' because i don't want beginners to be put off, i'm afraid you've just got to trust me. Experts, watch the journal and i can prove you wrong but until i fail, don't flame me ^_^

First a few interesting facts;
Starting with £100.
Making 16% for 3 years.
You will make £20,916.

Just think about that, its power.

Starting with £5,000
Making 16% for 3 years
You will make more than a million.

My estimate for this strategy and this journal is that i make 10-20% per month. And a yearly average of 16%.
Sounds good yes?

Now remember; We are starting with £100 and therefore £5 per point (5%) So i predict a return of 75% on the first month or two.
Then when we hit £500, it will be 1% per point from then on.

Overall £100-£1000 i predict will take 6 months using this SIMPLE STRATEGY.

Then we can move onto stage 2; £1,000 per day earnings

Excited! I am Cause using these challenges, every penny is going to go to goodies for me (On stage 2; Mondays earnings will go to charity so that Jebus is on my side)
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Old Apr 7, 2009, 11:25am   #4
Joined Jul 2008
We are all ears and eyes... Chris
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Old Apr 7, 2009, 11:34am   #5
Joined Feb 2008
Well - this should be fun.

Good luck to both you & your little Bro !
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Old Apr 7, 2009, 11:40am   #6
Joined Nov 2008
Taylored001 started this thread Finally; Before lesson 2. I have one more thing to add;

I don't want to hear your 'ideas' and 'improvements', unless you demo them for a month and live trade them for a month successfully monitoring the 'normal variation' and whereby the improvement in profit wasn't by luck on a random good day and rather on a every day improvement basis without touching my money management rules.
If you're not sure you're improvement will make the strategy better and therefore want to discuss it on the forums first, then you don't know what your talking about and i recommend you follow what i say.

Conclusion; Any ideas demo them and live test them before posting.

When the journal starts i am going to post EVERY trade i do LIVE. So that there is no bullsh*t, oh look what we could of got.
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Old Apr 7, 2009, 11:45am   #7
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Taylored001 started this thread Quick quote from my little brother;
'Since i'm making the money, i think i should get to spend all of it'

Cheeky bugger.
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Old Apr 7, 2009, 5:25pm   #8
 
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Good luck with this!!
Rob
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Old Apr 7, 2009, 5:31pm   #9
 
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Good stuff. Looking forward to seeing your stuff.
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Old Apr 7, 2009, 6:58pm   #10
 
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yep im in just in case
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If you are serious about trading then you need to look at this link

http://www.youtube.com/watch?v=6CnAsdQiGzs
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Old Apr 7, 2009, 8:53pm   #11
Joined Nov 2008
Taylored001 started this thread Final comment;
This isn't an impressive strategy, most of you will have seen it, maybe even tried it.
It isn't anything special, i could improve it but it will make the trading less easy and i cba.
Don't be expecting anything special; but understand that i THINK that using this for 3 years
starting with a capital of £5,000 that you will be a millionaire if you follow it closely and apply discipline and money management. And i don't want any complaints until i am proven wrong.

Okay here goes.
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Old Apr 7, 2009, 9:46pm   #12
Joined Nov 2008
Taylored001 started this thread Lesson 2; The phenomenal ultimate kained machine money power lifting champion strategy.

I'm going to try to keep this extremely simple;

This is the DAY PLAN. Not just the strategy, the actual practicality of its application too.

1
Wake @ 7.30, start computer and load charting software ( I use Esignal) but IGINDEX charts are fine.
Eat breakfast, the substance will be determined by my preferance.

2. Wow, we've made it to step 2 and we're still alive. Check the FTSE100 daily chart, just to get an idea of the general market - its not neccesary, but for some reason i just like to stay in touch with it incase i talk to someone about the markets and can say 'Oh yes, the 5% drop on Monday i'm sure surprised most i suspect it was due to the GDP being lower than expected'

3. Check upcoming news that day. I look around the internet for this, i'm sure someone could recommend me a site??? This again isn't too important, i just like to know and i write down certain events which may affect my trades including what time they'll occur. MAJOR events i just don't trade that day.

Its 7.50 and we are raring to go, my computer is being annoying and slow as usual and i've managed to switch on my TV to watch bloomsberg (No, i actually just watch South park or something i've recorded like Heroes) cause i don't give a **** what them presenters are saying.

3. 8.00, the markets open. London is going freakin' mental with population density. What am i doing? Rushing in as i see the green bars forming! Only to find its going back down, ofcourse not.
I'm monitoring the FTSE100 4-hour chart.
What are my settings?
- 5EMA
- 10 EMA
- Stochastics (Normal settings :S )
I ask myself two questions...
1. According to the EMA's is the trend up or down (defined by the crossover, aka, if 5EMA is above 10EMA it is an uptrend, if 10EMA is above 5EMA it is a down day.
2. Is the stochastics heading in the direction of the trend the EMA's defined ?

Condition A: EMA's trending up, stochastics either heading up or overbought? OKAY LONG TRADES ONLY!

Condition B: EMA's are trending down, stochastics either heading down or oversold? OKAY SHORT TRADES ONLY!

Condition C: EMA's are trending up, stochastics is heading down, having been overbought. NO TRADE!

Condition D: EMA's are trending down, stochastics is heading up, having been oversold. NO TRADE!

Condition E: The current bar the MA's are crossing-over! Wait for the close of this bar. (NO TRADE)

Okay so we are going to trade with conditions 1 and 2.

