SCOTT WELSH TRADING BLOG

Can $10,000 Turn Into a Million?

Can $10,000 Turn Into a Million?

Aug. 11, 2021

Can regular people turn small accounts into big ones?

It’s maybe the most important thing we can talk about.

The answer is: Yes, regular people can do incredible things. But only if they see it in their minds first.

What are the chances that you or I will do something that has never been done before? Unfortunately, it’s extremely unlikely.

But if we can see evidence or if someone has done it before, then the only thing holding us back is us.

Let’s take a look.

Keep in mind, the mindset of this journey is the most important element. Our trading account seldom exceeds our own personal development. If our account is a millionaire but we’re not, our account will come back down to our expectations. But we’ll talk more about that another time.

Let’s see if our account can hypothetically become a millionaire first.

If we’re going to do something this extraordinary, we need some powerful principles behind us. These need to be principles that have been true for a long time and that we’ll believe in for a long time. We don’t want something that’s a flash-in-the-pan (NFTs?) or that we’ll bail on as soon as a losing streak hits.

So, we’ll go with trend following because it’s been around the longest. But we’re trying to grow an account, which means we have to be aggressive. How aggressive?

Well, Jesse Livermore has been quoted as saying he’s not willing to risk more than 10% on any given trade. Despite his inner demons, Livermore was an all-time amazing trader, so we’ll go with his number.

Putting those two together, we’ll choose a trend following system and risk 10% per trade. What system?

We’ll use the 1-Hour GBPJPY system that’s given in the Master Trend program. Why that one? Because I’m trading it live and it’s been nicely profitable in backtesting and live trading so far this year.

Here we go. If we start with a hypothetical $10,000 in 2004, could we ever become a hypothetical millionaire?

Yes. See it here also.

Our hypothetical account breaks over $1 million in 2014 and makes over $24 million in profit by 2021.

How did we do it? We used that breakout strategy (using an indicator) and we increased our trade size with every win and lowered our trade size after every loss.

By doing that, eventually the big trends and the winning streaks carried our account up into the stratosphere.

The problem? By doing that, we will have the largest possible trade size on when a losing streak hits. This means we’ll make a boatload of money when things are trending and we’ll have horrendous losses (due to the high trade sizes during losing streaks).

This leads to years with six-figure profits (or more) and also to more losing years than if we leave trade size alone.

Out of curiosity, what if we started this exercise with only $1,000 and did the same thing?

If we did that, by 2021 we’d hypothetically have:

Over 3 million dollars. (Here also.)

So there it is. This is a simple strategy that’s 100% automated that can make wild dreams come true. The hypothetical evidence is available. If our mindset was ready for a million dollars, the system testing was, too.

But are there any other systems out there that could do it? Did I luck out and find the only one?

We’ll take a look at that in the next Newsletter.

 

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.