spanish89...

[Mr. Charts]

Oh come on arabian, don't go all shy on us.
Is he for real?
Did he snort coke between mouthfulls?
Was it only an hour 'cos everybody fled in horror or was he arrested by CO19 and charged with having sex with underage girls or eBay fraud or trying to obtain a loan of £19,000 intending not to repay it or stealing electricity from his next door neighbour any of the other crimes he's admitted to?
Did he cadge a lift to get there or back to Addlestone?
Big shot oil "trader" still trying to get housing benefit?

 

[timsk]

Who is Spanish89 and why does everybody hate him?

He's an ex-member of T2W - now banned - and infamous for the introduction of what have come to be known as 'Spanish stops'. These are stops that are so wide that you're likely to have blown your entire account before they're hit. See the post above by Mr. Charts for added insight into his somewhat flawed character.
Tim.

 

[Lightning McQueen]

Also Tim, his thread over at ET has spawned other trading catch phrases.

fannish89 - a rather amusing name change by bigtool to describe s89's abandonment of super wide stops in favour of tighter ones, which has subsequently spawned the term fannish squeeze.

fannish89 not something that can be quoted directly on here due to the post content :whistling

fannish squeeze when prices are moving perilously against the trade from the start due to holding an opinion that is incorrect.

 

[Mr. Charts]

Like the Spanish Steps in Rome, it's not too hard going up, but it's a long and damaging way if you fall down and you take a bath at the bottom. Lots of people are looking forward to the inevitable big splash.
It's not even malicious, it's just a wish to see justice done.

 

[arabianights]

I have a photo to upload on Monday

 

[Mr. Charts]

I think we had plenty of piccies of him that he uploaded himself..........

 

[shadowninja]

Also Tim, his thread over at ET has spawned other trading catch phrases.

fannish89 - a rather amusing name change by bigtool to describe s89's abandonment of super wide stops in favour of tighter ones, which has subsequently spawned the term fannish squeeze.

I think I've just worked out who bigtool is.

 

[FXSCALPER2]

Possibly, but it doesn't take too long before their "luck" outs and then they get chopped.
You need one helluva lot of monkeys and a very long time before one writes the complete works of Shakespeare.

Of course not. Most successful traders are probably just lucky. The following is an extract from a book by Curtis Faith, one of Richard Dennis's "Turtles":

"When one starts to use performance measures to separate a group of funds into the good ones and the underperforming ones, one is very likely to encounter random effects. The reason for that is that there are more lucky average traders than unlucky good traders. Consider a unieverse of 1,000 traders in which perhaps 5 or 6 are truly excellent traders. If 80% of the 1,000 are close to average traders, there are only 5 or 6 traders who have an opportunity to get unlucky, but there are 800 with the opportunity to get lucky. If 2% of the traders get lucky enough to have a good track record for 10 years...this means that there is a group of 21 traders with excellent performance, only one quarter of whom are axcellent traders. "

That seems obvious to me for some reason.

 

[Skill Leverage]

Anyone who believes in the concept of luck as some nysterious force in all of our lives is an idiot, plain and simple. 'Luck' as a notion exists purely because human beings are reluctant to blame themselves for their own failures.

If a coin is being flipped 10,000 times, at some point you will likely see 10 heads in a row. If you are offered 2:1 on your money to guess correctly, an intelligent gambler will make money, a foolish one will not. Why? Because the skilled gambler knows that he is likely to see runs of 10 or more heads/tails, and thus bets an amount of his bankroll so that he can withstand an adverse run early on and still be in the game; he bets $2 a spin out of $1000, each time betting on the same outcome, and makes a steady, (almost) guaranteed profit over time.

Now, someone else comes along with $100 and bets $10 a spin on heads. He happens to join the game at a point where 10 tails are shown in a row, and loses all his money. Is this man 'unluckier' than the man above? The man above made his own luck, through understanding of the probabilities of the game, and intelligent execution of his strategy.

This is a simple example, obviously trading is more complex, thus there are other factors than bankroll management to worry about. It does illustrate I hope that luck is just a crutch for people who either can't handle, or don't understand, probability. There really is no debate, the very fact that professional traders/gamblers/poker players exist proves this. Unless you happen to think they are all just 'lucky', and touched by some magical hand that guides them through life. If you believe that, well, you're better off getting a different job.

 

[Skill Leverage]

To quote a legendary poker player and gambler:

'Luck's just the door. You've got to come in through the window - that's where the skill comes in.'

 

[stevespray]

he bets $2 a spin out of $1000, each time betting on the same outcome, and makes a steady, (almost) guaranteed profit over time.

