Updated: Sep 26, 2020
This case study follows a research project conducted by xCaliber trading to test how quickly their differentiating training approach could help someone with no previous trading experience become independently profitable in The Forex Market. We found that after 2.5 weeks of part-time coaching, our test subject was able to reach a profit target of $10 each day for 10 consecutive trading days on the EURUSD pair using a 0.01 lot size in a demo account of $5000 with no visual reference during the sessions other than price. This was achieved over more than a hundred individual trades.
THE FOREX MARKET
Forex Trading is notoriously difficult. Studies indicate that as much as 80-90% of those that attempt it typically lose all their money within the first 3 months. It can take anywhere from 6 months to many years to develop a technique or trading strategy that will allow a trader to consistently profit from the Forex Market. Many are drawn to Forex Trading as it has very low barriers to entry. In fact, you can open a leveraged account and get trading within a few minutes with as little as $20. The lure of easy money and quick returns draws thousands of new traders each day to try their luck, and while some may get lucky for a time, ultimately the markets will conquer unless an individual has the training, experience, and mindset to consistently draw profits despite the volatility that comes naturally with any kind of market transaction.
In 2019 xCaliber set out to test if their techniques and general approach to asses how quickly that could help a person with no previous trading experience consistently profit from the market.
Levi, our first test subject, was a 20 year old male who had a reasonable amount of time to dedicate to working on the project. He is an avid gamer which was a great characteristic as hard-core gamers typically have the competitive streak and strategic mindset that will help them tackle the Forex Markets. Another useful aspect of having an avid gamer as our test subject is that gamers are not unfamiliar with failing. Gamers regularly fail levels, scenarios on their PC's or consoles but are obviously very aware that persevering will achieve the desired results, which in their case would mean winning the level/scenario/game, etcetera. This is not dissimilar to trading in the Forex market.
On Sept 13, 2019 the program was officially kicked off.
The first week was dedicated to setting up the MT4 platform and getting familiar with the collaboration tools.
Below is a list of topics that were covered in this week.
- Trader Station Overview
- PC Screen Recording
- MT4 Simulator introduction
- Simulator Logbook Setup
- Sim Trading Demo
- Forex Market Questionnaire.
*Levi conducted his own research to answers in the Forex Questionnaire.
Below is a list of tasks that were assigned in the 2nd week.
- Achieve 0.5% consecutive profit targets for 5 consecutive sessions
- Once 0.5% challenge is met target 5 consecutive profitable session of 1%
- Once 1% Target is met attempt 1.5% profit target for 5 consecutive sessions
- Execute numerous recovery drills
- Conduct (2) 24hrs trading session on EURUSD in the MT4 Simulator
- Complete 10 consecutive profitable (+ 1%) sim sessions on different time frames
Dark Trading is a technique whereby a trader participates in the Forex market without spending any prior time or effort analyzing the markets (such as through charts), using any other means to determine the bias of the market’s direction, or identify any viable entry and exit points.
A trader in essence deletes all chart indicators other than the price level and selects a direction in the market based on the day price or how they might be feeling that day (it really doesn’t matter) and then scalp the price action on a 1 minute to 4hour chart. The proven hypothesis behind this technique is that it’s not necessary to perform technical analysis, chart patterns, identify trends or use indicators to profit from the Forex Market. A trader can consistently profit from the market by just trading pure price action.
Dark Trading Demo
Levi practiced the Dark Trading method on the MT4 simulator EURUSD 1 minute chart.
After a few attempts, he was then provided with an excel logbook to record his progress. During the experiment, he had recorded over 40 simulator sessions, which could last anywhere between a few minutes up to an hour. Once Levi had reached a set target, he would then re-attempt the goal during a different period. This helped him gain valuable experience in a variety of market conditions in a short amount of time.
For each simulator session he would record the date selected on the simulator, the currency pair, result, percent of account increase, pips won or lost and the actual sim time period. The only time frame used was the 1-minute chart, all sim sessions did not include any visual references other than price. No charts, indicators were used, it was Dark Trading all the way. Repeating the same simulator time frame was discouraged.
MT4 Simulator: Visual Demo
The first attempts by Levi had negative results, though that started to change over time as he got used to the price movement which he was essentially scalping with a two pip profit target and a wide stop loss of 30 pips.
In order to move to the next phase of the program Levi was required to win 10 sim sessions in a row which was achieved in less than a week.
