After blowing a small Nadex account this week I had a thought about the reality of that well known claim that 95% of traders will lose money. But this time instead of challenging that concept in a traditional manner by tweaking my system or changing entry rules, Id like to enlist the help of the ForexFactory community to run a controlled trading experiment.
What if... instead of focusing on chart technicals, fundamental news, and other data to find the best entry area for a single trade we focused entirely on managing a basket of existing micro positions, where the only varying factor will be when the trader decides to close each position? How will results vary within the FF community when that main variable many of us worry the most about, trade entry, is removed and the focus shifts to trade management? That is what I would like to explore in a controlled systematic way.
The rules to participate:
- You will need a fresh demo account with $1000 of capital set at 40:1 leverage.
- Come market open, Sunday evening, you will immediately need to enter 10 x micro-lot positions, all longs (market buys, no limit orders). Each micro-lot will be one FX pair, so 10 pairs total (note, don't worry about trying to get a good price or waiting for a few down ticks before buying, have your 10 tickets filled out and buy as soon as the market opens).
- You may close any pair at any time, for a loss or for a profit. There is no re-entry. There are no additional trades. These 10 trades will be your only source of income this week ( Again DEMO). Your week is over when you either: incur a margin call, close out your last pair, or Friday close of market (if you have open positions).
At that point we will name the winner (be willing to verify your profits with demo account statements).
I will announce the basket of pairs this Friday at market close (approximate).
If traders are enjoying the challenge and learning from it, we can easily reset the challenge weekly with a different basket of pairs or slight rule adjustments giving traders the opportunity to step up their game and dethrone the champ.
Feel free to announce your participation and use the thread to discuss portfolio management ideas throughout the week. The games begin July 23rd at 5PM Eastern Standard . All I ask is you compete with respect and keep comments constructive.