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How You Can Make One Million Dollars From 100 USD in One Day Using Forex (And Why It Will Never Happen)

Monday, March 17, 2014

I am not going to lie to you here, it is actually possible to take 100 USD to one million in Forex in one single day. However the fact that something is possible doesn't make it probable and you’ll see – through the analysis I will carry out on this post – that even though such a possibility exists it is far more remote than the possibility to make the same amount of money through other means. During the following paragraphs I will show you how this incredible feat could be achieved, why it would be nothing but luck and why the probability of it happening is very small. You’ll see what the problems in achieving this are and why trying it is a very poor financial decision as there are other ways in which the same “bet” can be made with a higher probability of success.
So how can you make one million dollars in Forex from 100 USD in one day (or two at most) ? It is actually very simple. Take your 100 USD and make a trade with a 1:1 risk to reward ratio in which you either make 98 USD or lose your whole account. Then repeat this many times, each time risking your whole account on the trade or making a 98% profit. The calculations shown below exemplify how this very fast compounding turns 100 USD into one million dollars in about 15 consecutive profitable trades. There is nothing that would make this impossible as you would probably be trading 50-100 pip movement bets which would not be greatly affected by leverage as your account grows towards one million.
What is the catch? Although the above sound “very good” to the newbie (and trust me, many have tried it) the fact is that the probability to actually pull this off is extremely low. How do we calculate this? Well, since the number of trades is extremely small (just 15) no edge will be able to manifest itself with enough probability as to make a difference. A long term edge with a 1:1 risk to reward ratio and a very high winning rate  (>90%) would be needed and such an edge simply doesn't exist (if you know it, let us know!). In summary what happens is that a person doing this would effectively pull this off only out of luck as any potential edge also carries a significant level of randomness which doesn't allow it to show under such a small number of trades.
If you’re simply going to pull this off out of luck then your probabilities of having 15 consecutive profitable trades is actually about 1 in two million (give or take a few thousand) as revealed by Monte Carlo simulations and a simple probability analysis. You will wipe your account on all other outcomes and only one in an extremely large amount would lead to your desired profit level (or even close to that).  Now the interesting thing comes when we compare this with the chances of winning a lottery jackpot for the same amount. My local lottery gives a 1 million dollar jackpot on a 3 USD ticket with a probability of about 1 i n 9 million. If you used those 100 USD to buy tickets that would make your probability about 1 in 300,000 instead, a MUCH better chance at making the money than by playing Forex.
In the end the truth is that the odds of making so much money in such a short time in Forex are there – it is possible in theory – but the actual probabilities are simply ridiculously low and there is a much better chance at obtaining that money when you play some typical random games (like the lottery). If you think about Forex as a “lottery system” then it works in the same way, millions of people try to pull this off and only about 1 amongst a very large group ever makes this bet. The fact that not all money goes to this player but a large part goes indeed to others means that there would probably be one successful outcome from tens of millions that give it a shot. Up until now I have never heard of someone pulling this off and I think there will never be (Imagine making an all or nothing bet with more than 500K on the last step).

Long story short, just because something is possible it doesn't mean that it is probable or that you in particular have some “magic way” of pulling this off. The statistics are clear and the fact is that if you want to take 100 USD to one million dollars in a very short time your best bet is most likely your local lottery system and not the Forex market. Even playing in the same way in a roulette game is bound to be more exciting and at least you’ll have some drinks for free! If you’re into Forex then you need to think about this as an investment and NOT as a gambling venture, otherwise you’ll only lose tons of money, just as you would do on a casino or lottery system (only that your chances of pulling the lottery off are just way better).

 I hope you enjoyed this article! :) 

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