Get started

Scaling

How I am approching scaling my account to the next level💰 Introduction I have been actively investing for over seven years. When I started in 2017, I had no idea what I was doing. My first trade was a short/mid-term win on an altcoin skyrocketing in a straight line—it felt unbelievable. But the truth was, I was completely clueless. Still, I was hooked. I started reading everything I could and expanded my focus to stocks and Forex. Six months later, I had developed some ideas about Forex, though I was still lost when it came to stocks. I funded a Forex account with €8,000 to test my skills, using a simple 1:1 risk-to-reward 0.5% per trade system. A few months later, I was up about 15% - a solid start. From there, my goal was clear: design a great strategy first, then scale it. But things didn’t go as planned. I suffered a serious injury, which got progressively worse, making it impossible to hold a regular job. I spent everything I had on rent and medical bills. To make matters worse, I stubbornly clung to a terrible strategy for years - even after developing better ones. I ignored huge unrealized gains, constantly chasing the “holy grail” of investing. Ironically, today, I trade every single strategy (or a modified version to add to winners) I’ve ever designed since 2019 - except the one I stubbornly stuck with for years. Through all this, I learned a crucial lesson: 💡 A strategy should work from day one. You backtest it to verify, then refine it, but you don’t trade it live until it’s ready. Now, after years of experience, mistakes, and lessons learned, I have several proven strategies and a fresh perspective. The next step? Scaling up aggressively. Of course, I can’t cover everything in one article, a full book wouldn’t even be enough. Some aspects of growing an account, like tax implications, aren’t discussed here. But my goal is simple: to inspire investors to think creatively about scalability and strategy development. The process of building an investment strategy - including a scaling plan - is all about creativity. 💰 The Challenge of Scaling: Why Gains Lag Behind Losses Your gains will always lag behind your losses - this is a fundamental reality in investing. If you scale too fast, your winners from months ago may not be enough to cover your new losses, even if you're performing well overall. I am not talking about drawdowns, those makes things even worse. I am talking about how looking for asymmetric returns means the time it takes will be asymmetrical too. For mid-term strategies, traders typically risk 1 unit to gain 5, 10, or even 15. However, the time required for returns grows exponentially as reward targets increase. If you're aiming for 10x or more, your losing trades might last only 2–3 days, but your winners could take six months or longer to materialize. I experienced this firsthand in 2024. I started the year strong, accelerating my risk after solid returns from trading the Yen. Then I hit the gas again, but things turned bad - primarily because I was experimenting with a new strategy alongside my proven ones. In November, I realized a 15x profit on gold, which could have significantly changed my situation. However, I had entered the position back in February, before I began scaling, so the gains didn’t have the impact I needed at the time. 💰 Scaling Only Works for the Few Who Are Ready Most traders either stagnate or lose, and even the best often learn the hard way early on. You’ve probably heard the common statistic: only 10% of FX investors win, and only 10% of stock investors beat the market. But even within that elite group, only a third outperform significantly enough to consider trading as a full-time career rather than just a supplement for retirement. From the data I've seen, only about 3% of investors should even consider aggressive scaling. Attempting to scale without a proven track record is a recipe for disaster. Even the most famous market wizards often had to learn the hard way early on. A good analogy is chess - not everyone is a young prodigy, and even for those who are, it often takes 7–8 years to reach master level. The same applies to investing: skill and experience take time to develop, and rushing the process can lead to avoidable mistakes. 💰 No shortcut but there are ways to increase scalability A path one might follow is the investment fund. However these are very restrictive, George Soros once said to make money you had to take risk. No matter how good you are you are still subject to the same laws and I know no one that has 100% win rate. If your max drawdown is 5% how much can you realistically risk per operation? Perhaps 0.25% So your 10X winner will be 2.5%. We know the returns, drawdowns and Sharpe ratios of the biggest (and supposedly best) funds, I never heard of a fund with a tiny max drawdown and huge returns except Medallion fund you got me. The problem I personally have, or shall I say had, is that I can sometimes go 6-12 months without a winner, or with just 1-2. It is spread very non-homogeneously. In the last 3 months I have (finally!) designed a short term strategy that will smooth the curve, I risk 1 to make 5 and have opportunities in all market conditions. I was not even trying to, I just randomly felt creative and went "Eureka". I am currently running my proven strategies on my main accounts, and the new one on a smaller account - of course I keep winning on these small amounts. This short term strategy might not be my best one, although it might be the second best, however it was exactly what I needed to help smooth the drawdowns and more boring market conditions. 