[B]I did some statistics this weekend…
(sell AUD/USD at the moment fully automated while I’m writing this post…haha)
There is also a chance you will not make any profits with following PipShip. (euhm, this sentence feels very negative… I’m trying to be down to earth…)
In the following message you can read the actual chances of succeeding with PipShip (calculated by using the TEST and LIVE performance)[/B]
Chance of not succeeding with PipShip; the risk vs return ratio…
It’s important not to hit the Abs Stop the first 6 months. (because then you will hit the -10% risk on original deposit) According to the TEST and LIVE performance of PipShip, we think the average time to hit the Abs Stop is about 3 years. (We made the prospect above with an average time of 3 years till hitting the stop) Then the chance to hit the Abs Stop is about 22% each year. (year 1: 78% traders still no hit, year 2: 0.78 – 0.22 x 0.78 x 100% = 61% traders still no hit, year 3: 0.61 – 0.22 x 0.61 x 100% = +/- 50% traders left)
Then by trading the first two trimesters (6 months) there still is a +/- 11% chance of not making profit with the PipShip Methodology the first time risking 10%. (0.11 + 0.11^2 + 0.11^3 + 0.11^4 … x 100% = 12%) Then we only look at the technical chance of success of the system itself. Of course a bad trading philosophy/greediness of the investor -> overtrading -> not succeeding, this chance is not included. The chance of a technical failure of the HA server of course also not included. (but Abs Stop guaranteed by broker)
Until now, we have not seen DD’s below 600 pips. The chance to hit the Abs Stop (-1000 pips) therefore could also be somewhat lower. It’s a speculative subject. Only by gathering more LIVE performance data, more accurate statements can be made. But still then, we cannot look into the future. There is always a chance of not making any profits with PipShip. (the risk of trading) There is only an oppertunistic chance on gaining profit the first time risking 10%. (about 88%)
Hit Stoploss during the first 6 month period? Bad luck? Exceptional Market Circumstances? Or a bad Signal Provider Strategy?
Trying a second time after loosing 10% (12% chance of hitting the Abs Stop the first 6 months), the technical chance of not succeeding is still 12%. (again same characteristics) But in total, the chance of gaining profit with PipShip is far higher. (1-0.12^2 x 100% = 98%) About 98% chance of gaining profit with PipShip risking 20%.
10% risk on deposit and having a chance of 88% success or… 20% risk on deposit before having a chance of 98% success?
A 88% successrate can still feel somewhat low. A successrate of 98% maybe is experienced as more convenient or peacefull. Traders with a minimum deposit of $2000,– are also able to use a minimum risk approach (5% each month) instead of a normal risk approach (10% each month).