Hi Friends, While going through the results of the past few months trading contest, I found some interesting examples of contestants ending the month with more than 1000 plus pip points in the month, but still ending the month with one half or one third of the beginning equity. As we all know, making few hundred pips a month is in itself a big achievement. Still these contestants were not able to capitalize on their fantastic pip gains and ended losing more than half of their starting equity. A deep study of their trades showed an interesting pattern- high leverage and poor money management. Only if they had used little bit less leverage and had strict money management rules, they would have ended the month in the positive. Even though they might not have been in winning position at the end of the month, their ranking would have been significantly higher than what they had achieved. Below are two randomly selected examples of contestants who made around 1000 pip points in the month, but had vastly different equity balances at the end of the month. Example 1- Pip points gained- 1002 Start of the month equity-$100,000 End of the month equity- Around $60,000 Win/Loss ratio- 85% M…
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Randagio avatar
Randagio 14 Mar.

you're right, Sudink: everyone here should be willing to improve his methods and to learn not to loose money. But if the gamblers win so often, in this contest, maybe it's the contest rules that should be changed. Or maybe gambling is, for some reason, a part of the game that Dukas wants to maintain. Excellent analisys, though. :-)

Efegen avatar
Efegen 14 Mar.

Sudink I agree with you. However I am quiet pleased with the rules. I believe Dukascopy points also supports the less riskier contestants. Equity is just one of the pillars.

sudink avatar
sudink 14 Mar.

Thanks Randagio and Efegen for your comments. I think Dukascopy contest is one of the fairest competitions around where the winner is decided not only on end equity(as in other competitions), but also on pip points gained, win/loss ratio, maximum drawdown, etc. As far as gamblers winning the competition is concerned, data shows that gambling mentality will not take those traders far ahead in their real life trading and they would end up in the list of 95% of traders who blow up their accounts. Cheers!

Delossan avatar
Delossan 29 Mar.

Agree on this one..

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I would like to present a trading plan to achieve 1000% growth in equity in 13 months. Requirement- Any day trading strategy which can make only 10 net pips a day(50 net pips a week or 200 net pips a month for swing traders will also do) Leverage - 10 to 1 i.e Trade a standard lot of $100,000 for equity of $10,000. Every month the equity will be increasing by 20% of the previous month (assuming 10 net pips per day for 20 working days). Similarly the trading lot will be increasing by 20% every month. Table showing the details of the equity and trading lot per month is as under- *For calculation purposes, I have taken 1 pip= $10 for a standard lot of $100,000 which is generally true for major currency pairs. Also the trading lots are not exactly 10 times the trading capital of the month. They have been rounded off to the nearest ten thousand.Thus by using the same trading strategy each month and only increasing the trading lot we can achieve a growth of 1000% on our equity over a period of 13 months. This plan makes use of the tremendous power of compounding. Many economists and mathematicians have rightly called compound interest as the one of the greatest mathematical discovery of…
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Efegen avatar
Efegen 7 Mar.

I believe this can be achieved, but is very hard than it sounds. However I am working on it.

Ivolux avatar
Ivolux 7 Mar.

getting 10pips a day is much harder than it sounds :)

highwayman avatar
highwayman 13 Mar.

I Think You Archived Your Purpose - Weather It Is Practical Or Not Is Another Matter :) +1 Good Luck This Month :)

Likerty avatar
Likerty 19 Mar.

Sure, compounding is the only way to prosperity for a retail trader. Just that to target only 10 pips for a day is too litle. One needs to target lets say 20 pips in order to get space for inevitable red days (lets say -20 pips every third day - will end up with 40 pips every three days)

Delossan avatar
Delossan 30 Mar.

The best way to make money is to not loose those you already have made. Useful article thaks.+

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