Debunking Fantasy World Performance Simulations

By | January 17, 2016

Tradeciety has officially entered into the Guru land, selling a Forex course for $497. Just remember who Rolf, the main man behind Tradeciety, is: by his own admission in the comments to this article, in 2013 he was a struggling student who couldn’t afford a live account and therefore dabbled with demos. 4 years and no track-record later, he’s a successful trader ‘passionate about giving back’. LOL.

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Just stumbled upon an article today which left me wondering: was it written by a trader who was under the influence or by an internet marketer? Some people falsely believe that only flashy sites with photos/videos of expensive cars and wads of cash are the mark of an internet marketer. But it’s long been an established fact that stuffing a professionally designed website with trading related materials doesn’t necessarily mean you’re a trader. Think Sasha Evdakov, who at least was honest about this.

The article, How To Grow A Small Trading Account Into A Big One, was written by Rolf, the guy behind Tradeciety.com and Edgewonk.com.

We are presented with the above simulation, which considers a $250 account, a win rate of 60% and a risk/reward ratio of 1/1.2. These are called ‘relatively conservative statistics’. After 500 trades (approximately one year of trading) the simulated results range from $15k (60 times the initial amount) to $25k (100 times the initial amount). Again, these results were obtained by being conservative!

Then we’re shown with a rectangle on the graph and also told that:

For the first 300 trades, the account barely does anything and it grew very, very slowly

Actually, it grew at least 4-fold during the period in which those 300 trades were taken.

300 trades with very little account growth can be hard to deal with and most traders will never get to the right side of the performance simulation

Now, any trader worth the title would instantly realize these trade statistics have nothing in common with reality.

But Rolf goes on: readers are advised that if they add money to the account, even as little as $50 per month, they will witness a significant growth. Yes, in a fantasy world. In the real one though, you’d have to live to be 400 years old to get the compounding benefits of an extra $600/year in your trading account.

My general impression is that the article is irresponsible at best, and clickbait to sell the Edgework software at worst.

If you’re interested to read some serious stuff about performance simulation, do have a look at the following piece by Peter Brandt:
Random-Probability-Theory-Related-to-Trading-Systems

Update 18/01/2016

Today I noticed that a comment I sent on the article discussed here wasn’t approved. Moreover, I got blocked on Twitter by both @Tradeciety and @Edgewonk

Conclusion: this behavior strongly suggests that Rolf is in the internet marketing business. His goal is to put out as much content as possible, in order to attract traffic and sell products and services. If what he writes actually makes sense appears not to matter too much. I have no doubt that if I were to peruse some more of his content, I would find similar nonsense – a trader will always spot someone who’s faking it.

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