Money Management Experiment

[gazuz]

So I remember finding this a while ago and ignoring it because it didn't work.. Now I got an email from a friend of mine that is a forex broker and found it quite interesting. Maybe we can have a little "post your results"?

Lets see now from what I can tell this is pretty accurate to the foreign exchange. Just by using the MACD or any other type of moving average we can almost guarantee a 60% success rate. The program works like this:

A coin flip with a 60:40 winning ratio, you start with an equity of $10,000. In the position size you put how much you want to bet (we can also think of it as how many lots to trade per whatever take profit)

What you do is run the program I attached (you will need Excel) and in the "Position Size" enter the bet amount and press enter. After every trade it will tell you if you won or not, and apply it to the chart on the right hand side.

If anyone doesn't understand I will gladly make a walk-through for this, the credit goes to Mechanical Trading Systems - Money Management where I got the program from.

I will post some of my results in the next post..

NOTE: YOU WILL NEED EXCEL TO MAKE THIS WORK! IF IT DOES NOT WORK PLEASE CLICK ON TOOLS -> MACROS -> SECURITY -> MEDIUM AND REOPEN THE FILE

THE EXPERIMENT

To save your results please click on the "RESULTS" tab at the bottom of your screen. Copy the "Short Report" at the bottom of that page and paste it here on the forums

ENJOY!

[gazuz]

Short Report:

Thanks a lot for performing this Money Management Experiment (process took 6.6 minutes).· You have won (Profit: 55,600)!· You have turned your Equity from initially 10,000 to 65,600 (+556%).· Your Number of Profits in % (win ratio=65%) is quite close to the preset probability of winning (60%). --> The law of averrages worked.· Your Average Position Size in % of Current Equity (11%) is much too high. But: your Maximum Position Size in % of Current Equity was 34% whicch is much too high. Many traders and even more gamblers lose because their Position Sizes are too high.

[Scorpion]

I was going to test this yesterday, but the Excel sheet contains VBA Macro. It's extremely dangerous to allow vba macro to run in your computer, because it's allowed to format your hard drive, download viruses, install spyware, etc. Quite fishy too when VBA Macro is password-protected.

I'm going to crack the password first then analyze the MM behind the scene.

[Scorpion]

But anyway, how does this MM work?

[gazuz]

its basically just a coinflip game. I just like it because it keeps track of evrything in a chart and in a log file. I don't think its anything dangerous though at least not for this macro.