Money Management Question

[Go easy on Margin]

and heres the chart

Macs dont work well here. Vertical is the original a/c value, horizontal is the percent of a/c risked per trade. As you can see beyond a certain point it doesnt work. It's an interesting experiment to do varying risk reward, percent of trades correct etc. I'm sure this can be optimised.

 

[ChrisEccles]

Hey, I'm a Mac-man, too (Even though I have to resort to a Dell PC
to run GFT's DealBook360) !
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There was a lovely article some years ago by Rob Borowski called
something like "Forex Roulette", or some such title. The point he was
making was somewhat similar to goEasyOnMargin's last postings, in that
he looked at Forex trading in the same way as the "stacked" odds in
favour of a casino. The point he emphasised was that "coin-flip" trading
will never win, but that most traders have at least some degree of edge
over the random plays which characterise coin-flip. You actually need to
be right 52% of the time (allowing for broker spread - the roulette wheel's
'zero') to break even. Some very simple trading methodologies (such as
MACD cross + RSI overbought/sold) have a better than 52% performance
record, but I guess it might take nerves of steel to trade this way. I have
never attempted it !
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As this thread is supposed to be about money management, this could
be taken as a hi-jack, but I thought it was an interesting aside.

-
Chris