A trader splits one $200,000 account into four $50,000 accounts, risking 1% per trade and using only one account per week. A losing month that would devastate a single account leaves two accounts untouched, making recovery easier when the strategy turns profitable again.
This is the model that took me from a losing trader to a world champion trader at 22. Let's compare 2 traders. The first one is trading with a $200K account. Me, instead, I have 4 $50K accounts. I will still risk 1% in every account, but the difference is this. I will trade 1 account per week. Let's assume I closed a month at -4% because my strategy went in drawdown that month. I had -7%, +3%, -4%. And +4. Here instead, I just gained a -4. Here in a losing month, I made $2.8K and I still have 2 accounts that are safe. Instead, here I will be at $1.92K. How much did I earn that month? Zero. Of course, this will reward me if the strategy loses. If the strategy wins, here I will get more money. But what is the interesting thing about this method? What is the power of B of making money the next month? Because he needs to recover drawdown first. The trader A still have 2 accounts in breakeven, so he has more chance to make money other month. That's what I use for trade platform.
