Probabilistic approach

It's heard on the street, that...

• You can double your money with almost no risk in less than a year.
• You think, we are pulling your leg? Not at all.
• You think, it takes some special skills and long experience? It does not either.
• You think we count on luck? Not at all.

Consider perfectly realistic numbers.

Let's assume, that you are a trader with a little market experience on FOREX. It's clear that in general you will have 50% chance to guess a rate trend (up or down) correctly with no analysis. Imagine that your knowledge and skills would improve your chances by mere 5%, that you would guess the trends correctly in 55% rather than 50% of all cases.

Furthermore. You've deposited $10,000 in your account and are ready to invest up to 15% of this amount in trading each month, while limiting your risk to 5% of the total deposit. To put it differently, you would limit your losses to $1,500 a month, but not more than $500 on each transaction.

To double your investment, you would have to win $10.000:12=$833 each month. Let's assume that each point's worth is $6. Then each month you would have to gain $833:$6=140 points. It should be noted that rates usually move 50 – 100 points a day, thus, taking on average 75 points õ 20 days = 1500 points a month, of which you would have to pick up only 1/10.

Let's consider your chances now.

If your experience, as we have previously agreed, allows you to win in 55% (i.e. 50%+5%) of all cases, the losses on one transaction are stopped at $500 and the loss limit each month is $1,500, then the probability to win an amount allowing to double the initial deposit approaches 88% (the doubting may easily recon the odds of losing in one month as the probability of losing three consecutive bets, that is 0.45x0.45x0.45 plus the probability of two consecutive losses, one win and two losses again, plus the small probabilities of longer chains). To achieve this end, you would have to execute about 240 transactions on average, that is 20 transactions a month.

It should be borne in mind, that as your account would grow, the limit of your losses (5%) would grow too along with the growth of your income. At this rate, the $20,000 level would be achieved in approximately 9.5 months.

You could reduce the number of required transactios in two ways: by improving your skills, and/or by taking larger risks.

If your experience would allow to transact profitably in 60% of the cases, then you would only need 170 transactions to double your account. By the way, the probability of success would increase to 99% in this case.

If you would increase your loss tolerance to 10% from 5%, the number of required transactions would drop from 240 to 80, that is you could double your account in 4 months, with a lower probability of 77% instead of 88%, though.

Which of these ways to take is up to you. We wish you luck and success that will not hurt any strategy.