LitheInvestments'  Instablog

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Multi-contest winning Forex Trader looking to help the average Joe trader to avoid the traps of over trading and losing your shirt to the spread.
  • A Look Forward To 2014 0 comments
    Jan 4, 2014 6:01 PM | about stocks: AUDS

    I'm looking to experiment with a betting strategy known as the cancellation system. It involves going after a set amount of units.

    For example let's take 10 units and assume they each equate to 1% of the account:

    1 1 1 1 1 1 1 1 1 1

    We'll take the first and last 1's as the amount to risk on the trade. In this case 2%. If the trade/investment wins we will cross the two out, if not we will add them to the right (2 total) and repeat the process. See:

    If trade wins:

    1 1 1 1 1 1 1 1

    If trade loses:

    1 1 1 1 1 1 1 1 1 1 2

    Assuming the trade lost you would take the side #s 1 & 2 and add them and use that as the amount to risk (now 3%). It looks like a safe alternative to martingale and could take months to see the cycle through until it ends.

    It looks better for a day trader, but I can still incorporate this into my swing trading. My goal would be to get a full cycle of this in every quarter (4 cycles total) but it could be as many as 12 cycles!

    Good luck trading out there.

    Stocks: AUDS
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