It’s not helpful to only trade in calm conditions, as this fails to teach real time market volatility. Levi's capstone challenge was to reach a profit target of $10 for 10 consecutive trading days in live market conditions. Levi
certainly encountered many challenges as he was building time in the simulator though we needed to help him learn how to handle extreme situations that could arise at any point in his trading. In order to prepare him for this we returned to the simulator, only this time we provided a list of timeframes for big events that would take place.
If he was unsuccessful in recovering his account, he was encouraged to attempt it again until he had mastered it so that if such an event were to happen again, he would have the confidence through experience to handle it. The premise of Dark Trading is that if you manage your risk responsibly there are very few market moves that a trader would not be unable to recover from and that is what we were training Levi to master.
THE 24HR CHALLENGE
To qualify for the final capstone challenge Levi was required to trade a full 24hr period on the MT4 simulator. This didn’t literally take 24hrs because he was able to speed up the pace so in essence he could trade a 24hr simulated period in the space of 2hrs. The purpose of this exercise was for Levi to gain the experience trading the Market ebbs and flows as well as busy and slower periods in the market on any given day. To complete the challenge Levi had to complete the 24hr sim session and close in profit. This was achieved on the first attempt.
The final capstone challenge was to trade in live market conditions on an MT4 demo account and reach a $10 profit target everyday for 10 consecutive trading days. The EURUSD 1 minute chart would solely be traded without any visual references other than price. I would not provide any help, guidance, or any form of support during the entire period. Levi was on his own, however I would login to the account to assess progress from time to time. On the 10th of October 2019, Levi started his 10-day challenge which was completed successfully on the 23rd of October 2019.
This experiment was to assess how quickly a person could learn to consistently profit from the Forex Market using xCaliber's unconventional trading techniques. The results exceeded expectations! We took a person with no previous experience and were able to teach him how to be profitably trade Forex in less than five weeks. These are exceptional results given the complexity of the Forex Market and day trading in general which typically takes many months, or even years, to master before one is able to consistently generate a profit.
What is even more exceptional, is that Levi traded price without incorporating technical analysis, indicators, charts or any other form of visual references that so many new traders believe are required in order to turn a profit. While visual references can be helpful, our case study proves that they are not. Visual references such as charts or indicators may provide good entry or exit signals to the experienced trader, however one needs the experience to also recognize the equal amount of false positive signals they produce.
Author: Ryan Norris
xCaliber Trading Founder
1. Discussion Minutes September 22nd
From: Ryan Norris Sent: Sunday, September 22, 2019 9:08:47 PM To: Levi Subject: Discussion Minutes
Tasks for week 2.
1. Download install Whatsapp and Cashapp
2. The whole week will be dedicated to striving to consistently win Sim Trade sessions.
· Color in Stop Level line so you can see your trade profit targets etc.
· Keep the pace on the slider around 25-27 in busy periods.
· Trade one side of the market (don’t trade both sides at the same time).
· In Sim sessions, target $3 (0.5%) session win target, once you meet your target close session record in Journal then do another session targeting $3. Once you hit that target 5 times in a row move up to $6 (1%) target and repeat process until you completed 5 consecutive wins and then increase target another 0.5% etc.
3. Discuss this weeks challenge on Wednesdays catchup.
4. May send another quiz as well (TBD).
Below is the link to my session last night if you think it might be helpful. Not a requirement.
Thanks for all your hard work!!
2. Discussion Minutes October 6th
Hamilton Challenge (to Pull $10 out of the market for 10 consecutive trading days on a $5000 Account).
Practice Dark Trading in Demo mode. Experiment with different lot sizes and different times of the day (NY Session). Record 1 Session when you have found a comfortable lot size to achieve $10 Daily Target (Manage Your Risk) .
Complete a minimum of(2) 24hr TraderAgent Sim Sessions. Record at least 1.
Lets see how your doing by Tuesday evening, if all looks good we can kick off the challenge.
Just shout if you need anything.
3. Email Response October 5th
From: Ryan Norris Sent: Saturday, October 5, 2019 5:04 PM To: Levi Subject: RE: hedge attempt
Thanks, I think the lot size really sunk you on this one.
0.10 is pretty large for this size account, I might trade that on a $10,000 account probably no less.
I can see you getting the concept though and going through the right steps which is great.