Dice Trading!

[Effkay]

entry 1.3117

stop 1.3060
target 1.3231

 

[Tuffty]

Effkay, Are you assuming you still have a positive mathematical outcome and are you using real money?

 

[Effkay]

Yes I assume a postive expectation but I am not using real money

 

[Effkay]

Trade succesful +114pips

 

[Tuffty]

Effkay, That's OK then. If you were using real money I'd now start calling you a gambler as the calc given by triax the system (excl trading costs) has a zero expectation. If you change the target or stop the formula just needs changing too. I don't understand why you think it's a positive expectation.

 

[Effkay]

Because I dont think the chance of hitting the target is exactly half of the chance of hitting the stop, so I think the expectation is slightly positive!

 

[Tuffty]

OK so you think the market is not 'random' at that time of day hence the positive expectation. Fair enough.

 

[triax]

Because I dont think the chance of hitting the target is exactly half of the chance of hitting the stop

OK if the target was, within the context of your timeframe, some distance away (say 3 or more x ATR) and you were therefore using a hefty reward:risk ratio then you might be in with a shout - because you'd be relying on the 'fat tails' distribution of market returns which says that relatively big moves are more common than they would be if the market was random. It's a trade-management edge that has made pots of money for people in the past but requires super-human patience and, preferably, high volatility.

If you find yourself an entry that consistently makes money at a reward:risk of 1:1 (ie. is substantially better than random) and use good trade-management to put the icing on the cake THEN you'd have a system with an edge......though it would be a lot easier to continue rolling them dice.

Good luck.