Comment by Peter jcp 8 minutes ago
This as got interesting now - because many new traders and guys who believe everything they read will be trying to copy a similar strategy and even if they dont make 6000% in one week will think - well even if i only make 500-1000% I will be happy.
Haitham is quite correct in his analysis of "easy come - easy go" - so if you are "into" total risk and dont mind blowing a small account in one or two trades- then try it !.
However if we do look at it not through "rose tinted specs" - but cold hard facts - you then might not be so keen to try it if you are a trader - (and look upon yourself as a "pure gambler".)
Most traders know that very experienced short term traders can be 75-90% correct in their analysis. It becomes more difficult over longer periods of time because there are a lot more "parameters" and other factors that make prediction more difficult - and harder to sustain.
So I believe to get say 25 trades correct in a row in certainly possible. - Just like you can make 10 trades wrong in a row - but still have a 65% + average success rate.
However to compound your increases on every trade you take - and maxing your drawdown without margin call - means the financial results ( not the pip sizes) need to be at the largest in last half of the trading total. Any proper techniques -- accepting 25 wins in a row - should see more increases in trades say 18-25 then for 5 - 12 - simply because of the size of the stakes - ie 100 pips at $3 dollars a pips ($300) - is still not as good as 30 pips at $15 per pip ( $450). That means the graph is wrong for a start - and with only 25 trades can the compound stats on the leverage you need achieve it - I dont know but you would not be able to do it in the US with their leverage?
Next part - probability - for example to win the the main prize in the lottery in the UK the odds are about 14 million to one. In the US - its over 175 million to one and in the "Super Ennolotto" in Italy the odds are over 623 million to one.
An experienced super talented "tech" trader winning 25 trades in a row in a short time period - the probabilities might only be a few hundred to one or less even. A novice trader - that might be over a million to one - but then to win then and make higher enough RR's to achieve the compounding needed - that becomes really into the realms of a "small lottery" win . Certainly possible - but so unlikely.
Other things that are possible and probably in life - but highly unlikely are -
1. Crossing a busy 6 lane highway at peak time - blindfolded and drunk - and living - possible?
2. Jumping out of a plane over the rockies without a parachute - but intending to land on 20 foot of soft powder snow to break your fall - possible?
3. Taking an electric shock of say 50000 volts - in a bath of 1 inch of water and living - possible?
4. Trying to get out of doing any "housework" on a Saturday morning for the wife by pretending you are busy working - possible ? (lol)
I therefore seriously hope that all new traders realise that the heading to this blog - is totally misleading and is just the same as having a bet on the horses or the lottery - its gambling - and not normal realistic trading that can be substained over a long period of time.
Also even if you only end up achieving a miserly 1% gain every day in a trading year of approx 240 days - you have still done extremely well . And that for sure is more possible