Compounding: Advanced Forex Trading Techniques

everyone’s Josh Martinez marked reasons to empty eyes product experts today we’re going to talk about compounding we talked about your formula of growing your trading account, and then we got a lot of requests from the comments is basically saying hey what about compounding, and compounding is really great when you first start out trading with a small account usually traders who have like a thousand dollars or less love the compound anyone who has $10,000 or more really hates the compound a lot of it has to do with aggressive swings aggressive profits and aggressive drawl downs when you lose a thousand dollars it stinks, but it’s not like losing ten thousand dollars there’s a little more of emotional game, so, let me go ahead and show you what I mean, so remember four key factors when creating your formula risk per trade reward per trade one percent as well as production how many trades per month, so, let’s just put something up here, so we’ll say your risk per trade will be two percent a little aggressive, your reward per trade will be six percent risk one dollar make three dollars is a good solid risk for sword your win percent is going to be sixty percent you’re going to win six out of ten trades every ten trades you place you expect to lose four, and then your production you’re excited you want to get this done, so you’re going to place fifty trades a month this is your formula, if you can do that right that’s a big thing, if you can now, let’s just say you have $1,000 $1,000 starting balance what does this look like well, let’s plug this formula in with just ten trades, so you have ten trades six when six win at 6%, so you have a gross of 36 percent then you have four losses, so four trades you lose at 2% each trade you have a drawdown of 8% net gain is going to be 28% now every 10 trades 10 trades equals a 28% growth that is monstrous growth now you’re saying you’re going to place 10 you’re going to place 50 trades a month, if, I’m not mistaken it’s like 140 percent growth or over 100 percent growth you’re more than doubling your account every month and I don’t want to do math off of over 100 plus a percent growth a month, let’s just say you’re very aggressive you’re very excited and you’re really good and 1 month equals doubling your account, so in 1 month you take $1,000 and now you have $2,000 now your second month you take your $2,000 and now you have $4,000 your third month you have 8,000 your fourth month you have 16,000 and by your fifth month you have 32,000 dollars now has this been done of course thousands of traders do it you go to any trading competition you see great traders doing this all the time it’s how they win those competitions, so great, so they have like you know you ever seen those competitions to where you see, if 500 percent growth within one month a thousand percent growth ousand 500 this is what they’re doing, but very aggressively on a larger scale this is not sustainable, because fast up fast down usually traders who have $1,000 do this, because you know they lose $1,000 is just $1,000, if you have $100,000, if you lose it you lose $100,000 emotionally that’s a bigger number, so it’s a little harder to trade that way, so what is realistically mean well this is basically I want you to pretend that you have an apple tree and your apple tree is producing great apples right it’s just perfect and you have a decision you can eat the apples or you can plant the apples and, if you plant the apples your apples will grow into more trees and your trees will produce even more apples and all this is is making your money make money and making that money make even more money, so all this money you’re making is making even more money that’s compounding in a nutshell the question is when do you want to eat your apples right when do you want to spend your money and how many trees do you want until sustainable because, if you have a large account and you’re now a wealthy trader you want to maintain that wealth and you’re going to back off your risk you’re going to back off your trading, because trading becomes different, so hopefully that you learned a whole lot you can always follow me on Facebook or Twitter or come join us one of our blab videos and leave a comment, let me know what you think this Joshua Martinez marketers Institute

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