💰 Balancing Creativity and Risk in Scaling Strategies I believe designing a successful scaling strategy requires a combination of creativity and pessimism. From my experience, it's essential to explore different ways to scale while always keeping the worst-case scenario in mind. To illustrate this, let’s consider an example - not necessarily the exact approach I will take, but a concept that reflects my thinking. Suppose I allocate €25,000 to a brokerage account and divide it into 25 "tokens" of €1,000 each. Every time the account grows, I would redistribute the balance into 25 equal parts, each representing 4% of the total. This setup ensures that I always have capital available for new opportunities. Even if I lose 10 times in a row and have 5 tokens tied up in winning trades (or disappointing breakevens), I would still have 10 tokens left to reinvest. Based on my calculations, 25 is the minimum number required for this method to work efficiently. That said, 4% risk per trade is significantly higher than what I have ever risked, and I may adjust it downward. 💰 Risk Management and Personal Goals If someone were able to triple a €25,000 account each year, they could theoretically reach €2 million in just four years. However, such exponential growth is rare and unsustainable over the long term. Jesse Livermore achieved extraordinary gains - but ultimately lost everything and took his own life. This is a stark reminder that extreme financial risk can have devastating consequences. I would never attempt this kind of aggressive scaling with essential funds - certainly not with rent money, without a financial cushion, with large amounts, or without a clear Plan B. My personal objectives: If investing my own money: My goal is to build a €2M–€3M account while continuing my regular job - possibly reducing to part-time work. If managing investor funds: I would aim to start with €10M AUM, with at least €500K of my own capital in the fund. My ultimate target is to grow AUM to €100M. 💰 The Crypto Factor : A Different Beast The extreme volatility combined with long term aspect of crypto makes for a very different experience. In the past it has shown incredible returns, I know this first hand my brother started mining Ethereum I think in 2019 when the price was below $150 I guess and then he has been buying cryptos on the way up, in euros I might add, with the crypto/euro charts looking much better than the USD ones. But there is no reason why it cannot all go to zero, or crash 95% and remain here for years. And even if the whole crypto market does not crash, several of them die each year. I am not a perma bear I do not wish my younger brother to lose everything, this is all he has, he got no diploma not interesting career. For crypto to fit in a structured investment strategy I personally would only put small amounts. So it sort of follows the idea of a separate account with huge risk. An amount that one can afford to lose. 💰 Final words I believe I have the experience, the rigor and the strategies to increase my risk and invest more aggressively. In a near future - maybe starting 2026 - I want to really grow my account. My scaling will be gradual, I won't jump from an amount to 3 times that in 3 months, I will manage my risk strategically; And before even starting the battle I will have clearly defined objectives.
Education
by MrRenev
1
COMPOUND INTEREST: The Secret SauceIn this video I cover the topic of "Compound Interest". I go over the WHAT, WHY, WHO and HOW of it. The Importance of Compound Interest in Trading Compound interest is a fundamental concept in the world of finance and trading, offering a powerful mechanism for growing wealth over time. Unlike simple interest, which is calculated only on the principal amount, compound interest is calculated on the principal and also on the accumulated interest of previous periods. This seemingly small difference can significantly impact long-term investment returns. Amplifying Returns In trading, compound interest can exponentially increase the growth of your account. When profits from trading are reinvested, they start to generate additional earnings. For example, if a trader earns a 10% return on a $1,000 investment, they would have $1,100 after the first period. In the next period, the 10% return is calculated on the new total of $1,100, resulting in $1,210, and so on. Over multiple periods, this effect leads to exponential growth, far outstripping the returns from simple interest. Long-Term Benefits The magic of compound interest becomes particularly evident over longer time horizons. The longer an investment is allowed to compound, the greater the potential growth. For traders, this underscores the importance of patience and a long-term perspective. By consistently reinvesting earnings and allowing them to compound, traders can achieve significant wealth accumulation even if individual trade returns are modest. Mitigating Risk Compound interest also highlights the importance of managing risks and minimizing losses. In trading, avoiding substantial losses is crucial because significant drawdowns can severely disrupt the compounding process. A trader who loses a large portion of their capital will need significantly higher returns to recover, which can be challenging. Therefore, prudent risk management and maintaining steady, positive returns are key to leveraging the power of compound interest. Psychology plays a role as well as losing large amounts of your account can negatively affect your decision making. Conclusion Understanding and leveraging compound interest is essential for traders aiming to maximize their long-term returns. By reinvesting profits and allowing them to compound over time, traders can achieve exponential growth in their investments. Coupled with effective risk management, the power of compound interest can transform modest returns into substantial wealth, making it a cornerstone of successful trading strategies.
