38 consecutive wins, 0 losses = win? | Forex Factory

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38 consecutive wins, 0 losses = win?

  • #1
  • First Post: Apr 8, 2010 5:07pm Apr 8, 2010 5:07pm
Hi,
My dad is a Forex newbie and I know nothing about Forex at all. A few days ago my father came up with an algorithm that he has been testing using play-money. Although all his other ideas failed, this algorithm has yielded 38 consecutive wins for him with 0 losses. Could this just be a coincidence, or does he really have something here? He is reluctant to believe that a newbie like him could create such an effective money-machine so quickly.

What are your thoughts on this?
  • #2
  • Apr 8, 2010 6:43pm Apr 8, 2010 6:43pm
Quoting mfurlend
Hi,
My dad is a Forex newbie and I know nothing about Forex at all. A few days ago my father came up with an algorithm that he has been testing using play-money. Although all his other ideas failed, this algorithm has yielded 38 consecutive wins for him with 0 losses. Could this just be a coincidence, or does he really have something here? He is reluctant to believe that a newbie like him could create such an effective money-machine so quickly.

What are your thoughts on this?
What is risked in each trade compared to what it won? There are ways of trading with large stops that can win 99% of the time but the one time it loses results in catastrophic account damage and much weeping.

If its a decent ratio of risk vs reward then I would run more tests until you get 100 or so trades.
Economists have forecast 9 out of the last 5 recessions
  • #3
  • Apr 8, 2010 7:15pm Apr 8, 2010 7:15pm
How do I quantify the risk v.s reward?
  • #4
  • Apr 8, 2010 7:59pm Apr 8, 2010 7:59pm
Quoting mfurlend
How do I quantify the risk v.s reward?
To start, what size capital are you working with?
  • #5
  • Apr 8, 2010 9:19pm Apr 8, 2010 9:19pm
Risk to reward can be put simply, if you make $100 on a trade and you risked $50 at your stop loss level your risk to reward is 2:1.

It would be unrealistic to me for 38 wins in a row especially day trading, I am sorry if that offends you but I see hundreds of so called forex robots that claim high % win rates but the losses are 5 times the risk or more. Check the size of the stop loss or maybe check the back test results your self the programme could be peeking?

I recommend risk should be 1.5 to 2 times your stop loss from my trading experience anyway.

cheers

Darren
  • #6
  • Apr 8, 2010 9:29pm Apr 8, 2010 9:29pm
It is possible to flip heads 38 times in a row as well, although highly unlikely. Trading is a lot about statistics and getting probabilities on your side. One run of 38 is remarkable for any strategy, but it doesn't prove much other than more testing is needed. Wait a few months and then evaluate the results. Until then tell your father to keep his day job.
  • #7
  • Apr 8, 2010 9:36pm Apr 8, 2010 9:36pm
Quoting CodeMeister
It is possible to flip heads 38 times in a row as well, although highly unlikely. Trading is a lot about statistics and getting probabilities on your side. One run of 38 is remarkable for any strategy, but it doesn't prove much other than more testing is needed. Wait a few months and then evaluate the results. Until then tell your father to keep his day job.
To flip a coin 38 times in a row you would need 10 to the power of 30 people playing one-on-one. Can anyone please give me an example of an algorithm that can win 90 times in a row but lose big when it does?
  • #8
  • Apr 8, 2010 9:48pm Apr 8, 2010 9:48pm
I agree CodeMeister.With a good risk to reward ratio the win rate can be lower and still begin to grow your account steadily, trading has the misconception that you will be a millionaire over night (yes I tried it ,LOL) but once you get a system then comes discipline, psychology, over trading and then greed.

Most systems or ideas work but human intervention happens and a demo account ultimately are only good if you trade systematically, use your correct position sizing stop losses and targets etc. People treat demo's with the thought that it is not real I will take that trade this time because it is not my real money.

Trading is a fantastic ride and a real pain in the butt too as back testing has one thing live trading doesn't have that is hindsight.

Remember if you can't afford to loose it don't trade then.

