Hi FXtradepro,
Sorry if this entry sounds negative but I think everyone should look at all sides. First let me say, Thank You for all the work you shared with the rest of us in this forum. My issues with this system follow...
Las Vegas loves gamblers who double their bet each time they loose because no one has unlimited cash to wait out the times where you have many losses in a row. Those times can wipe out your profits from years of trading.
I did a little statistical calculation; let’s assume that there is a 50/50 chance that the price change could go with or against you. Let’s also assume we will follow the price change every 5 pips. Finally for easy of use, lets say the commission is a total of 5 pips round trip. This means our profit target is 45 pips and our stop loss is 5 pips.
OK, the results I got testing the first 9 price movements (price had to go your way each movement to reach your profit target), I got the following stats:
1 – reached profit target.
23 – reached stop loss
126 – did not reach either target.
Of the 126, the average position was 1.5 pips (closer to stop target than profit target).
I’m curious why some traders here WANT the sequence of trades to be high? Do you really want to be risking $5,000 on the 23rd entry to make back $1,500 in profit when the odds are more than 23 to 1 against you?
Finally, if I had a losing trade 23 times in a row, I would be looking at my strategies and be trading fewer lots, not more.
Sorry if this entry sounds negative but I think everyone should look at all sides. First let me say, Thank You for all the work you shared with the rest of us in this forum. My issues with this system follow...
Las Vegas loves gamblers who double their bet each time they loose because no one has unlimited cash to wait out the times where you have many losses in a row. Those times can wipe out your profits from years of trading.
I did a little statistical calculation; let’s assume that there is a 50/50 chance that the price change could go with or against you. Let’s also assume we will follow the price change every 5 pips. Finally for easy of use, lets say the commission is a total of 5 pips round trip. This means our profit target is 45 pips and our stop loss is 5 pips.
OK, the results I got testing the first 9 price movements (price had to go your way each movement to reach your profit target), I got the following stats:
1 – reached profit target.
23 – reached stop loss
126 – did not reach either target.
Of the 126, the average position was 1.5 pips (closer to stop target than profit target).
I’m curious why some traders here WANT the sequence of trades to be high? Do you really want to be risking $5,000 on the 23rd entry to make back $1,500 in profit when the odds are more than 23 to 1 against you?
Finally, if I had a losing trade 23 times in a row, I would be looking at my strategies and be trading fewer lots, not more.