Testing $20 To $52,400 Strategy 1000 TIMES - Fastest Way To Grow Small Trading Account

Summary

In this video, the creator tests a high-risk, high-reward trading strategy known as the '20 to 50 thousand dollar challenge.' Starting with just $20, the goal is to grow the account by 30% per level, reaching over $52,000 by the 30th level. The strategy involves risking 23% per trade for a 30% profit, using a 1.3:1 reward-risk ratio. Through testing 1000 trading bots, the creator reveals that success largely depends on maintaining a good win rate and favorable market conditions. While it works well for beginners with small accounts, experienced traders may find more efficient methods.

Takeaways

• 😀 The 20 to 52 thousand dollar trading strategy involves using a high-risk, high-reward approach with a 23% risk per trade and 30% profit target.
• 😀 The strategy's core concept is to grow the account by 30% per level, progressing through 30 levels to reach over 52 thousand dollars from an initial 20 dollars.
• 😀 The challenge is called the '20 pips a day challenge,' but the creator modified it to allow more flexibility by removing the 1 trade per day rule and 20 pips daily target.
• 😀 A key rule in the challenge is that if an account balance drops below a specific amount (like $1), it is considered a 'blown-up account' and counted as a failure.
• 😀 The win rate of the strategy plays a significant role in its success, with higher win rates (around 60%) leading to a much higher chance of completing the challenge.
• 😀 The testing revealed that, at a 60% win rate, around 99.5% of traders completed the challenge, while a 50% win rate led to many failures and extended trade durations.
• 😀 The strategy is high-risk, with traders risking 23% of their account on each trade, but the larger account size as the strategy progresses lowers the chances of blowing up the account.
• 😀 The strategy works best in trending markets, as market conditions significantly affect the win rate and risk of failure.
• 😀 The original '20 pips a day' rule was removed because capturing exactly 20 pips daily with a 1.3 to 1 reward-risk ratio could be unrealistic.
• 😀 The challenge can be particularly appealing for beginner traders or those starting with small account sizes, as it allows for learning with low initial risk but potential high reward.
• 😀 While the strategy offers a high reward potential, it requires good market conditions and consistency in win rate, making it less suited for those with larger accounts or experienced traders.

Q & A

What is the core idea behind the 20-to-52 Thousand Dollar Trading Challenge?

The challenge involves starting with a $20 investment and using a high-risk, high-reward strategy to grow the account balance by 30% at each level. The goal is to reach $52,000 after 30 levels by following this growth pattern.

How does the level progression work in this strategy?

Each level is calculated by increasing the account balance by 30%. For example, at Level 1, the account starts with $20, and a 30% profit (or $6) is added to it, making the account size $26 at Level 2. This process continues for 30 levels.

What is the risk and reward structure of each trade in the strategy?

Each trade risks 23% of the current account balance and aims for a 30% profit. This creates a reward-risk ratio of approximately 1.3:1, meaning the profit is 1.3 times the risk taken per trade.

Why was the strategy modified before testing with 1,000 bots?

The strategy was modified to remove unrealistic rules, such as the '20 pips a day' and 'one trade a day' conditions. This allowed more flexibility, enabling trades to be taken when good setups appeared, rather than requiring a fixed number of trades or pips each day.

What role does the win rate play in the success of the challenge?

The win rate is crucial for success in the challenge. With a high win rate (around 60%), traders are more likely to succeed. A lower win rate (around 50%) increases the risk of account blowups, especially in a non-trending market.

How did the 1,000 trading bots perform in the tests?

In the first test with a 60% win rate, 99.5% of the trading bots successfully completed the challenge and turned $20 into more than $52,000. However, a few bots blew up their accounts early. In the second test with a 50% win rate, fewer bots succeeded, and some failed after hundreds or even thousands of trades.

Why does a high win rate lead to greater success in this strategy?

A high win rate is essential because the challenge involves large risks (23%) per trade. With a strong win rate, profits accumulate quickly, allowing the account size to grow enough to absorb occasional losses. A lower win rate increases the chances of failure due to the high-risk nature of the strategy.

What is the importance of market conditions for this strategy?

Market conditions significantly impact the strategy's success. The strategy relies on trend-following, so it works best in trending markets. If the market becomes range-bound or slow, the chances of failure increase, even with a good strategy.

What happens if the account balance drops below $1?

If the account balance falls below $1, the trading bot is considered to have blown up its account. This is because many brokers do not allow trades below a certain threshold, often around $1.

Who is this 20-to-52 Thousand Dollar challenge most suitable for?

This challenge is most suited for beginner traders or those with small accounts, as it allows them to trade with a low initial risk ($20). It provides a potential for high rewards but comes with a significant amount of risk, making it less appealing to experienced traders with larger accounts.