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- Mar 3, 2013
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If you want to be profitable, just trade a martingale system. You will be profitable everyday, until the day you are wiped out. If you want to lose $25 every day, trade an anti-martingale system. You'll lose money everyday, until the day you win big. These systems are really just mean-revision (martingale) and trend-following (anti-martingale). It all comes down to the same question, do you think the market is going to continue doing what it has been doing, or do you believe it is going to do something different. All trading comes down to that question, and no one knows the answer. Even the guys at LTCM (3 years of 40% annual returns), who thought they had a foolproof system, got wiped out. Their bet was that a bunch of uncorrelated markets would never all go against them simultaneously, which is exactly what they did. It is rare for a trader to have an edge, but without one they are just hoping to get lucky. Know what your edge is. Actually, I'll tell you what one of them is - the option to not participate. As an amateur, you can do something the pros cannot, you can get completely out of the market. Look for a method that incorporates that advantage, otherwise you are giving up your one definite advantage. An example of this would be, simply not trading before major news, or maybe only trading when there is major news. The odds are greatly stacked against you in Forex, and I wouldn't suggest people trade it, but there are ways to increase your chances.
http://www.investopedia.com/articles/forex/06/martingale.asp
http://www.investopedia.com/terms/a/antimartingale.asp
https://en.wikipedia.org/wiki/Long-Term_Capital_Management
https://www.youtube.com/user/myobcom (only trades news)
https://www.youtube.com/user/CaptainCurrency (never trades news)
http://www.investopedia.com/articles/forex/06/martingale.asp
http://www.investopedia.com/terms/a/antimartingale.asp
https://en.wikipedia.org/wiki/Long-Term_Capital_Management
https://www.youtube.com/user/myobcom (only trades news)
https://www.youtube.com/user/CaptainCurrency (never trades news)
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