EASY-MONEY by cointoss

This is a discussion on EASY-MONEY by cointoss within the Trading Journals forums, part of the Reception category; Originally Posted by DionysusToast What you will learn with random entry is the impact the spread has on trading. correct. ...

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Old Jul 20, 2012, 7:00pm   #15
 
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Re: EASY-MONEY by cointoss

Quote:
Originally Posted by DionysusToast View Post

What you will learn with random entry is the impact the spread has on trading.
correct.

Now You've let the 'cat' out of the bag.
Anyone dissapointed???
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Old Jul 20, 2012, 7:09pm   #16
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Re: EASY-MONEY by cointoss

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Originally Posted by DionysusToast View Post
Can't do it on 'the zoo' ?

So have to go to city bulls with the other to$$ers?

What you will learn with random entry is the impact the spread has on trading.
Only if you are a short term trader. How much impact does the spread have on a position trader holding for 1000 pips and maybe only take 3-4 trades a year?

Peter
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Old Jul 21, 2012, 1:26am   #17
 
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Re: EASY-MONEY by cointoss

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Originally Posted by wackypete2 View Post
Only if you are a short term trader. How much impact does the spread have on a position trader holding for 1000 pips and maybe only take 3-4 trades a year?

Peter
Well - if you are a ******, it has the same effect of the green on the roulette in a casino. The toss had no edge and so over time - even with 1000 pip target (which you will hit as often as you will lose), you will lose the spread. It'd be like that little river that carved out the Grand Canyon.

There's a random entry case well discussed on the forums. What was it - enter at random & trail the stop, right? This will make money - but only in a market that trends more often that it doesn't. The 'bet' effectively moves from choosing direction to betting on an overall premise that the market trends more often than it doesn't.

You are still betting on certain conditions existing in the market just that it 'appears' random. Nothing wrong with it but it is not proof of randomness making money, just proof of trends making money if you trade a trend following system.
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Old Jul 21, 2012, 2:02am   #18
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Re: EASY-MONEY by cointoss

Yes, of course the spread will always be a negative percentage against you. But if you are taking trades with 50 pips TP/SL, or less, then you'd be concerned whether the spread is 1 pip or 3 pips because it makes a huge difference in the negative expectation in percentage terms. However if you routinely take 1000 TP/SL trades then certainly a 1 pip or 3 pip spread should not really be a concern.

I would expect if you trade a completely random entry system with a 10 pip TP/SL you could never win. The spread is just too large to overcome. Same system with much larger targets would give a better chance at coming out ahead.

Peter
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Old Jul 21, 2012, 8:20am   #19
 
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Re: EASY-MONEY by cointoss

Hmmmmm not sure I agree Pete.

If you trade random entry and

Target 10 ticks, stop 10 ticks - you breakeven MINUS the spread
Target 100 ticks, stop 10 ticks - you breakeven MINUS the spread
Target 48848920 ticks, stop 100 ticks - you breakeven MINUS the spread
Target 1ticks, stop 100000 ticks - you breakeven MINUS the spread

Doesn't matter how you change it - you will still breakeven on the trades but lose the spread on top.

If you change to a trailing stop, then what happens is you will make money if the market mostly trends. Although not quite that simple (you need to be aligned with the overall volatility), the trailing stop makes it a trend following system.

I think The Hare has already fessed up on what his to$$ing involves to an extent. I think when he says random entry, a lot of people presume he has an equally unsophisticated exit strategy. I would doubt that because he's already been in discussions here about the feeling of being 'engaged' to the market and how you somehow feel more able to read the action once in a trade.

Still - he's not willing to feed the monkeys right now, although he may have to do that as penance when the RSPCA turn up at his house about those bagged cats.
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Old Jul 21, 2012, 9:48am   #20
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Re: EASY-MONEY by cointoss

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Originally Posted by DionysusToast View Post
I think when he says random entry, a lot of people presume he has an equally unsophisticated exit strategy..
They would be very wrong
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Old Jul 21, 2012, 12:54pm   #21
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Re: EASY-MONEY by cointoss

Quote:
Originally Posted by DionysusToast View Post
Hmmmmm not sure I agree Pete.

If you trade random entry and

Target 10 ticks, stop 10 ticks - you breakeven MINUS the spread
Target 100 ticks, stop 10 ticks - you breakeven MINUS the spread
Target 48848920 ticks, stop 100 ticks - you breakeven MINUS the spread
Target 1ticks, stop 100000 ticks - you breakeven MINUS the spread

Doesn't matter how you change it - you will still breakeven on the trades but lose the spread on top.

If you change to a trailing stop, then what happens is you will make money if the market mostly trends. Although not quite that simple (you need to be aligned with the overall volatility), the trailing stop makes it a trend following system.

I think The Hare has already fessed up on what his to$$ing involves to an extent. I think when he says random entry, a lot of people presume he has an equally unsophisticated exit strategy. I would doubt that because he's already been in discussions here about the feeling of being 'engaged' to the market and how you somehow feel more able to read the action once in a trade.

Still - he's not willing to feed the monkeys right now, although he may have to do that as penance when the RSPCA turn up at his house about those bagged cats.
If someone's PROFIT target is 10 ticks, then that includes the spread.

If their LOSS is 10 ticks then it includes the spread.

What's all this plus and minus the spread - if the spread wasn't included it wouldn't be 10 ticks profit, would it.
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