Part 1: The Difference Between A Ferrari and A Mercedes Benz

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How important is reinvesting your trading profits back into your system? You want the new Mercedes Benz or do you want the new Ferrari?

Let’s dive into a strategy of mine and find out…

First off, I can’t disclose any specifics of the strategy we’re going to use because it is currently in use and still profitable! Just closed out a $3,687.50 per contract winner. Here is the blog post: Apex_Big_Win_AND_Rollover

It is available in the Active Elite Package, however. You get alerts to six algos (this being one of them). Subscribe to the real-time alerts here: http://trademyalgos.com/active-alerts/ and get a Free Trial this month.

Ok, now for the details. Let’s assume you traded this strategy from 2002 until right now (September 2015) and you only trade 1 contract per alert. Y never increase your size and you take your profits out to spend them on your wife, new toys, or whatever weekend extra-curriculars float your boat.

Here would be your performance results…

Report PnL

**Notice the scale on the equity curve graph showing $100,000 in profits**

Amazing. 90%+ win rate and $100,000 in trading profits. Definitely enough to buy a Mercedes Benz and keep trading comfortably. Heck, even some cash in the bank. Happy?

Ok, now let’s say you waited and waited and kept reinvesting your profits back into your account. You never spent any of your trading profits and continuously added 1 contract to your position size for every, let’s say,  $10,000 in trading profits. Here’s those results…

 

Report_1_pic2PNLpart2

**Notice the scale on the equity curve graph showing $1,900,000+ in profits**

Wow. Same 90%+ win rate, but now we have $1,900,000 in profits. That’s right, 1.9 million in profits. Almost 20 times more than the trader who didn’t reinvest his profits into the system and grow his account aggressively.
Instead of getting that car your co-workers would be envious of, reinvest your profits and get the car the whole world would be envious of…

 

-Keep a look out for part 2 in this series. I’ll discuss trading with and without fear; namely, to use or not to use stop losses.

 

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  • Mitchell
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    So many interesting posts i read here, i think you can make trademyalgos.com go viral easily using one tricky method.
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