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 Hmmmmm not sure I agree Pete. If you trade random entry and Target 10 ticks, stop ...

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Old Jul 21, 2012, 12:54pm   #21
x4x
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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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Old Jul 21, 2012, 1:09pm   #22
 
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Re: EASY-MONEY by cointoss

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Originally Posted by DionysusToast View Post

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.
On the contrary, it is obvious that it cannot be. Do you think that if he picked the entry, and had a random exit, he'd find it much harder to mimic the success he's had with random entry and strategic exit? I do.
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Old Jul 21, 2012, 1:28pm   #23
 
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Re: EASY-MONEY by cointoss

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Originally Posted by DionysusToast View Post

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.
However, an edge is nevertheless present.
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Old Jul 21, 2012, 1:33pm   #24
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Re: EASY-MONEY by cointoss

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Originally Posted by Shakone View Post
Do you think that if he picked the entry, and had a random exit, he'd find it much harder to mimic the success he's had with random entry and strategic exit? I do.
I was going to make exactly that point. I've never actually found an entry that had an edge sufficiently large enough to work with a random exit.
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Old Jul 21, 2012, 1:50pm   #25
 
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Re: EASY-MONEY by cointoss

'random entry and trailing stop' is gonna be the biggest thing here since Dantes 'Pin bars'. I just know it.
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Old Jul 21, 2012, 1:54pm   #26
 
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Re: EASY-MONEY by cointoss

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Originally Posted by x4x View Post
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.
OK

10 ticks profit
10 ticks stop loss

spread 2 ticks.

To get to your stop, you need an 8 tick move
To get to your target you need a 12 tick move

Your win rate on a random entry system would be 40%

You'd lose the spread.
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Old Jul 21, 2012, 1:57pm   #27
 
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Re: EASY-MONEY by cointoss

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Originally Posted by the hare View Post
I was going to make exactly that point. I've never actually found an entry that had an edge sufficiently large enough to work with a random exit.
Yeah - but imagine the excitement!
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Old Jul 21, 2012, 4:36pm   #28
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Re: EASY-MONEY by cointoss

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Originally Posted by piggybridges View Post
'random entry and trailing stop' is gonna be the biggest thing here since Dantes 'Pin bars'. I just know it.
You have to get a hell of a lot more creative than a trailing stop

I wonder how much productive time is actually WASTED by people testing this kind of garbage. Someone should hand Van Tharp a bloody bill for the damage he's done. He can expect a hoof in the plums from me should our paths ever cross
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Old Jul 21, 2012, 4:49pm   #29
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Re: EASY-MONEY by cointoss

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Originally Posted by DionysusToast View Post
OK

10 ticks profit
10 ticks stop loss

spread 2 ticks.

To get to your stop, you need an 8 tick move
To get to your target you need a 12 tick move

Your win rate on a random entry system would be 40%

You'd lose the spread.
OF course, the spread is a cost and will always be there no matter what strategy or what method you use - most liquid markets are only one spread, but whatever it is, it should easily be absorbed anyway.

It will happen, but not often that the market moves in your favour by exactly 11 points, or exactly 9 points against you, but I would guess that at least 95% of my winning trades runs on from where I close and run on from where I'm stopped by at least 2 points, if not a lot more.

A coin toss entry is a ridiculous idea any way - if the market in question is going in a clear identifiable direction, why toss a coin. It seems a lazy gamblers sort of strategy to me.
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Old Jul 21, 2012, 5:01pm   #30
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Re: EASY-MONEY by cointoss

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A coin toss entry is a ridiculous idea any way - if the market in question is going in a clear identifiable direction, why toss a coin. It seems a lazy gamblers sort of strategy to me.
Exactly.
If you trade discretionary, it is retarded to flip a coin.
It is a very useful excersise in trade management all the same.

Where a "coin toss" comes into its own is with automated trading.
Why?
Because automation is dumb f**k retarded, so random entry is often no worse,
or in most cases better than an apparently more complex entry strategy based
on loads of crap that works no better.
Its how and where you get out that decides your PnL...

Simon Kerr talks to David Harding - The Hedge Fund Journal
Go to the bottom of the above link.
Read the absolute last paragraph.
That may put randomness in perspective, then again it may not
The rest of the interview is quite interesting as well...
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