Education
by Road_2_Funded
1
Automated Trading with Trailing Take Profit and Scaling ExitsAutomated Trading on Tradingview can be challenging. But with some strategies employing smart trading techniques, you can find your way to a reliable setup. There are many aspects of automated trading I've employed and studied. Those are as follows: Trailing Take Profits: Allowing a trade to surpass the original profit target if the price continues in your favor, followed by an offset value. Stop On Close: Waiting for a trade to close a bar below your stop loss before exiting a trade. Scaling Exits: Exiting a partial position at a set limit price between the entry and final take profit target. More info available on the chart.
Education
by PrismBot
2
[Advanced] How to aggressively grow a small (10k) account?Most of the time growing an account is a very slow grind. Make some, lose some, hope to make a little bit more than you lose. For example, with an average risk to reward of 1 to 5, and a win ratio of 21% (not counting once a year outliers), which is pretty good, breakeven being at 16.67%, after 100 trades the result will be - with a risk of 1% (flat) each time: - Profits = 21*5 = 105% - Loses = 78*1 = - 79% Net result = 26% Finding 100 good trades might take more than 1 year. With a theoritical compounding of 1% each trade the max profit would be: - Net = (1.05)^21 * (0.99)^79 = 25.94% Compounding is not always the magic trick. You might be looking at something like 20% a year. But once in a while, often in September-October, and sometimes at specific times such as March-April 2020, we get these monsters that go way further than usual. Often from a boring tight period, an explosion that grows exponentially, this pushes the reward dramatically. So we can end with a few winners at 10, 15R, rather than the usual ~5. So you can "easily" get the regular barely above breakeven 20% (for the example) with on top of that an occasional 10, 20, or even more, percent. On our small accounts these extras feel good, and they give a nice boost, but nothing dramatic. Growing a 10k account into 100k even with 50% a year will take 6 years. With 30% a year that would take 9 years. With 20% a year, 13 years. An experienced but poor investor, that spent years working on entries, exits, and so on, will need do something rather "dramatic" to grow his account. Doesn't have to be a complete gamble. An idea is after one of these "boost" periods, the investor could put all of that profit at risk. Say he made 32%, losing it all would be a major drawdown of 25%, but if the investor sees it as extra it is not the same as a crippling drawdown. Having a great period is nice (within years of moderate consistency), but it is not life changing. It might be a good idea to use that as some sort of springboard (or launchpad): - Losing that profit is a return to last step it is disapointing and the grind continues but even with an extra 30% the grind would still continue it wasn't going to be life changing. Maybe 6 months - 1 year worth of profit lost (but it was "extra" anyway). - Not losing it all (winning or even a period of breakeven) is great because it will allow the account to leap up suddenly, you quickly end up years ahead. So how does this work? Going to use an example. The investor gets 100 trades a year because why not (that's 2 a week or a little over 8 a month), has a reward 5 times the risk and a winrate of 21% (PF = 1.33). Account size = $10,000. Risk per trade = $100. The investor was able to grow 4000 into 10,000 over 4 years "slowly" (not that slow) but surely. The biggest drawdown ever was 20%. The yearly return is 26%. Over September to November he made $4000. He would "normally" make $1000 over 3 active months like this, but as is often the case, that period was violent with fear moves, winners just kept going and our investor that was able to add early ended up with 2 winners at 9+7 R each. So 32R. It can go very fast. 32%, on top of 8% on other grindy trades (over 3 months). Trying to catch whole trends and hold forever in my opinion is not realistic, but adding once or twice to winners is (talking about FX here), and winners (especially in March 2020 or September-October) going vertical does happen. So now how does the 10K investor scale up? Well $100 was 1%. 