Testing $20 To $52,400 Strategy 1000 TIMES – Fastest Way To Grow Small Trading Account
Excel Sheet mentioned in the video: Download (Open in Google Sheets or Microsoft Excel)
20 dollars turned into 52 thousand dollars in 30 days or so.
That’s the strategy one of my Patreon supporters sent me a while back.
They wanted me to test it to see if it worked.
Well, that’s exactly what I did in this video by making 1000 trading bots use this strategy at the same time.
(show_more)
I will be honest, in my around 8 years of trading journey, there are mainly 2 strategies or concepts that have surprised me.
One was the Donchian channel strategy, which got a way higher win rate than my expectations.
And the second one is this 20 to 50 thousand dollar trading strategy.
You will see why I found it good when I show you the testing results.
But what even is this unrealistic-sounding trading strategy?
Well, it’s a fast account growth strategy.
It’s also called the 20 pips a day challenge.
20 pips can sound like a Forex term.
But the strategy works in all kinds of markets, be it stocks, or crypto, it doesn’t matter.
The main idea is this:
There are a total of 30 levels.
Each level has a specific account balance.
Since you start with 20 dollars in this challenge, level 1 account balance is 20.
How are the other levels’ account balances calculated?
Imagine that you make 30% profit on your previous level account size.
That new 30% increased account size is the account size of the next level.
For example, to calculate level 2, we look at the level 1 account size, which is 20 dollars. 30% profit on that 20 dollars is 6 dollars.
Now, the total account is 26 dollars.
That’s the account size of Level 2.
To get the Level 3 account size, we see what a 30% profit on the Level 2 account size would be. 30% profit on 26 dollars is 7.8 dollars.
Add that to 26, and we get the Level 3 account size, which is 33.8.
If we keep doing this math for the next levels, this is what it will look like.
Here’s the thing.
Every level has an account size range.
After starting at Level 1 with 20 dollars, if your account size crosses 26 dollars, you upgrade to Level 2.
If your account crosses 33.8 dollars, you upgrade to level 3.
But if your account size drops below 33.8, you go back to Level 2, assuming you still have 26 dollars or higher.
If you keep following this rule, at the 30th level, your account size will reach more than 40 thousand dollars.
And after completing level 30, or in other words, after making the final 30% profit, your total account size will cross 52 thousand dollars.
Sounds good, right?
But there are more rules that make things interesting.
On each trade, the challenge says to risk 23% of the account and make 30% profit.
This makes the reward-risk ratio around 1.3 to 1.
The profit is 1.3 times the risk amount.
Wait a minute, doesn’t this sound risky?
If you risk 23% on each trade, and have a losing streak, you can lose the entire account quickly, right?
We will see that probability when I make 1000 trading bots take this challenge at the same time in this video.
But I want you to notice something interesting about this challenge first.
A pip in forex trading is a unit of measurement.
It’s typically the smallest price move a currency pair can make.
This challenge is also called the “20 pips a day challenge” because you are supposed to capture 20 pips in a day.
If you do that, after trading for 30 days, you will have your 52 thousand dollars.
But does this mean I have to take 1 trade, that has to win by capturing 20 pips, and then I have to win every single day for 30 days straight to successfully complete this challenge?
Well, that sounds a bit unrealistic, don’t you think?
Who in the world is going to win 30 trades in a row with a 1.3 to 1 reward-risk ratio?
That’s why I modified the strategy.
I removed all the unrealistic rules from it before I ran the 1000 trading bots tests.
I removed the 20 pips a day part.
Now you can use any strategy on any market.
I removed the 1 trade a day rule. Not completely sure if it was there in the first place, but now it’s definitely not there.
Now I can trade when the market actually gives a good entry.
If there are more good setups in a day, I can take more trades.
If there are no good setups in a day, I can skip that day.
Now I don’t even have to win 30 trades or days in a row.
I can lose a few trades and still complete the challenge.
I kept the reward-risk ratio and the risk percentage the same.
In other words, profit per trade is 30% of the account and risk is 23%, which is a 1.3 to 1 reward-risk ratio.
I kept the risk percentage high because the whole point of the challenge is to grow the account faster.
It’s a high-risk, high-reward strategy.
And the other thing I liked is the 1.3 to 1 reward-risk ratio.
You see, we have data that says, in the trending market, MACD or Donchian Channels trading strategy gives around a 60% win rate with a 1.5 to 1 reward-risk ratio.
That ratio is higher than 1.3 to 1 used in this challenge.
That means, if we use MACD or Donchian Channels, we can expect to get around a 60% win rate with a 1.3 to 1 reward-risk ratio.
Now, remember, both MACD and Donchian Channels Strategies I’m talking about mainly worked in the trending markets.
So, they won’t work in range, slow, or any other markets like I shared in their strategy videos.
That’s another reason why removing the everyday trading rule was important.
The market doesn’t trend every single day.
If you want to learn about the MACD or Donchian Channels strategies, check out their detailed videos on the Official Trading Rush website.
I have even ranked other strategies I tested 100 times in the TR Score section.
That’s pretty much for the rules part.
30% profit, 23% risk, 1.3 reward risk ratio with 60% win rate strategy, 20 dollars account size, and 30 levels.
