I wanted some feedback about a fixed fractional position sizing idea i've been toying with. It is similar to my casino method when playing blackjack.
Basically when playing blackjack, every time I lose I increase my bet. E.g- I bet $10; if I win the bet remains at $10, if I lose then the bet increases to $15 then $20 then $30 and so on until I win. The premise being that each time a loss is incurred, a win is more likely next hand. This is because the odds of the losing streak continuing are less than it breaking. Just like when you flip a coin; the outcome is either heads or tails, the statistics of such experiments show that larger streaks are a lot less common as numbers increase. The odds increase dramatically each time up (13 of one side in a row is the highest reasonably possible). The theory has worked well a couple of times now.
Now it is my intention to apply the same logic to forex trading. Basically using normal fixed fractional position sizing except that the position size is never decreased. The logic being that when a loss is incurred the most likely outcome next time out is a winner. The system im using has a 60-70% win rate so this makes it all the better, I believe. I wouldnt use it with systems with larger numbers of losers though as the drawdowns would likely be horrendous.
Anyways, if you had the energy to read through all my prattle, can I have some feedback? C'mon, one of you academic types has to have a major in statistics.