Re: College Fund Challenge Quote:
Originally Posted by tkbieber Whether you trade this way or not,, it works thus far. Anyway, it's only until it gets to $2,000,000 than I'm cutting it off. 
You know at 3 losers in a row will wipe you out. So your strategy is to hope that doesn’t happen. There are no safeguards in place to stop it happening.
This is not a strategy, you are gambling. Your $2m relies on the fact that you will be lucky from now until you get the money. You have no idea on what the return is, how long it will take, how likely 3 losers in a row actually are in a year let alone up to the $2m.
This is basic information you need to research. Let’s say your system would have blown up once in the last 10 years (but you don’t know that because you haven’t done enough backtesting!) therefore we’ll say you have a 10% chance of wipeout in a year – if you trade it for 5 years then the chances of losing all your money is 40% before the time is up. Trade it for 10 years – it’s 65%. Would you trade a system for 10 years that you know only has a 35% chance of success?
But you don’t know. You don’t know how long £2m is going to take. You don’t know how likely you are to get there. What if you get to $1.5m in 3 years and you get the 3 losers – how sick will you feel then?
This is why people fail at trading. Their strategies are based on assumptions and hope, they ignore the risks and deluisionally believe they will be lucky.
You will only ever succeed when you’ve studied your strategy, understand the risks & rewards and have plans in place for worst case scenarios.
__________________
Hoggums

Outside of a dog, a book is a man's best friend,
inside of a dog, it's too dark to read.  G Marx.