1% of 14,000 would be $140. but how about he more than doubles the risk?! So investor's profit in Sept-Nov was $4000 ("regular" $800 + "extra" $3200) and he/she decides to put it all at risk. He pushes the risk up to $280 which is now 2% of the new account size. After 12 loss in a row (down 3360) all the "extra" will be gone with only $640 profit left, the risk will then be reduced progressively, first down to 200 and if losses continue, 150 and finally back to 100. To attempt this our investor must have several years of results. From these years, taking out the handful of outliers, we know average RR & WR. The important question is what are the odds of 12 losses in a row? (With 21% WR) ==> First the probability of 12 losses in a row (if it was a random coinflip) are 6%. The odds are rather low. ==> Second the odds of exactly 11 losses out of 12 are 19%. In that case investor lost 1680/3360 -> Half. Still 6 lives left. ==> Once investor has 6 lives left the odds of losing all 6 times are 24%. Risking 280 rather than 140 means in 1 year rather than grow by 3640 (26%) the account will grow by 7280 (52%). Basically fast forward 1 year. In a way this is risking 1 year of profits to make 2. With something like 80% odds of making it. Aiming for much less than 12 lives is really gambling. An investor could also go for 20 or more lives but the higher the number the slower the grind. With 6 lives there is 1 chance in 4 to lose it all. But it would be a $560 risk, a huge increase from $100. Is there really a need to increase size by that much at once? It would not even accelerate growth that much. Our little investor can always make another jump after that first one. Because yes, that snowball can keep getting bigger. It is a terrible idea to keep going double or nothing, eventually it will be nothing, but we could find a compromise between being very careful and careless. We might not accept a 30% drawdown, or losing 3 years of very difficult very slow profit but if we can separate that say slow grindy 15% a year and go "I won't risk this" but the once a year or two monsters that provide 20%-40% at once (arbitrary numbers) we can see it as "extra", we got our account with 10k in in and the 4000 we just made well losing the 4000 technically would be a 30% drawdown on 14k but we can perhaps separate this, it was unexpected, and we put all of this capital at risk, without hurting our "main" capital. Might be a great way to boost growth without risking to blow up or being set back years. And if it works out. As I said the example investor (which is already at least in the top 5% by the way) made 7280 rather than 3640. An extra $3640. Actually since his account was $10,000 and he was supposed to make about 3600 in 1.25 year, but instead made 7280 + 4000 = 11,280, well that's an extra of about $7500. Last time investor risked 3400/4000 in 12 trades (6% odds of losing all 12 and perhaps ~15% odds of losing all that money over a longer time), maybe this time investor wants to risk 6000/7500 in 12 trades ($500 each!). 26R = $13,000. If it works out in 2 years investor's account went from $10,000 to $34,000 rather than $16,000. $24,000 profit rather than $6000 (or $10000 with the big winners). With what? 1 in 4 odds of only making 6000? It is still going to take years anyway, but it is possible to take ponctual big risks to try and jump up a few steps, without playing russian roulette either. Another quick example... I think this example is within the good compromise area. It would be possible to go "I will risk $1200 over the next 3 ($400 each)" but just 3 trades that gets rather random so it becomes gambling. Over several years risking "1200" (12% base account) over the next 3, well the randomness would even out but seems bad, better to have some sort of certainty. 4% and 6% odds to immediately fail means 94/96% odds of success, unless really bad luck that should rarely happen, this should work. Just not with rent money. And even if it fails the "base account" is still here, simply some unexpected profit evaporated. If it fails, can always re-try next time, after another while of grinding, making sure we are still actually profitable and it was just bad luck. On top of this whole concept of putting profit at risk for a boost, there are the very rare "generational" trades (George Soros versus BoE 1992), where risk is known to be limited (so no swiss tsunami), the odds are really high (way more than 21%), and the reward will be even better than 5R. Also more generally when having a great winning period, great conditions, but I would not trust anyone to be objective