This isn't so. Regardless of the fact that the gambler knows that a run of 10 winning spins will occur he or she cannot impliment a staking plan to take adantage of this. Your described scenario has a completely 'zero sum' expectation - 50/50 chance of a head or a tail with a 2:1 pay-out on calling the correct result. In the longer term the 'law of big numbers' would prevail - your account would spend time in and out of profit and would just oscilate about the break-even point. There is in fact more risk involved that the 50/50 chance with the 2:1 pay out suggests since it is possible that a losing run would reduce your account to zero (risk of ruin) meaning you could no longer play whilst no such restriction would occur if your account doubled - you would simply carry on playing until you had such a run which reduced your account nothing.

Steve.

 

[arabianights]

Actually it's worse than that. Skill will blow up due to gambler's ruin if he always bets two dollars.

 

[Skill Leverage]

At a payout of 2:1, you gain $2 PLUS your initial stake back if you win. You are thinking of a payout of 1:1.

In this scenario expected value tells us that you stand to win $0.50 each time the coin is flipped. That is a fact steve, sorry if you think otherwise but it's maths.

 

[Skill Leverage]

Obviously if it were 1:1 Steve and Arabian would be correct; over an infinite timeframe you would go broke. The fact that your initial stake is returned makes all the difference; at 1:1 you have no edge, you are purely gambling, but with 2:1 you have a distinct edge and, implemented correctly, will profit greatly over an infinite timeframe.

 

[stevespray]

Okay - it wasnt clear that your stake was returned as you simply stated that "the payout is 2:1". If you examine a roulette table you will see that it says (physically written on the table) "Pays 2 to 1" - this INCLUDES the stake money. Same on blackjack where the odds quoted are based on your stake money being part of the total win.

Obviously if someone was offering a £20 prize per spin of the coin for only a £10 risk then the punter will win easily over the longer run. You can use the 'Mars Equation' to calculate your optimum stake.

Steve.

 

[Skill Leverage]

Go to any bookies and place a bet at even money - do you think you just get your money back if you win? I don't know about roulette tables, but any normally-placed wager will include the return of your stake should you win; thus if you win a $1 bet placed at 2/1, 2:1 or two to one, however you say it, you walk away with $3 in your hand, not $2. Perhaps I should have made it clear, but it's pretty much a natural assumption for anyone familiar with betting on odds-based events.

Besides, the game itself is irrelevant; the discussion is about luck. The point I was making is that two people faced with the same situation/probabilities will not necessarily achieve the same results; this is not down to 'luck' over a decent period of time, it is down to their execution and understanding of that situation.

 

[Skill Leverage]

Obviously if someone was offering a £20 prize per spin of the coin for only a £10 risk then the punter will win easily over the longer run.

Not necessarily; if the punter starts with only £30 he could very easily go broke at £10 per spin, regardless of what odds he is getting. As you say, you need to work out an optimum stake - something which many people would not do, and when they lose all their money they will curse their bad luck - when in fact they made their own bad luck with their bet sizing.

This is of course pretty much exactly what I was initially saying, before you drew this off topic by incorrectly picking holes in my statement... I don't think anyone here is stupid enough to think that you could guarantee profit merely by betting on the outcome of the flip of a coin, unless the odds were stacked in your favour, which in my example they clearly are.

 

[stevespray]

I don't think anyone here is stupid enough to think that you could guarantee profit merely by betting on the outcome of the flip of a coin, unless the odds were stacked in your favour, which in my example they clearly are.

You'd be surprised actually! I've seen people on here suggesting that it is possible to make money using a simple Martingdale System by betting on black and red at an online casino.

My error, by the way was, a simple one. You said the 'payout' was 2:1 and made no mention of the stake being returned. With all due respect you state that your original post on the matter is clear / obvious but it is not. I'd be willing to bet (even money!) that most people who read your post would have interpreted it the way I did. :cheesy:

With regard to 'luck' itself - I agree with you. As I mentioned in a previous post my feeling is that luck is a concept and therefore a perception. As traders we are forced to develop a greater understanding of 'luck'. This sets us apart from Mr Average who wanders the streets hoping that he'll be lucky in the National Lottery draw on a Saturday night. As a result he ends up paying £1 for a lottery ticket which in real terms, based on odds vs prize money, is worth just under 50 pence.

In terms of trading psychology the perception of luck does play a huge part (at least at first). Generally it is because life will not have placed us in such a situation before. Because of this we connect trading events (wins and losses) with prior events in our lives which were both good and bad. Human nature tends to make us remember 'bad events' more painfully than 'good events'.

Steve.

 

[Skill Leverage]

My apologies then, I stand corrected. We got there in the end though!

I didn't know that about Lottery tickets either, to be honest I'm surprised they're worth that much in terms of your e.v...

 

[Skill Leverage]

As for the roulette thing, non-maths people I know who I would consider to be intelligent have paid money for roulette systems, and swear that they make sense... I guess some people's brains are just wired differently.