Dice Trading!

[Effkay]

Hi guys,

Those of you familiar with the "Would you trade coin toss?" thread, will have read my comment on trading dice. So this is exactly what I'm gonna do.

Rules:

1)Using two dice
2) One Dice gives you the entry for cable (the first throw), and the second one is for (eur/us).
3) 1,2 = short
4) 3,4 = No action
5) 5,6 = Long
6) Stop is half of the atr14
7) Take profits at atr14
8) only 1 trade per day maximum
9)Trades taken at midnight
10) Trades continue until stopped out on way or the other

Starts Monday!!!!!

As usual all comments/criticisms welcome!

 

[trendie]

re: ATR

are you using hourly charts, or daily, or what ?
ATR of which time-frame ?

Is your next thread going to be trading using radio-active decay to get the definitive random function

 

[Effkay]

He he!!

I just want to see if there is anything to TA!

Sorry I should have said...

Daily chart, daily ATR, starting midngiht, where the trades are taken,

So next trade to be taken on sunday midnight (UK time)

 

[Effkay]

ATR looking like it's gonna be round 180 pips for cable and 120ish for eur/us

 

[Roberto]

Is your next thread going to be trading using radio-active decay to get the definitive random function

Hope not, because I have already copyrighted that one and anyone who even dreams of publishing anything about it will be hearing forthwith from my solicitors (which is more than I ever bloody well do, now I come to think of it ...).

 

[Effkay]

Bloody hell mate.....I'll be steering clear of that one!

 

[Roberto]

Good move, mate ... best to steer well clear of these nasty radioactive isotopes anyway, IMHO

 

[Effkay]

Ok first trade to be taken on tonight,

eurus:

Short
stop: 60 pips
Take profit: 120 pips

GBPUS:

Short
stop: 90 pips
take profit: 180 pips

Trade taken at midnight (UK) and runs until stopped out.

Let's see how it goes

BTW the rolls were 2 and 1 respectively

 

[Effkay]

Entries 1.3073 and 1.8715

 

[Tuffty]

Effkay, I’m intrigued as to what you are doing as I don’t understand why you are doing it (assuming you are using real money). What is your goal or objective in what you are doing?

 

[Effkay]

My aim is to see whether or not it is possible to be profitable using random entry criteria and direction with sound money management. The point with this is that the mathematical expectation of this trading is positive, so over time this should be thoroughly profitable!

 

[Tuffty]

How did you calculate that the mathematical expectation is positive?

 

[Effkay]

call x the atr14

expectation = (0.5*x)-(0.5*(x/2)) = 0.5x

(I think it's something like that anyway!!!)

If that's not good enough I'll get back to you with a proper calculation

 

[Tuffty]

Um....that was quick. Going on instinct I think your expectation should be zero, and actually negative if you include dealing costs.

 

[Effkay]

why would expectation be 0?

 

[triax]

call x the atr14

expectation = (0.5*x)-(0.5*(x/2)) = 0.5x

(I think it's something like that anyway!!!)

If that's not good enough I'll get back to you with a proper calculation

You're assuming a move to your target will happen 50% of the time - but your target is twice as far away as your stop.

WIth your random entry the expectation, disregarding costs, would be :

(0.33 * x) - (0.667 * x/2) = 0

 

[Effkay]

ok so if I were to make the target 0.8x and the stop remained at 0.5x then the expectation would be positive?

 

[Effkay]

However what I have assumed by using ATR14 is that the market moves so much in one direction on a daily basis, and so target should be hit?

 

[Effkay]

Anyway the point is we can see where this goes...if it looks sh!t, we can look at it and change it etc.

 

[Effkay]

Both trades lost

so -60 on eur/us and -90 on gbpus

new trades

long eur/us and none on gbpus (4,3) 114 target, 57 stop