about that. Our eager investor that made 4000 could out 3000 at risk over 12 trades with $250 each, and leave the remaining 1000 for the "great ones" where maybe $300 can be risked at once (and if it works out a one time 1500-3000 boost), 300 being "only" 2% of 14000 so it's still fine, not completely crazy (we are talking about a serious investor that has been doing well for a few years not a retail day trader with a gambling addiction). Just like with trade selection strategies, there is no secret magic trick. This scaling strategy is honestly the best I can do. Maybe 1 last example... And finally, this can be tweaked. Rather than rambo the risk from $100 to $280 in the example I choose, still putting all or most of the 4000 at risk, an investor could first increase the risk to $190 (takes 20 losses to lose most of the 4000 rather than 12), and if that goes well, which if it's a profitable investor is more likely than not, then once at +5R (+$950) or so investor could then increase it $280 which overall is safer, and much more likely to work out. With $280 from the start 5R would be 1400 so investor left 450 on the table, not that big of a deal. From that point the next 12 will have a 280 risk, if unlucky then there is still profits left and we can drop to 190 before returning to only 100 which hopefully won't be the case, at least most of the time. Then stay at 280 a while (if it works out) and next time big profits appear, risk that + a part of the 4000, without touching the rest of the profit made in the meantime. Risking profits is really not the same as risking the "bulk" or "base" capital, that's a slippery slope... Rule number 1 = protect your capital Rule number 2 = do not lose money
Education
by MrRenev
99
DXY Oil11.27.19 Yesterday I uploaded a video suggesting that the dollar was going higher. Today is the follow-up in a quick review of that market. Next I discussed oil and talked about ways of taking profit and scaling entries and exits to make more money with less risk. And then I took an example using the oil chart of how markets are really much more likely to benefit buyers and sellers and not just one side of the market. But depending on how involved you want to be as a traitor, you may or may not want to see the algorithms for both buyers and for sellers as markets can benefit both sides, and it all depends on the trade location and an understanding of the set up and what you can expect for a reasonable target. I did not talk about one other aspect of this on the video, but in transitional periods in the market when markets are about to make significant changes, markets can actually burn buyers and sellers. This is why the market can be so difficult and why most traders fail a trading. I found in my own study of the market over the years is that I had to dig deep into the assumptions and the way that I processed information so that I could change my paradigm... and accept those changes... in order to benefit from the market. I had to change many things over the years.
FX:USOILEducation
by ScottBogatin
How to properly scale your chartsMany charting tools require a proper scaling of price / time. This is the method I'm using to scale my charts if needed. 1) Draw a rectangle somewhere on your chart 2) Set it's coordinates to 1:1 So if the price coordinates are 300/350 , set the bar (time) coordinates to have the same difference of 50 in this case 3) Draw a "Fib Speed Resistance Arc". You can find it in the second tool bar menu where you also find the Fib Retracement 4) Set it's PRICE coordinates to the same you have set for the rectangle. For both BAR coordinates you use the smaller number from the rectangle bar coordinates. Now after you have done that drag one axis (price or time) and move it around. Watch the upper right corner of the rectangle cross with the fib arcs. If it crosses with the 1 fib arc, you have a 1:1 scaling. On the chart example you can see it cross the 3 fib arc so the scaling is 3:1 If you found a nice scaling, right-click the price axis and select "Lock Scale" so you can zoom in and out of the chart without changing the scaling. You can try the following scaling ratios: 0.5 / 1 / 1.272 / 1.414 / 1 / 2 / 3 / 4 / ... also all the X.618 ratios could be usefull. (0.618 / 1.618 / 2.618 / 3.618 / ... ) Let me know how this works out for you and feel free to leave a comment if something is unclear. Cheerz : ]
BITSTAMP:BTCUSDEducation
by MagnusTradingGroup
11