Try to Lose Money Experiment
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Thread: Try to Lose Money Experiment

  1. #1
    Has anyone done this yet? I'm sure it's crossed people's minds before or been completed.

    This type of experiment could shed excellent insights into an individual's own plogy and when done by numerous individuals we can learn about some universal problems in our trading plogy. We would do this on a demo account, though as with lab experiments we'd need to carefully correlate the results of fact. Though the fact that no true worth of money is riding this is likely to make the experiment more powerful in describing trading plogy!

    I guess the easiest way to lose money is by the spread, so that will need not to count. We can invert the spread or not count it at all.

    We would also need to split testers by their actual trading records. Individuals who lose money due to feeble plogy, poor risk management, and poor comprehension of the market would need to be distinct from those who have been always successful. We'll say the former is Group A along with the latter is Group B. We might also have a third group of those who have never traded at all.

    My hypothesis is this: When Group A tries to lose money, most will have the ability to lose money! When Group B tries to lose money, they'll likewise have the ability to lose money!

    If this hypothesis is proved true, then it would surely be great proof in maintaining the power of plogy in gambling. You'd believe it would be easy to reverse your losing methods and become successful, but of course it is not that easy exactly because plogy is so strong that we cannot conquer it merely with knowledge of it. Fears and needs are like intoxicants, you're not able to utilize your knowledge under their sway. It requires discipline, and methods of discipline, to conquer our fears and needs.

    Procedure: I will see how fast I can blow a $50,000 demo account. I would need to differentiate whether or not I am going to use poor risk management or just attempt to make bad trades based on inverting a egy. I could easily take a humongous lot and shut it because it goes enough pips to cover an inverted spread and more in the wrong direction. But this is precisely what some people do if they attempt to win, so perhaps I need to allow my losses run! Hmm....

    One test wont be enough, I will need to do this several times within a time period to truly see if I could always blow an account. I will think about a standards to write down my thoughts and feelings in addition to some emperical data. Then, at least for myself, I'll have the ability to understand how my plogy can hurt me.

    Any inputs? Thanks

  2. #2
    Quote Originally Posted by ;
    Hmmm.. .let's see.

    In case a pattern fails 65 percent of the time (loss = 20 pips) and win only 35% of the time (profit = 90 pips), can we still make money?
    there's a completely technical way to set stops and take profits when coping with these patterns, if there wasn't, they'd cease to exist. If you do not understand how to interpret them correctly then I would suggest reading the above mentioned publiion.

  3. #3
    Quote Originally Posted by ;
    There is a totally technical way to set stops and take profits when coping with those patterns, if there was not, they would cease to exist. If you don't know how to interpret them properly then I'd suggest reading the above mentioned book.
    I read about 80 trading books already, this one included. But that's not the point, you're trying to prove that most patterns fail and aren't reliable, this isn't the case.

  4. #4
    Quote Originally Posted by ;
    I read about 80 trading books currently, this one included. But that's not the point, you were trying to prove that most patterns fail and are not reliable, this isn't the case.
    That I wasn't attempting to prove anything, I had been mentioning material from a book that has explored patterns and their failure rate.

    Within my quote it claims head and shoulders have a 5% failure rate, which is very low.

  5. #5
    Quote Originally Posted by ;
    I wasn't trying to prove anything, I was mentioning material from a book that has explored patterns and their failure rate.
    Then sorry, my error.

    Quote Originally Posted by ;
    Within my quote it states head and shoulders have a 5% failure rate, which is very low.
    Quite low indeed, although millions of individuals are behaving on those Head and Shoulders patterns regular, on the FX, stock or futures markets, this simple pattern is still working like a charm, after all these years.

  6. #6
    Quote Originally Posted by ;
    For anyone who is interested, or too lazy to do their own study.


    CHART PATTERN FAILURE RATE
    ref: Enclopedia of Chart Patterns by T. N. Bulkowski

    PATTERN FAILURE RATE percent

    DOUBLE TOPS 65

    DOUBLE BOTTOMS 64

    HEAD AND SHOULDERS BOTTOMS 5

    HEAD AND SHOULDERS TOPS 7

    RECTANGLE BOTTOMS 0

    RECTANGLE TOPS two

    TRIPLE BOTTOMS 4

    TRIPLE TOPS 15
    Hmmm. . .let's see.

    If a pattern fails 65 percent of the period (reduction = 20 pips) and wins just 35 percent of the period (profit = 90 pips), can we make money hidethereal?

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