Every hour, i check the 4-hour chart, to make sure the current 'condition' hasn't changed.

3. Now, on the FTSE100, i open a 5-minute chart with the following settings
- 9EMA
- 18EMA
- MACD histogram

The 9EMA and 18EMA aren't neccesary but we can use it in a different strategy i will explain (for more experienced people), giving us more trades and more profit.

So, we are in condition 1 and i have a 5-minute chart up showing MACD histogram -

Now what the **** are we doing ya prick?
I'm glad you asked because this is were the money comes in.

4. (Remember we are in condition A; 4-hour chart trending up) On the 5-minute chart we wait for the MACD histogram to turn negative (RED on most charting software) And we don't give a **** if there is a symetrical triangle or a double top. If we get the signal we are entering the trade.

5. What is this magical signal you talk of? Simply, when the now NEGATIVE/RED MACD, increases in value for 4 5-minute bars on the MACD histogram, we buy on the close.
So when it goes, Red, smaller red, smaller red, smaller red MACD histogram bar closes. We BUY!

Yeah you're right, its pretty ****. But do everything i've said and it will make you money Its not the holy grail whatever the **** that is ?!?!?! And it doesn't look very appealing, but i'm pretty sure it works and i'm going to prove it in the journal.

Okay, we're not done yet are we? Its still like 8.05 remember.

6. Where do we put our stop loss?
Stop loss? Thats for losers, this will have a 100% win so i don't give a ****. *LIES*
Every trading system has loses, and this may have 4 losing days in a row for all i care, my money management is in place and my maximum drawdown is 30%. Overall i am confident that at the end of each month a healthy profit will have been made.
So each trade (on the FTSE100 only remember) will have a stoploss of 15 (including spread) from entry.

7. Target; A mere 12 pips. No more, no less. We DO NOT close the trade until either the stop loss or target of 12 has been hit.
In all truth the target could be alot more ambitious for example 20 or 30 and most of the time it would probably work.
But thats something i'm going to work on. For now (and the whole of the first month) targets will always be 12 and i will update to any changes i make.

What if its condition B ?

Do the opposite.
If the MACD is positive, then negative in value for 3 bars, enter. etc etc


If condition A is present; and the MACD is red, an entry signal comes, then another entry presents itself, we don't take it until a close of a green histogram bar has occured after the first entry.

In other words, for every 'red' cycle (negative histogram) we only ever take one trade, until another entry occurs after the histogram has been in green (positive).

I'm not sure i explained that last bit too well. I will try improve that.

Now its 8.05 and we have our complete plan, our charts open and some food in our stomachs. Now whats the actual plan?

1. We are going to take every entry signal we see, regardless of chart analysis.

We will trade until 4.30 (UK TIME) at which stage, regardless of current standings, all positions will be closed at 4.25

I've complicated it only through telling you the actual application. Any strategy is difficult when you consider when to trade it, when the signals will occur, what signals will i take?

So it is a VERY SIMPLE METHOD placed into a real trading regime.

Weaknesses of the strategy;
- Watching computer from 8-4.30, Its a proper shift. But your working for yourself and it CAN make alot of money, read everything i've wrote and have a good think about it.
- Losing trades are frequent
- Risk/reward ration is pretty crap

The Challenge therefore is this;

Using the EXACT above plan, i'm going to take £100 and turn it into £1000, there is no time limit.
Mission: To prove that a simple strategy can work when you persist with it.

I look forward to starting the LIVE TRADING on Monday the 13th. Where i will post every trade just after i've entered.

Think what you want; Enjoy the journal; See if you can learn from it; Beginners, after i have achieved the challenge you are free to try it yourself but i would recommend seeing me do it for abit, giving live examples with graph images before diving in. Just incase your not sure of what i said.

This strategy in my eyes is the biggest 'shortcut' in trading that exists. It avoids real work, real hard technical analysis, decisions of whether to take the trade, regret, fear. It just requires TIME and that makes it very difficult.

Remember; For the first week (while he isn't at school) every trade i take will be assessed by my 8-year old brother to determine whether it is taken. This is to prove that anyone can do this. Preferably i'd like to take every single signal i see that goes in conjuction with my trading plan so i just hope he does see them consistantly

Disappointed? lol Just wait a see the results and look forward to stage 2 of the challenge; £1000 total earnings per day. Then stage 3; £5,000 per day.
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Old Apr 8, 2009, 2:20am   #13
 
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Good luck with this. Very simple strat - thought about getting it automated?

Sam.
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Old Apr 8, 2009, 9:08am   #14
 
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Quote:
Originally Posted by Taylored001 View Post
. . .

What do i have then!?!
. . . - Huge ambition and dreams (of moneyyzzzz)
. . .
This is the only thing you've posted that I disagree with. You shouldn't think about the money but rather get off on beating the market iyswim.

Apart from that, good, simple strat + you appear to have absorbed the basics.
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Old Apr 8, 2009, 10:33am   #15
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Taylored001 started this thread
Quote:
Originally Posted by A Dashing Blade View Post
This is the only thing you've posted that I disagree with. You shouldn't think about the money but rather get off on beating the market iyswim.

Apart from that, good, simple strat + you appear to have absorbed the basics.
I agree too much focus on the money can become an obstacle i found when i was starting out!
But ultimately, i don't trade as a hobby, i sit at my computer all day for the money.
If there was no money involved i wouldn't trade

Thanks for your comment
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