## It started with a question

In 2007 we wondered how you can use the Forex industry to make some serious money? It initially appears simple, you have all the necessary tools, great brokers online trading, 24-hour markets, volatile trading instruments and leverage. Everybody excepts that it can be done but nobody knew how to do it.

We decided to treat the question as a maths problem, one of our team had been a maths teacher (and serious maths geek) for some time and new all about the methodology behind problem solving so we set off on a journey that has now taken more than 10 years and we are getting very close to the answer, we now know how to do this !

We decided to treat the question as a maths problem, one of our team had been a maths teacher (and serious maths geek) for some time and new all about the methodology behind problem solving so we set off on a journey that has now taken more than 10 years and we are getting very close to the answer, we now know how to do this !

## How to make $100k from Forex

There are probably lots of ways to make $100,000 but not many of them can be done with an initial investment of only $100-$500 whilst working in the evening at home! Our forex trading plan uses the FOREX market and the leverage it offers to trade relatively small investments into large sums of money. We have been active traders for more than 15 years and have slowly developed a plan that has the potential to do just this turn an initial investment of around $500 into $100k. It has taken a lot of research, starting with the available methods and developing a completely new one.
Read more about the background 20 years as a professional mathematician, teaching some of the brightest children in the world preparing them for the various mathematical olympiads around the world whilst researching into probability theory gave us the problem solving skills and analytical mind needed to complete what was a massive research and problem solving task. The FOREX industry provides the necessary tools, volatile assets and leverage, you just have to know what to buy and when to buy it. We have live tested and improved our trading plan 9 times over the last three years, each attempt has taken around six months, 3-4 months of trading and a similar amount of time reviewing analysing and improving the plan. Several of the attempts have been written up for you to have a look at in the archive Project $100k in the traders area. We know have the method, you can read about the trading plan by following the links at the bottom of the page. $100,000 for working a few hours each evening at home its not easy but it can be done you must be careful, patient, disciplined and determined to make it a reality but you can do it. Invest with us and learn from our efforts or invest with us and just watch with interest as we trade a small amount into a substantial sum. If you are not sure what forex is please follow the link for a short introduction. |
## Not a trader?If you don't want to trade or learn how to then you can still invest, indeed if you choose this route you don't have to do any of the evening work, just follow the links and read about what we do and then decide if you would like to invest. Very few alternatives exist to make this kind of return but please read through the information, one of the key reasons we are able to target these big returns is the things we trade and the risks we take. Please make sure you understand everything before you invest your money.
This is an image of Walter Bagehot, he was a 19th century Journalist and Businessman who wrote the definitive book 'Lombard Street' he began the
Money View economic theory that is the basis of our entire system. |

## Trading $100 into $100,000

Let's break the problem down into more manageable chunks and try to see how it can be done, this is how you start to solve all mathematical problems.

To turn $100 into $100,000 equity you must double the equity 10 times, as you can see from the spreadsheet that gives you over $100,000 if you can successfully double ten times in a row then you will have $100,000, of course, the path is much faster if you invest more. (starting with $400 you only need to do it 8 times)

To turn $100 into $100,000 equity you must double the equity 10 times, as you can see from the spreadsheet that gives you over $100,000 if you can successfully double ten times in a row then you will have $100,000, of course, the path is much faster if you invest more. (starting with $400 you only need to do it 8 times)

**So the problem has been reduced to this**

How do you double the equity in a Forex account? If you can do it once you just need to repeat the plan 10 times and you will have $100,000.

Let's break the problem down even further and look at individual trades and trading results, at this point we need to make some assumptions about trading nobody has a magic ball and we cannot see into the future so we need some valid assumptions that we can accept and use as a starting point.

**Assumption 1**

You only win half of the trades you take. This seems a reasonable number, (if you can achieve 50% then you are doing better than most), but in reality it is proved to be a little optimistic, we have been trading for a long time and a 50% hit rate represent a good patch. In our plan we assume a 35% hit rate which is about right for our trading style

Few traders and advisors publish their losing trades but you know yourself if you can get near the 50% and we know we are generally short of it.

**Assumption 2**

You do not want to apply crazy leverage that takes your account to zero with a couple of poor trades. If you are only going to win 50% of trades then you have to be able to absorb losses. On a 50% hit rate, there is a 3% chance of having 5 losses in a row so you have to be able to absorb at least 6 consecutive losses without going bust and still have enough equity to trade with.

