How This Novice Trader Turned $500 - $4 Million On 1st Try (Genius Formula)

I'm going to show you how this novice trader took a $500 account to 4 million on his first attempt. I'll tell you the full story, explain his system and reveal the very unorthodox formula that he used to make it happen. It's a case of fact being stranger than fiction. But to explain what he did and how he did it, I need to take you back to July 16, 2019. Steven Moffat was a 35 year old married warehouse manager living a very normal life. And like most people, he he had just enough money to get by each month as long as his circumstances didn't change. But they did change. His second daughter was born with severe physical and learning difficulties. To give her the care she needed as she grew up, the house would gradually need to be adapted to accommodate her needs and special equipment. And like many young fathers, Stephen was beaming with pride, but also felt the weight of the responsibility on his shoulders. His wife wouldn't be returning to work, so his income alone would need to provide for all of the needs of the family. Money was now very much an issue. So with a sense of urgency, perhaps even desperation, he went online looking for ways to make extra income. And as anyone who's ever done a similar search will know, Forex came up again and again. Surprisingly, considering what this video is about, Stephen completely rejected the idea. Sitting at a computer and reading charts held no appeal to him whatsoever. So to say he was a reluctant trader is an understatement until something dramatic changed his mind. But for you to understand what that was, you need to understand something quite controversial. If you want to make extra money, Forex is the last place you should look. 98% of traders lose money. Taking a second job at McDonald's is easier, quicker and more reliable. And 98% of traders would be wealthier if they just did that. But Stephen's problem wasn't really a bank money. His real problem was about freedom, financial freedom and time freedom. As a father, he wanted to provide not just necessities, but also luxuries. And most importantly, have the freedom to be there in person for his family. That's what Forex offers that regular jobs don't. It's not a simple exchange of time for money. Once you can reliably earn $1 per trade, you can earn a thousand dollars per trade without any additional work. That realization changed his mind about Forex. He understood his higher purpose, his reason why. It wasn't about money. It was about being the best husband and father he could be. So he took up the challenger Forex. And then he did something weird, something no new trader ever does. Most people buy online courses or join forums, copy signals or purchase robots, but with the obvious fact those things don't work, Stephen bypassed them and instead went looking for a professional trader managing money, not selling courses, who would agree to sit down with him face to face and act as a personal mentor. It was an ambitious move, but amazingly, he found someone. And I'll tell you their name in a moment because you'll be familiar with it. But first, notice how contrarian Steven is by nature. You'll see this with his system shortly, that he does this with his entry and exit strategies, but it makes up a foundational piece of his formula. Overall, the crowd are wrong about everything, so he always does the opposite. It's a decision that seems to pay off. And what he did next was also different. And this turned out to be not such a good decision. He borrowed money to fund his trading. Considering the odds of success are 2 in 100, borrowing money, the stat, say, is almost certainly going to be lost is reckless. And this decision was going to cause a world of hurt and take him to the point of ruin. So, in debt, before he even started, Stephen had crossed the threshold and there was no turning back. Now, just like learning to drive, even with an instructor on your side, you are going to be clumsy and make mistakes because it's an unfamiliar environment. And like every new trader, Stephen made plenty of errors, like pressing buy when he meant to sell, adding to a position when he meant to exit, using the wrong lot size and forgetting to set stops and so on. We've all been there and it can be very frustrating, but he used a clever tactic that at first glance seemed dumb, but it's actually genius. To develop trading skills, you need real time experience, watching live charts and pulling the trigger as conditions unfold. Backtesting is useless for this and his system was designed to catch big trends over long time frames, which could take two or three years to get enough trades under his belt to gain the necessary experience. And he didn't have that long. So he didn't practice his system. Not exactly. Anyway. He took advantage of the fact that Forex markets are fractal. Without any information on the axes, there's no way of knowing if these price candles are daily or one minute. If his system had a three to one ratio, rather than wait five days on a daily chart for that to happen, he could do 12 in an hour on a one minute chart. So essentially it was his system, but in an accelerated version. And it Allowed him to gain more