The infamous Mebs strategy

[lbranjord]

everyone remember mebds forum post where he never lost? Using the suicide stop loss he was able to win 90%+ of his trades. Then, we don't know for sure, but common sense would tell you that it fell apart and he took a few losses that wiped out the profits.

What if someone used a similar strategy, but vowed to withdraw half their account each time it reached a certain level. They could trade highly leveraged, and when they grow to a large amount they pull it out.

The risk would be losing the initial capital, but once the account hit the mark once, they would start the process over again.

Do you think this could be optimized to the point where someone could actually make it work? I think it is a terrible idea for the inexperienced, but for a veteran, it could be a great way to generate profit. They would need to control their greed and not want to aim for more money each time. That's the true danger in the system.

If I find a cool way to do it, I might demo this for fun.

 

[tomorton]

Hmmm......

Against all the rules I have ever heard of....... but that's not to say it can't work - anyway, rule-writers are a self-selecting bunch, and not necessarily the most successful amongst us - why would a vastly wealthy trader stick around to write rules like, 'Don't do this' and 'Don't do that'?

Thing is, if you make a 50% loss, you have to make a 100% profit to break even. If you make a 50% loss and withdraw half your remaining capital, you now have to make a 300% profit to break even.

A system that works so well that you must withdraw working capital (not profits) is on this downward spiral that medbs could not see. Its like the sytem developers who call themselves traders and come on here and say, if I make 2 profitable trades after 1 loser in the same day I will stop trading for the day. What the fairly heck are they talking about? Listen chaps, if you're confident your system makes 2 winners for every loser, making 6 trades is better than making 3, and making 12 is even better. Don't quit when you're ahead like a fluffing gambler would, get further ahead, be like a trader. Don't cut money out of a marginal system, get a better system.

lb - You're no novice on the other hand. Maybe it can work, interested to see your rules of engagement. But the principle of cutting capital to make more profits seems anti-whatsit to me.

 

[lbranjord]

Hmmm......

Against all the rules I have ever heard of....... but that's not to say it can't work - anyway, rule-writers are a self-selecting bunch, and not necessarily the most successful amongst us - why would a vastly wealthy trader stick around to write rules like, 'Don't do this' and 'Don't do that'?

Thing is, if you make a 50% loss, you have to make a 100% profit to break even. If you make a 50% loss and withdraw half your remaining capital, you now have to make a 300% profit to break even.

A system that works so well that you must withdraw working capital (not profits) is on this downward spiral that medbs could not see. Its like the sytem developers who call themselves traders and come on here and say, if I make 2 profitable trades after 1 loser in the same day I will stop trading for the day. What the fairly heck are they talking about? Listen chaps, if you're confident your system makes 2 winners for every loser, making 6 trades is better than making 3, and making 12 is even better. Don't quit when you're ahead like a fluffing gambler would, get further ahead, be like a trader. Don't cut money out of a marginal system, get a better system.

lb - You're no novice on the other hand. Maybe it can work, interested to see your rules of engagement. But the principle of cutting capital to make more profits seems anti-whatsit to me.

Thanks for the reply. I believe you are right, but I cannot rule the minimal chance that I could be right. I always get a rush out of attempting the "impossible". Luckily, I've enough sense not to try these type of things live. I hope every other T2W trader does too.

One important thing I've learned in my forex experience is that the market is efficient and it doesn't allow for these sort of loopholes. But I'm going after this one.

 

[tomorton]

Its always possible. If you have all your capital at risk, you cannot take a crazy risk. But with only a percentage of your capital at risk, you could do something fairly crazy several times - if one of them was a winner, it could pay for the yacht.

 

[shadowninja]

Isn't this what Epesteme is doing?

 

[lbranjord]

Isn't this what Epesteme is doing?

Well...it's what Tony Hayward is doing. Oh man...now I sound like a liberal.