**How much risk to take and what risk reward?**

The table shows How many trades it will take to double your equity with different risk reward criteria so if you risk 10% of your equity on every trade with a risk reward ratio of 5:1 it will take you 4 and trades to double your equity (remember we are assuming 50% of trades are a success, we only achieve 35%)

## Conclusion

What seems reasonable?

If you risk 2% of equity on each trade with a risk reward of 2:1 it is going to take 70 trades to double equity, that seems like a lot of trades this might be suitable to some sort of scalping system but it just would not work for us.

If you risk 15% of equity then the risk of ruin is just to great, after just 2 losses you would not have enough equity to take the next trade and the chance of losing 2 in a row is close to 100% (in our experience not mathematically speaking) if you can hit a 50% win rate which we can't. So that is just too risky.

Of course, if you risk 10% with risk reward of 10:1 it only takes 2 trades! Trouble is we hardly ever come across trades that meet the criteria for trading and have a potential risk reward of 10:1, you would probably only get 1 trade a year.

So what is the sweet spot, not to much risk and an achievable risk reward?

RetiredearlyFX believe that risking 5% of the account with every trade and giving ourselves a risk reward of 5:1. This means our wins are five times as big as the losses this is about right for our trading plan, in fact it is very common for the type of trading known as swing trading.

So every winner brings an increase of 25% every loss cost us 5%, with a hit rate of 50% that means our expectation is that we will increase the account by 10% with each trade. (two trades one wins 25% one loses 5% so 2 trades bring in 20% an average of 10% each).

There we have it To turn $100 into $100, 000 you must take 70 trades with a 50% hit rate. You must risk 5% of your equity on every trade at a ratio of 5:1

Sounds easy but its not, having worked out what we need to do we now have to work out how to do it, how do you find these 70 trades?

The previous attempts have all served to improve our strategy, things were added and things taken away. We knew we were on the right track on attempt 6 when we got to $14,000 and have 4 more attempts since then. Only the first 2 attempts actually went to zero, since then we have stopped when an improvement ot the plan became obvious, we banked the profit ironed out the problem and started again.

you can read about some attempts here,

And follow the link to read Part2 the investment strategy, how to find these elusive trades.

If you risk 2% of equity on each trade with a risk reward of 2:1 it is going to take 70 trades to double equity, that seems like a lot of trades this might be suitable to some sort of scalping system but it just would not work for us.

If you risk 15% of equity then the risk of ruin is just to great, after just 2 losses you would not have enough equity to take the next trade and the chance of losing 2 in a row is close to 100% (in our experience not mathematically speaking) if you can hit a 50% win rate which we can't. So that is just too risky.

Of course, if you risk 10% with risk reward of 10:1 it only takes 2 trades! Trouble is we hardly ever come across trades that meet the criteria for trading and have a potential risk reward of 10:1, you would probably only get 1 trade a year.

So what is the sweet spot, not to much risk and an achievable risk reward?

RetiredearlyFX believe that risking 5% of the account with every trade and giving ourselves a risk reward of 5:1. This means our wins are five times as big as the losses this is about right for our trading plan, in fact it is very common for the type of trading known as swing trading.

So every winner brings an increase of 25% every loss cost us 5%, with a hit rate of 50% that means our expectation is that we will increase the account by 10% with each trade. (two trades one wins 25% one loses 5% so 2 trades bring in 20% an average of 10% each).

**That means it will take around 7 trades to double the equity.**(remember compound interest)There we have it To turn $100 into $100, 000 you must take 70 trades with a 50% hit rate. You must risk 5% of your equity on every trade at a ratio of 5:1

Sounds easy but its not, having worked out what we need to do we now have to work out how to do it, how do you find these 70 trades?

The previous attempts have all served to improve our strategy, things were added and things taken away. We knew we were on the right track on attempt 6 when we got to $14,000 and have 4 more attempts since then. Only the first 2 attempts actually went to zero, since then we have stopped when an improvement ot the plan became obvious, we banked the profit ironed out the problem and started again.

you can read about some attempts here,

And follow the link to read Part2 the investment strategy, how to find these elusive trades.