Last week, a colleague introduced me to this “sure win trading strategy”. He described to me a method that sounds quite similar to my mom’s strategy.

Interestingly, it is the second time I heard it this month. A classmate mentioned it to me and said he thinks he can make 20% returns a month. When I heard these 2 guys declare the strategy will work, I was fascinated. Uncle Warren makes less than 30% annualized and you can make 20% a month! What’s the deal?

Profitable Strategy or Pseudo Science?

Here’s the strategy.

If a stock I buy goes down by R%, I sell to cut my losses. If it goes up by 2R%, I sell to lock in profits.

I know that randomly picking stocks that will go up or down is 50-50 proposition.

If I did this for 10 stocks, I will be correct 5 out of