The Concept

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Compound interest is the eighth wonder of the world.
He who understands it, earns it ...
he who doesn't ... pays it.

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Albert Einstein

 

 

The concept of   The Experiment  is to see how far in reality this truism of Albert Einstein can be pushed in the global financial markets. The  L.I.V.E.T.M.  setups and approach, which has been used since the 1980's, are the foundation for The Experiment, coupled with some Campaign and Money Management twists.

The Experiment is far far more than just buy and sell, long and short. It is as much about the various operators (traders) as it is about the financial results or even about the rule-set ... it is about having 'skin in the game' and yet still being detached from the outcome ...  it is about matching a rule-set with an operator and their lifestyle ...  it is about finding one's strengths and weaknesses and working on both ...  it is about focus, discipline, patience and accountability.  And yes, it is also about campaign and market selection, precision timing, sizing of positions, consistency ... and more!

It is ...  a Journey like few others.

A non-conventional approach to compounding will be applied as the traditional concept is not valid when it comes to our rule-sets.  In fact, it may not even be all that beneficial to your system or to many other trading approaches. This is a great example of a mantra that is not examined before repeating it. Not dissimilar to the 'never risk more than 1 - 2% of your account' one.

Most things that are repeated often enough by enough people become accepted as valid!

One reason for choosing the CFD markets is their liquidity which means that trading will be less limited by the size of the orders than in other markets such as the futures market.  Another important reason is that the position sizes are very scaleable which means that we will be able to harness the awesome power of compound far more efficiently.  This does make a notable difference to the end result over 100's of campaigns.

Real money      Real trading        Real time      Real results

You will be able to follow our progress for the duration of  The Experiment  on Twitter @Patterns_YKW.  You will get to experience some of the highs and lows of the different operators applying the various rule-sets as well as being able to see their screens as they see them in real time.

Seeing all results will be quoted as an R factor you will be able to calculate what impact the campaigns would have on your own trading account, irrespective of whether it is 10,000 or 100,000 (name your own currency).

Along the way we will be examining some of the many accepted beliefs about markets and their movements to see if they are in fact valid or just a myth. Some of these include:

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  • Needing a strike rate of more than 50% to end up with a positive result
  • Risking no more than 1 - 2% of your account may not be valid
  • Decreasing the bet size when going into a drawdown actually is beneficial
  • The trend is your friend
  • Speculation is a suckers game
  • ... and much more.

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This is as much a journey for ourselves as it is for you.  Destination unknown. What is known is that  The Experiment  will only go on for a limited time, irrespective of the results!  This is in recognition that in life, for life, there must be a point where 'enough is enough' at both ends of the spectrum.

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Give me a fish and I smile,

Teach me to fish and my family smiles!

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Come and join the fun!

Cemel Dosce - Know Thyself

The Team and

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PS.  Just in case you have not done the maths on compounding, then please
ponder  these numbers!

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Just 1R a day = about 10 x increase in your account after 1 year ...
2R a day = about 100 x after 1 year ... and 3R you can work out for yourself!

You set the value of R.