#### Grey1

##### Senior member

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Can he become a millionaire and ask Miss ZET JONES out ?

A) yes it is mathematically possible to achieve that..? ( please explain how )

B) No he can't ..

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Can he become a millionaire and ask Miss ZET JONES out ?

A) yes it is mathematically possible to achieve that..? ( please explain how )

B) No he can't ..

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The answer is A - although it worries me that you might have been watching Joe Millionaire on E4 (what's worse is that I watched it )

A 40% success rate is fine with a high AVGWin / AVGLoss ratio.

Say the ratio is 3:1

Over 10 trades the profit would be +6 = 4 (out of 10) times 3 - 6 (out of 10) times 1

As this is a profitable strategy you can make the million if you have enough time or money. He hasn't the money, which means he needs time based on a 3:1 R/R ratio

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With £10,000 you cannot pattern day trade

With a 40% strike rate he is highly likely to have 10 consecutive losing trades in succession.

Using classic money management strategy risking a max of 2%, that limits him to losing a maximum of £200 per trade which means trading in stocks with low value which are less likely to move much during the trading day.

He can of course ask out Miss Zeta Jones but she doesnt have to accept and is already married to Gordon Gekko anyway so why would she want to.

Paul

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My question is if I take a coin ( 50/50 far better than joes strategy ) trade head long tail short and setting my stop @ 1% below entry and taking profit @ 3% above entry ( Reward/Risk 3:1) , then I MUST BE ABLE TO MAKE MY 10 MILLION.... Am I right ?

PS:- FTSE you was spot on by the way ...

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Donot forget I am not playing roulette to be paid Equal amount..( Black / Red.. Even chances Even pay outs ) Joe is a stock trader who can wait and take profit 3 time more than his risk with his 50/50 system ..

Hope this clears things for you ... ( remember Joe can mathematically win if his system is only 40 % successful provided he takes three times more profit than his risk level as FTSEBEATER said )

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mmm well ok define the rules of 50/50 of what. If your coin toss

system has a 50/50 of winning 3% or losing 3% and you are

going to cut your loss to 1% each time then you will add to your

treasure chest.

However, if it is only 50/50 that the stock will move up or down

then that's different since it will far more often reach the 1%

down than the 3% up (all those 2% ups pulling back to 1% down

for example)

jon

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Trader333 said:With £10,000 you cannot pattern day trade

********

He can of course ask out Miss Zeta Jones but she doesnt have to accept and is already married to Gordon Gekko anyway so why would she want to.

Paul

Hi Paul

Finally after something like 1000 posts, I've managed to find something wrong with something you've written :cheesy:

You don't need a PDT account to trade stocks. Maybe Joe is trading UK stocks or stock futures or holding US stocks overnight

With regards just asking Miss Zeta Jones out - far too easy and where's the fun in that.

<hr>

Hi Grey1

Barjon is right. It's because if you toss a coin for your entry, that doesn't guarantee a 3:1 Risk / Reward ratio. The price could go up 2 and fall back 3 and take the stop out.

If you tossed a coin for the entry and use your exit rules. The %win would go down to 33%, which would mean break-even in money terms.

If that makes sense

<hr>

Hi Barjon

Snap

You lose by gambling long/short before the coin is tossed.

Brings to mind my favourite saying- let the DOW show it's hand before you place your bet. :cheesy:

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Quote " if you toss a coin for your entry, that doesn't guarantee a 3:1 Risk / Reward ratio. "

No it does not but Joe is not forced to close his postion either.. So he can wait to take profit more than his risk level multplied by 3..

The 50/50 system is exactly the same as the 40 /60 system that we both agreed it would mathematically make Joe a millionaier.. Nothing has changed except that I am offering a better system than Joes.. A system which performs by 10% more.. A COIN STRATEGY

Hope this explains it

Very simple but the knowedge of such questions could change one's trading attitude to risk analysis..

Capital = £10,000

Losing Trades = 7

Winning Trades = 13

Trades = 20

Loss on losing trades = 7.5%

Gain on winnng trades = 50%

Profit = £1,127,661

Spare Change = £127,661

Before costs and slippage, but you’ll get the idea!

Anyone got Catherine's phone number?

Cheers

Mayfly

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Joe has a strategy which is only right 50 % of the time.

He goes LONG head Short TAIL .. THIS IS HIS strategy

His stop loss is 1% ( risk ) his exit (reward is 3%.. So he has a 3to 1 reward/Risk

Can this guy mathematically become a Millionaire? ( We all agreed he could if his strategy was 40% right so why a better strategy of 50% should not make him a millionaire ?)

Barjon ,

No he does not hold his postion .. as soon as he is down by 1% his stoploss kicks in and he loses the trade..

Joe's profit averages out to 1% per trade. He gains 3% half the time and loses 1% the other half. 3/2 - 1/2 = 1.

A quick compound interest calculation in Excel tells me he will be a millionaire after 463 trades, and amazingly, he'll be a billionaire after only 1158 trades.

One thought that occurs is that the probability of the market moving either way must be multiplied by the probability of the coin toss correctly predicting this movement. Due to this I don't think tossing a coin would actually give a 50% success rate.

A quick compound interest calculation in Excel tells me he will be a millionaire after 463 trades, and amazingly, he'll be a billionaire after only 1158 trades.

One thought that occurs is that the probability of the market moving either way must be multiplied by the probability of the coin toss correctly predicting this movement. Due to this I don't think tossing a coin would actually give a 50% success rate.

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Moog ,,

Quote "A quick compound interest calculation in Excel tells me he will be a millionaire after 463 trades, and amazingly, he'll be a billionaire after only 1158 trades. "

You are spot on .. ( I have enclosed a simulation run of the above QUIZ on EXCEL .. After 100 trades Joe,s capital grows by 5 times .. )

So after all coin tossing is not a bad idea... Maths does not lie..

So why donot we all drop our analysis and use the "La Coin, de Toss up " system and become profitable trader then ?

I WILL EXPLAIN WHY later

Quote "A quick compound interest calculation in Excel tells me he will be a millionaire after 463 trades, and amazingly, he'll be a billionaire after only 1158 trades. "

You are spot on .. ( I have enclosed a simulation run of the above QUIZ on EXCEL .. After 100 trades Joe,s capital grows by 5 times .. )

So after all coin tossing is not a bad idea... Maths does not lie..

So why donot we all drop our analysis and use the "La Coin, de Toss up " system and become profitable trader then ?

I WILL EXPLAIN WHY later

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methinks you play with us

you consistently ignore the fact that your opening position

is three times more likely to reach its loss target (1%)

than its winning target (3%)

me? £1000 will do and a date with Jane Goody so I'll send you

a tenner which you can add in proportion to your positions on

your way to becoming (again?) a millionaire and you can send me

back £900 in a few months (that's £100 for your trouble)

jon

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