Then, I made 1000 trading bots use these exact rules, and here’s what happened.
What you are looking at is the account balances of different trading bots.
You can also see where different levels are on the right-hand side.
Let’s see how many make more than 52 thousand dollars by crossing level 30.
And how many blow up the account?
You will notice that I have set account sizes below 1 dollar as “blown-up accounts.”
That’s because many brokers won’t let you take trades below a dollar.
Some brokers even have around 1 dollar as the trade charges itself.
Trading below 1 dollar just won’t be possible for many.
So, if any trading bot goes below a dollar, I’m counting them as a failure and will give them the award of shame.
Let’s see how many trades it takes them to win or fail the challenge.
I’m also going to lower the win rate after each test to see what kind of win rate is required to win this challenge.
As you can see, when the strategy win rate was around 60%, many trading bots started to reach level 30 after the 50th trade.
Interestingly, 5 traders blew up the account pretty much quickly.
Now, I was waiting for more traders to lose, but the number surprisingly stayed at 5.
Here’s what’s happening.
If you remember, I made a video once about how always risking “1% of the current account” instead of the “initial account” reduces the chances of blowing up the account significantly.
It takes forever, like more than 1000 trades to blow up the account if your starting account size is ten thousand or higher.
In our testing, these trading bots don’t have 10 thousand dollars.
They have 20 dollars.
If the trader loses trades back to back at the start, there is a higher chance of blowing up the account.
That’s what happened to these 5 traders.
But if more trades are won at the start, which is more likely to happen with a good strategy, the total account size gets big enough that it now takes forever to blow up the account.
Yes, the account can lose big like 90% or more if the trader loses multiple trades in a row.
However, since the win rate is high, there are enough winning trades to keep the profit graph going up.
Basically, as the account size gets higher with a good strategy, the probability of losing the entire account gets really low even though the risk per trade is 23% of the account.
That’s why only 5 traders lost in the first test.
The rest, all 99.5% of traders, completed the challenge and turned 20 dollars into more than 52 thousand dollars.
But wait.
We can only get a 60% win rate in a good trending market.
Unfortunately, the market is not in a good trend most of the time.
This means we can’t get a 60% win rate continuously.
So, in the second test, I set the win rate to 50% with a 1.3 to 1 reward-risk ratio, to see what happens.
This one was quite interesting.
In the previous test, the traders started to win at around the 50th trade point.
But in the second test, more than 100 traders had blown up their accounts at this point.
When the challenge was won for the first time, almost 180 traders had blown up their accounts.
Here’s what I learned.
This 20 dollars to 52 thousand dollars challenge works, but you really need a good win rate.
In test one, most traders started winning after the 50th trade point.
This means you need the market to stay favorable for a long while.
If you use a trend trading strategy, you always need a trending market.
If the market gets slow or bad even for a short while, you will quickly lose most of your account.
One might think that they can just stop trading when the market gets bad.
Well, yes, that generally works.
But we don’t know when the market is going to get bad.
If we are trading in the good trending market now, it can take some time for us to realize that the market has gotten bad. During this time, we can lose a few trades.
Losing a few trades is not a problem when you are risking low, like 1% of the account per trade.
But here, with a high risk like 23%, you can’t afford to lose.
You really need to keep a high win rate if you want to complete the challenge.
With a 60% win rate, around 99.5% of traders won the challenge before the 500 trades mark.
But with a 50% win rate, only around 30% won and some of them were still trading after the 1000th trade point.
This one guy reached profit after the 3000th trade point.
I literally waited 1 hour for him to win or lose.
He was committed till the very end. Didn’t give up!
But giving up or not doesn’t really matter for this challenge that much. What matters the most is whether or not you can maintain a high win rate like around 60% consistently. If you can, you have a good chance of completing the challenge.
But then why did I say I liked this strategy at the beginning?
Remember in the previous video I shared how I started trading with the smallest amount the broker allowed?
Well, many times the account size was 10 dollars.
Since the minimum trade amount was 1 dollar, I was risking 10% of the account per trade.
That’s not much different than this challenge.
I was trading with the minimum amount possible to limit unnecessary risk in the learning stage.
But if I had known about this challenge around 8 years ago, I wouldn’t have minded trying it.
I mean, even though the probability of completing it is lower, especially if the market is not always good and the win rate is not always high, the risk in dollar amount is still lower.
I have seen people start trading with tens of thousands of dollars even though they are learning, and then lose it all. 20 dollars with high-profit potential doesn’t sound that bad in comparison.
This challenge would have not only kept my risk low, like I was already doing in the learning stage, but also increased my potential to make a big profit if I did things right.
But since we need the market to be on our side always, completing the challenge is also dependent on your luck.
This challenge could be fun to try.
But if you already have a bigger account, it’s probably not worth your time.
This challenge can take up to 100 trades to complete. That can take a while, especially when you are only taking the best setups possible.
On the other hand, you can take fewer and safer trades on your bigger account and make the same profit with less time spent.
This challenge can be more attractive for beginner traders, or traders who are starting with smaller account sizes like I did.
Otherwise, normal trading with proper risk management rules is the best as always!
If you want to try the challenge or experiment with it, I have created an Excel sheet that shows the levels and other modified rules used in this video.
I will link it in the description.
That’s all!