A major loss

Yesterday I was on my computer and I visited a thread on this forum which has gone very quiet for the past 2 weeks or so. It belongs to a team of 2 admins who started this program to invest people's money through the method of scientific/mathematical/logical betting.

The basic idea was to increase one's bet after losing the previous round. The increase would be sufficient to provide for the profit of the current and all previous rounds of failed betting. Well, I must say I ever heard of this approach used in other gambling or chance games like poker and blackjack. If I am not mistaken, Firman and I also thought of applying it to Forex, applying double of the previous trade in the opposing direction. I don't quite know why we chose to abandon that method. Maybe because it simply was too risky compared to putting in a Stoploss level. And the trade amount might get really huge given a few earlier losses. To give you an idea, we could start with 1% of our trade capital, loss it for the subsequent few rounds and use up to 2, 4, 8, 16 and even 32% if our capital. And that still doesn't guarantee one can have a successful trade.

Rather, why not invest time and maybe money to find and design a system which can historically prove its effectiveness? Well, pretty tough and quite a hassle. Which is why I'm meddling with the idea of hiring a researcher to get me some info.

Maybe I could get some help during my uni days.

Anyway, a few of my friends are coming up with interesting, albeit not so fresh, ideas. One is to set up a Forex brokerage firm. The key selling idea is to make it local, approved by MAS with low pips spread to benefit short term traders.

The other comes from Louis and gang. I met him during my NS stint in Nee Soon Camp. Currently doing a accounting programme, Louis has hopes of establishing an investment firm to save on taxes on capital gains from equities trading. Currently our team's just Louis, Aloysius and me. But we're still looking to pool the expertise and financial ability of a few more investors to make a winning team.

Well, my basic proposal is to send at least one of us for a good course for a few thousand bucks so that we can better manage our funds which should hit some 30-50k. But then again, I really wonder what's going to happen from here on. I don't even suppose I can afford the initial that they hope to get from each investor. But probably that's no problem because I would be involved in live Forex trading the start of 2008.

Which only means I have to work harder now to find my preferred (and preferably winning) approach. Ok, time to do more studies. Next up would be to document the potential of using indicators to decide on trades. I realised from my experiment with parabolic SAR dots that they respond fast enough to reversals at the entry level, but lag when telling one of when to take profit. And it seems stachostics will help.

Have a great trading week ahead, mates!