Even if you keep winning by luck, that could still be a fatal blow from just one loss... One day, surely there will come a day when you make a great comeback. - Navi+ - GogoJungle | Auto Trading - Market Analysis

We received questions from readers → This is the section that approaches the core part with answers.

For the early part of the question and the topic of building both a cyclic trading system and a cross-industry company, please refer to the previous article
【Everyone thinks the same, loses in the same way, and has come to this point now (・_・;)】

This time, we will touch on the essence of that

There, what I’m curious about is the method called Toro Rip or i-Loop.

It’s a system that repeatedly profits at fixed intervals without cutting losses.

What do you think about that? (How are you thinking about it?)

Personally, it seems like you could make money without complaints if prices stay in a constant range,but if the market continues in the opposite direction, you’ll have lots of positions and lots of unrealized losses.

And if you cut losses there, you’d incur huge losses.

If you have enormous funds, no matter how much it moves or how many positions you have, it generally fluctuates,so you’d likely continue to realize profits regularly, so profits would seem to increase.

However, it’s scary to think about how large the unrealized losses could be…

From a demo account at GMO Click Trade (Foreign Exchange Online), so far it has been steadily increasing profits.

The number of positions is small, and right now there are more profits than unrealized losses.

Is this a method that should be used with currencies that have high swap?

However, when considering swaps, it tends to favor buying (against JPY),

and if a currency like the Turkish lira drops cleanly, there’s nothing you can do.

So I’m wondering what you think about that?

We’ve been asked, but I already have my own answer, and I’ve also checked with veteran traders (the site administrator has long FX experience, though not very skilled)to get their opinions as a precaution.

In summary, if the range market continues, there would be no complaints and you’d likely profit, but if the market continues to run against you, unrealized losses would be abundant and cutting losses could cause enormous damage. …But you don’t know how large the unrealized losses could be, but currently you’re still making money, so you’re curious.

Yes, you’re exactly as the questioner imagines.
Whether it’s Toro Rip or i-Loop, since you don’t cut losses, unless you voluntarily cut losses or hit a margin call, you won’t incur realized losses. The win rate is close to 100%, and profits rise steadily. …However, with a bit of adverse movement, averaging in increases positions → eventually you can take profits, but if the adverse movement continues unilaterally, funds run out.

Since unrealized losses have swollen enough that funds could run out, if you cut losses the damage would be enormous, and the rate at which you cut could be at the bottom or the top (the most disadvantageous rate), and it’s not rare for a flawless-trading to lead to a wipeout.

…That said, if there weren’t that much of a reversal, you could win, and for most periods you’re winning and continuing to profit.

　　　　　　　　　
【From GMO Click Trade’s demo account, so far profits have been steadily accumulating.】

…But after watching for a year, studying for two years, now you’re ready to trade with real money→　

The unlucky personContinuing a reversal and injecting funds gradually → It was so smooth, but when I started there’s no way out anymore

The ordinary personAt first was doing well → but after several months there are quite a few unrealized losses, many averaging-in positions → but it recovered a lot, most unrealized losses were realized as profits and big gains appeared, wow → then again there are considerable unrealized losses, many averaging-in positions → but now is the time to endure, if these positions could be cleared at once, huge profits would come → unrealized losses swell further → forced to add funds and endure, if you endure this you can recoup all at once→ further adverse movement → funds for additional deposits are exhausted → a crash cut at margin call　

After a margin call, a quick rebound → if you had held a bit longer… there was still a balance to add funds, so why didn’t you… →If you had added funds to the end thinking that way, your funds would completely run out and wouldn’t stop

But if you’re lucky, you might win, right?
The period until a margin call becomes longer.
It could continue to profit for 1–2 years, maybe 3–4 years if even better…
But in the end, you will lose at some point.

Even if the investment amount is fixed and you withdraw all profits, the drawdown could be several tens of thousands of dollars over 3–4 years.
What’s more frightening is that if you get used to winning, profits get reinvested → this could wipe out all profits, or even damage the initial capital. After years of winning, you might not sleep well for a while…

If you’re lucky, you might be able to cash out, but it’s very difficult.　
When you’re winning and profits keep coming, can you end the system that keeps generating money and run?

Next time preview (Striving to challenge with Toro Rip-type methods without cutting losses)
Would you try a Toro Rip that only moves within a range using a currency pair?
Turkish lira continues to decline, so seems unwinnable, but what about other currencies?
The currency pair that is realistically suitable is this.
We plan to write about the end result of a Toro Rip system set up by a certain FX company for its own convenience.
I plan to write about it.

I made money with this site’s credit card issuance project

【The point site with the highest return ratePointIncome】

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