The Coin Flip

[DionysusToast]

lulz

You Sir, have created a monster... :clap: :clap: :clap:

 

[DionysusToast]

Well - so that you girls stop fighting. Let's get back on track.

If you enter randomly - will you see patterns? "Do you think we would begin to find consistencies?"

It depends what else you do after you enter, really. As has been discussed, random entry plus trailing exits will be profitable under certain circumstances. With such a technique, am individual entry may be random but the 'system' is a trend following one.

So -if you were to do such a thing, you'd be advised to consider the market conditions that were present during any run of winners or loosers.

 

[kimo'sabby]

Trade management is important, but it takes second place to trade parameters. Parameters - management - coin flip, it may work. I say 'may', i've personally never done any extensive research into tossing, other than the pornographic type.

 

[higherSelfishness]

Ha, wasn't aware of the hare's thread. Maybe some of my points will be redundant - oh wellz.

Since you already know how to trade and looking for technique on spending the winnings, why do you need the coin flip ?

Never said I need it.

I came up with the idea riding my bike yesterday and thought it'd make for good forum discussion. This is solidly for educational (for beginners and myself)/entertainment (for me, at least)/conversational purposes (for all of us). I do intend, however, to bring us ever further down the rabbit hole (ironic "the hare" would have a presence here, and have started one before this!), and maybe, if I'm a good, disciplined little boy, I hope to demonstrate something I have found to be very interesting - that is, if my theory holds up.

Then again, I am known for my capriciousness.

We already have a hint of the "Cambrian Explosion" of approaches we can take to just a simple concept such as flipping a coin - that makes it immediately clear how selecting one's approach to the market can be extraordinarily difficult. So, for beginners, first lesson is actually a question: whereTheF--- do we begin?

And why not begin here: . . .?

Target 20 pips, Risk 10 pips - each trade. - Anything less then a 2:1 I doubt will work

Why don't you set up a new thread and test it?

Why, that's what this thread is for, ffsear! Though I find it prudent to look at both 2:1 and 1:2 (maybe more??)

What is most important with these kind of approaches is win% - it is the only remaining variable in question.

With 2:1 parameters (profit:loss), we need a win% only slightly higher than 33.33% to be profitable long term. Inversely, for 1:2, we need a win% slightly higher than 66.66.

How many of us predict we do not meet those thresholds over a long enough period of time, and we lose money indefinitely?

Many of us, I am sure.

So, we'll go ahead and make a reasonable prediction and say neither of these two approaches will be profitable long term and will, in fact, lose money.

Hold up . . . Why wouldn't it be just as easy to "trade opposite" in order to make money? . . . How in the world, upon a completely random system (which doesn't work) would we be able to derive something profitable? This can't be the case! Since the "opposite" of our random system is, in itself, completely random, neither of them are "allowed" to do anything indefinitely. They cannot be indefinitely profitable, either, because, since they are "random," the opposite is equally as random and is therefore equally valid.

So, the average gain over an infinite time scale will be ZERO, but we know the equity of our "account" will fluctuate, sometimes quite heavily in one direction or another. But alas, that break even point seems to act as a great attractor. Does that mean, even though it's a random system, that there will be predictable behavior nonetheless?

 

[BeginnerJoe]

whereTheF--- do we begin?

They certainly shouldn't begin by believing flipping a coin will help them win at the roulette table. It would be a looser start, especially at trading where the odds are actually significantly lower than the casino. Betting at the wrong time in the markets has a 100% chance of loose. It would be illegal for any casino to offer a game with this kind of chance.

 

[higherSelfishness]

They certainly shouldn't begin by believing flipping a coin will help them win at the roulette table.

I never said they should.

:?:

Good point though...?

 

[The Leopard]

They certainly shouldn't begin by believing flipping a coin will help them win at the roulette table.

No, you need a proper system to do that. I like to double up after every looser, it puts the odds on my side.

 

[Soloquan]

I love it here at T2W

 

[intradaybill]

All trading systems can be replicated by a random sequence of coin tosses. A fair coin can generate persistent trends for extended periods of time. Try the simulator in this blog that explains how people are fooled by random sequences in believing they got something: Fooled by Randomness Through Selection Bias | Price Action Lab Blog

Here Michael Harris shows that even charts can be random sequenes of coin tosses with a very small bias: More on Games with Fancy Names that People Play | Price Action Lab Blog

Two of the most interesting and important blog posts I have ever come across.

 

[kimo'sabby]

All trading systems can be replicated by a random sequence of coin tosses.

That is a real nasty mathematical generalisation. How many random coin tosses would it take to match my system?

You can't answer that, d!ckwad.

 

[kimo'sabby]

Intradaybill, Where is your answer? You are a hollow sweatbag, and not a mathematician.

 

[Soloquan]

Intradaybill, Where is your answer? You are a hollow sweatbag, and not a mathematician.

 

[Jason101]

The moment the trade is opened is such a small fraction of the total time the trade will run. How important is this time of static price really?

 

[Shakone]

All trading systems can be replicated by a random sequence of coin tosses.

That is a real nasty mathematical generalisation. How many random coin tosses would it take to match my system?

You can't answer that, d!ckwad.

I can see where he's coming from, but it's not even an accurate mathematical generalisation. It's false.

 

[robster970]

this

d!ckwad.

and this

hollow sweatbag

have to be the primary reason why I will vote for Kimo as the member who has contributed most to T2W in the annual Christmas votefest.

Outstanding quality insults.

 

[The Leopard]

this



and this



have to be the primary reason why I will vote for Kimo as the member who has contributed most to T2W in the annual Christmas votefest.

Outstanding quality insults.

Kimo would be a contender, as would The Hare. Although Joe might get my vote, his style has me rolling around.

Wackypete is a contender, both because he's a generally good egg and because instead of calling a lawyer over one of my recent posts like any normal person would do, he actually gave it a recommendation.

Finally, there's always Kojak, but I doubt he'd win even if he got the most votes .

 

[robster970]

Kimo would be a contender, as would The Hare.

I do like the hare but object to the fact that he is a multi-nic of Mr Charts. I discovered this when I posted up a query about root canal work and he forgot to switch id's and posted a very detailed synopsis of methods for handling said dental work. Aside from this he certainly is a force to be reckoned with and is one of my favourites too.

 

[Mr. Charts]

I do like the hare but object to the fact that he is a multi-nic of Mr Charts. I discovered this when I posted up a query about root canal work and he forgot to switch id's and posted a very detailed synopsis of methods for handling said dental work. Aside from this he certainly is a force to be reckoned with and is one of my favourites too.

 

[scose-no-doubt]

Do you get an alert when someone posts up your name or do you just lurk the lulz while pretending to be above them for commercial reasons, Charts?

 

[The Leopard]

Do you get an alert when someone posts up your name or do you just lurk the lulz while pretending to be above them for commercial reasons, Charts?

WTF? Is this guy enjoying teh lulz but not putting nothin' in the pot?