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Let's say I have a strategy where I take 2 trades at the same time every day. With 1:1 risk to reward ratio, and the strategy works 60% of the time.

Let's say I share my picks every day with 10, 20, 100, 500 people and they all take the same trades around the same time. It's all fun and good when we're trading microlots, but what if we're all trading 100 lots? Or 1,000? Could that actually change the market? Obviously, this will depend on the pair, but let's say I'm trading the EUR/USD and USD/JPY.

Am I completely foolish in even asking?

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  • I can't vouch for the validity of the comment, but someone I found claimed to trade 50,000 lots, which apparently doesn't move the EUR/USD market during normal market hours.
    – Christian
    May 6, 2017 at 14:55

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Let's say I have a strategy where I take 2 trades at the same time every >day. With 1:1 risk to reward ratio, and the strategy works 60% of the time.

Out of 100 trades, it is just almost impossible to success 60 trades, it is gonna be much less than 60, it is a fact. And having a 1:1 RRW, even though you achieve 50 trades out of 100, it will be a break even if you are lucky enough, so as it is mentioned before you will loose money. The suggestion is to increase RRW ratio, because anyway having over 50% successful trades is a work of a hero. I do not say it is not possible, but obviously you are on the wrong way by setting such RRW and success rate.

Let's say I share my picks every day with 10, 20, 100, 500 people and they all take the same trades around the same time. It's all fun and good when we're trading microlots,but what if we're all trading 100 lots? Or 1,000? Could that actually change the market? Obviously, this will depend on the pair, but let's say I'm trading the EUR/USD and USD/JPY.

No single person or persons in the world are able to affect the trade direction, so it is not a problem.

Am I completely foolish in even asking?

No, you are not.

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The FX market is the most liquid market, especially the EUR/USD, so no trades you and some 100 or so followers do will move that market.

A bigger concern is your 1:1 reward to risk with only 60% anticipated success rate, you will definitely loose money with this system. A small change in your success rate with a number of consecutive losses and you will be making losses. You need a much larger reward to risk ratio to be successful.

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    1:1 on 60% win rate is excellent on a large number of trades. Most money is made taking constant, controlled losses.
    – misantroop
    May 7, 2017 at 6:36
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    Are you kidding? In standard Roulette, if you bet on black, it's even money but the house wins about 53% of the time. Are you saying casinos will definitely lose money with standard Roulette and people betting on black? That's insane -- they reliably make money.
    – David Schwartz
    May 7, 2017 at 19:14
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    @Victor If you get a 60% success rate and your average win and average loss are equal, it's precisely equal to the roulette, just way better than the casinos get. And they make money reliably. If you think it's different, explain a relevant difference. You cannot do it. (Of course, no forex trader reliably wins 60% of the time and has an average gain equal to his average loss. That would be utterly amazing. You'd be a billionaire in a few years.)
    – David Schwartz
    May 8, 2017 at 4:06
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    Victor, the whole discussion is based on the theoretical 60% win rate 1:1 ratio, so what are you actually talking about? You only introduce your subjectivity into the topic. My long-term results are around 60% with 1:1 for the record, many of the things I trade are liquidity constrained and that's why you won't ever see me featured in Forbes.
    – misantroop
    May 8, 2017 at 5:40
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    Yes, you are making excuses. Firstly I don't know why anyone in their right mind would trady something with liquidity constraints. One of the most important things to do in trading is to have a system that is not too rigid and bound by too many constraints that you hardly ever get any signals to trade. Secondly, if you are telling me you don't get enough trades to make consitant money with your 60% and 1:1 system, then you haven't really had enough trades to give you a good measure of your success rate and your RTR. How many trades have you actually had?
    – Victor
    May 8, 2017 at 23:49

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