Cheers Darren
  • #9
  • Apr 8, 2010 9:51pm Apr 8, 2010 9:51pm
Hey mate

Go check out the fab turbo trading website and look at the the tiny wins and then look at the losses. You will find one loss will wipe out the last 10 trades profit. Now that is tough trading
  • #10
  • Jul 27, 2010 4:41pm Jul 27, 2010 4:41pm
Mate, i reckon try it and see!
All the best in the development of your system
  • #11
  • Edited Jul 28, 2010 11:56am Jul 27, 2010 5:25pm | Edited Jul 28, 2010 11:56am
Have your pops open up a live account with 20% of his annual salary. Trade it using his method for 2000+ live trades. When you do that I'd like to know your return.

Believe me, the difference in demo trading and live trading is like:

Demo - you play a video game and swim with the sharks.
Real -you get dropped off in the middle of the pacific ocean and YOU swim with the sharks with no protective cage or gear while chum is being poured around you.

That's the difference in intensity from fake money to real money. No matter what you think, you won't trade or treat a demo account like a live account.


EDIT: I'll add this too. When it's all said and done, your %Return is what's important. You could have 1000 winners in a row then a loser and still wipe out your account if you don't properly manage your money and your trade.
  • #12
  • Jul 28, 2010 7:11am Jul 28, 2010 7:11am
try it on micro with a live account, then see how it goes.
  • #13
  • Jul 28, 2010 7:13am Jul 28, 2010 7:13am
Quoting CodeMeister
It is possible to flip heads 38 times in a row as well, although highly unlikely.
might be possible, but I doubt it's ever been done.
  • #14
  • Jul 28, 2010 11:29am Jul 28, 2010 11:29am
its not impossible, just highly improbable. keep testing it for the coming months and see what happens. maybe the 38 wins was a fluke, but even if you had 19 losses out of the 38 youd still have 2:1 winning streak. of course depending what your risk-reward ratio is, it could still be a negative outcome.
  • #15
  • Apr 22, 2017 4:09pm Apr 22, 2017 4:09pm
Random chance depending on the variables you put in. You can rack up a winrate like that by accepting large amounts of drawdown. Unless you know why a trading strategy makes money in terms of how the markets fundamentally work in terms of where orders, stop losses, and big institutions are gunning for, you're not going to be able to take a ride on their coattails.

Everybody in the EA community thinks that if they just find the golden ratio of variables, they can find a "system" that will consistently make them money. But the thing about statistics is, you can tailor your EA to fit the past. That doesn't mean it will have any prediction power for the future. For example, maybe there is a statistical bias in the lottery for a certain number to show up in the first draw. So what? The chance of a 5 popping up is still 1 in 10 assuming we're talking about 0-9 here. That it came up in 9/10 of the last lottery draws in the first round is irrelevant.
  • #16
  • Jul 7, 2017 7:41am Jul 7, 2017 7:41am
Whatever it is! There is no 100% in Forex business! But, really your father has a good trading system, that’s really great! By the way, I have started my live trading after making 1K trades in demo with 68% accuracy.
  • #17
  • Jul 9, 2017 7:16am Jul 9, 2017 7:16am
oh come on, just when it was getting really interesting, i find out this is a 7 years old thread, the kid could be an adult now and married with kids, it just killed it in an instant. the algorithm was really intriguing. was about to ask about it but i guess ill never find out what his dad came up with and ended up blowing in in trade 91!! jeezz
  • #18
  • Aug 28, 2017 5:11am Aug 28, 2017 5:11am
38 winning trades; that’s a good result! But, that doesn’t mean you are trading with a 100% profitable trading strategy! Make 1K trades first then judge your trading strategy or system! Don’t take your decision so early!
  • #19
  • Aug 28, 2017 8:11am Aug 28, 2017 8:11am
The result itself is good on its own, but I think that any algorithm should be tested over a long period of time - months to a year - and under various market conditions to see just how profitable it is.
  • #20
  • Aug 28, 2017 7:20pm Aug 28, 2017 7:20pm
Quoting GeorgeBaile
38 winning trades; that’s a good result! But, that doesn’t mean you are trading with a 100% profitable trading strategy! Make 1K trades first then judge your trading strategy or system! Don’t take your decision so early!
I think there is no trading strategy which is able to earn profit 100%. You can earn profit by means of your trading approach hugest 55-65%. True fact.
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