experience in a week than he otherwise would have in six months. And before long, he was ready to switch from a dental account to live. And that's when it all went to. As soon as he started with real money, he hit a losing streak. It's happened to us all. When he switched him down to live, right? It's like the market seemed to know. And although the drawdown was completely normal, as a new trader with his first live account, he wasn't emotionally prepared to get off to such a bad start. His account was shrinking, and this was borrowed money that he couldn't afford to lose. And he quickly lost confidence in the system and in himself. And what he did next was a nightmare scenario that needy wiped him out. After a series of losses, he shut down his computer in anger and he walked away. He needed a break. What he didn't realize is he'd somehow left the position open without a stop loss. After a week of regaining his composure, he opened his platform ready for a fresh start, and was confronted with a catastrophic loss that had taken his account from a starting balance of $4,000 down to only 500. You can imagine the feeling in the pit of his stomach. It was almost impossible to see a way back from this situation. And it's worth asking yourself what you would do knowing you just wiped out a loan that you needed to pay back. Most of us would consider this hopeless. But he once again did something unusual that turned his last $500 into 4 million within two years. In fact, there were two absolutely crucial things that happened at this point that were the turning point for him. And you'll understand what they were after you've seen this next part. He calmly closed the massive loosened position and entered the very next trade. And it won. And the next trade and the next trade. For some reason that I'll explain in a moment, you, he was able to ignore the loss and trade his system perfectly trade after trade. Over the next few weeks, he could see the distribution of wings and losses balancing out his winners more than making up for the small losses. He saw the positive expectancy on each trade. He understood his edge, and gradually his equity curve rose higher. And as he saw his system begin to work, he had a newfound belief in the system and more importantly, in himself. It was a huge shift in mindset. What got him there initially was perseverance. That was the first thing. This is a hugely overlooked trait of winning traders. He didn't change his system or any rules after the losses. He didn't go looking for A different system. Obviously, having a mentor supporting him was critical, but ultimately it was him who have the sense to stick to the plan and stay on track. One of the main reasons most people fail at trading is simply because they change course too soon when they have a setback or they fail to reach their targets quickly enough. It's like getting into a car to go from A to B and at various stages changing your mind and looking for a different route because you're not there yet. Steve had the sense to trust that he was on the right route. And as long as he stayed on it, he would reach that destination. Perseverance is the number one determining factor for predicting success. It far outweighs skill, talent, intelligence, or anything else. But there was a second reason why he was able to persevere. Even with the light at the end of the tunnel, he was still deep in the tunnel and he faced serious consequences for what had happened. His account was less than when he started. He was still in debt and he had nothing tangible to show his family. His wife was struggling with the load of caring for a young family and a new baby with special needs. So stress and tensions increased. Arguments arose. It really pushed his relationship to the brink. And his in laws were even suggesting separation and divorce. From the family's perspective, forex trading was causing more problems. It certainly wasn't solving any. So it was a really difficult time and most people would have admitted defeat. The reason Steve was able to carry on was because of the same strategy the world's top poker players use. The best hand to be dealt in poker is a pair of aces. Matt beats everything else. But depending on which other players stay in the game and what other cards are dealt in the middle, aces can sometimes lose. Poker players know that even with the best hand played perfectly, they can sometimes lose because there is an element of luck involved that they can't control. And Steve understood the same principle with trading. He can make the perfect entry under perfect conditions, with the odds stacked perfectly in his favor. But the direction price goes next is out of his control. A loss doesn't mean he did anything wrong or made a mistake. In other words, he was able to detach his emotions from the outcome, something poker players are experts at. He didn't judge his performance by individual wins and losses. He judged it by whether he followed the rules or not. He trusted the system and the process and knew as long as he kept making good decisions and following the rules, he, his edge would keep working in the long run. By not taking it personally and detaching from the trades over the next several months, the system