A clever person once said, “Doing the same thing over and over again and expecting a different outcome is pretty much insane.” We’ll see whether this trend can be adapted to our experiment participants. Let’s review the results of the third week:
1) Participants still have their initial 200 EUR investments. However, the participant X finally met the consequences of his chaotic trading strategy. You cannot get along with excellent results, if you risk more than 80% of your capital. GBPUSD order was closed with a loss of 200.46 EUR. The total available investment currently is 123.48 EUR. According to the same participant, it was a hit below the belt, which greatly reduced his confidence. Although, it was only the second unsuccessful trade in the currency markets, but the loss surpassed expectations…
2) The participant Y has increased his capital and now has 247.6 EUR. His investment strategy increased portfolio by 18.8%. However, one GBPUSD order has not been closed yet. Participant Y still expects positive changes in the trend. Unlike the participant X, participant Y risked only 4% of his capital. The usage of big leverages in most cases leads to huge drawdown or even bankruptcy.
3) Nevertheless, participant Y has three times used bigger leverage than it was planned in the beginning of the experiment. Although, the risk has been rewarded, let’s hope this will not become a habit or an investing tool.
Both experiment participants still have not lost their investments, but week two ended with two open positions. Open GBPUSD position for participant X could “help” to completely lose his investment. If GBPUSD currency exchange rate will continue to move down, the fourth week may be the last for the participant X.
To be continued…