was able to do what it was designed to do and he recovered all of the losses and made new equity highs. He started with a $4,000 account which dropped to 500 at its lowest point. But 10 months later he had clawed his way back and was up over $10,000, about a 1900% return. By itself. That's incredible. But it's a long way from 4 million. So I'll explain the trick he used to hit that number in just a moment. First, let me quickly explain his system. You already know he was a contrarian, but perhaps not in the way you imagine. He did two things no one else does. First, he used individual currency strength analysis to select his entries. Forex is unlike other markets in that each pair is two separate instruments that need to be assessed in isolation before you know which way the price is going to go. You you should only trade the pair when you know both currencies are moving in opposite directions. I'll leave a link in the description to another video where I explain this exact strategy in detail, but it massively increases your win rate. The second thing he did was manage the stop loss from the lower time frames to the higher time frames. Most people do a top down analysis. They look for trends on higher time frames and then time their entry on the lower time frames. That's back to front for a train to be visible on the higher time frame. It's already been underway for a long time and massive chunks of profits have been missed. Steve understood that all trains start on the lower time frames and move up. So he entered on the lower time frames with a tight stop loss as though he was a short term scalper. But as the trend progressed, he switched up time frames and managed to stop according to that chart. And as the trend went further, he switched up again and again until eventually he would be managing his trade and stop on daily charts like a swing trader with several hundred pip distances. Even though he started the trade with a very tight stop of perhaps only 10 pips. That meant while each trade only ever risked or lost 1% of his account, some of his winners could be double or even triple digit returns. His reward to risk ratio was enormous and a few of the trades doubled his account by themselves. He also took fewer trades because of this, which meant lower transaction costs and less time in front of the charts. All opposite of what most traders do. By any measure, he was a successful trader. He was consistent and making enormous percentage returns. But it still wasn't help to his family he'd borrowed $10,000 to pay for his education and fund his first account. So on paper, after 12 months, he was no better off from when he started. But now the magic happened. With a 12 month verifiable track record, friends and family wanted to invest with him and he raised $100,000. Over the next year, he grew that to 400,000 and he paid himself nearly 90,000. That was double his annual salary as a warehouse manager. Other people's money is the secret to becoming wealthy from trading. All millionaire traders have leveraged other people's money in some manner to multiply their account size. All you need to get that is a reasonable period of consistent results. And now, with a two year track record, his account was flanked by his broker. Profitable accounts are few and far between, so when one does appear, they get noticed and then introduced to professional equity funds who are actively looking to invest in good traders. Just over two years since starting, this novice trader with no previous experience was given $4 million to marriage and he paid himself a million dollars as his annual salary, all while working from home, no more than a couple of hours a day. It's what every trader aspires to do. And he did it using a simple formula that, well, it's just too boring for most traders to even notice. Hey, hope that's why most traders fail. But there are two things I've left out of the story. I promise you the name of the famous trader he managed to convince to mentor him in the first place, and I'll tell you that in a moment. But first, there's one final piece of the formula that's a bit controversial. Although he used a mechanical rule based system, the thing that transformed Stephen from an okay trader to a great trader was discretion. Occasionally rules need to be broken and only a human can instinctively know when that is fully mechanical. Robots can work, but they will never be as profitable as a skilled person with an intuitive field for the market. Knowing how to respond rather than merely react. That's the complete formula he used and the story behind this success. So who was the famous trader who mentored him? It wasn't anyone famous. It was me. Stephen was my first client. I've been in forex since 2004, first as a bank trader and then as a money manager for private equity. And since Stephen, I've been mentoring new traders and so far I haven't had anyone fail. You can visit my website if this sort of thing interests you. And if you want more videos like this or lessons, tips and advice to help your own trade in. Consider subscribing to the channel and checking out the other videos that I've uploaded. And sign up to my newsletter where I give regular training, all for free. I'll see you next time.