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Agree 100%. P.S DO you think trading is gambling then? DO you recommend that one goes with the negative expatany and quit if ahead before the long run gets him?

OK lets use the mighty 3 to 1. We all love 3 to 1. I am not sure why. So we go from 1 to 1 with 60% win rate to 3 to 1 with 33.33% Both will give you a profit factor of 1.5. For me they are the same but if you like the magic of 1 to 3 let's use it. So. In my original post replace 5 tick...

Let's drop the coin tossing. Price has hit 100 from above for a 3td time. Price now drops to 99. 100 did not hold. You sell at 99. Let's just use this: 5 tick target/5tick stop with 60% win rate. (PF of 1.5) In a random market. There is 50% chance that the price will hit 94 before...

Going back to the coin tossing. How will you know that there is a trend? You will use math to find that after N tosses it seems that the coin is unfair. There is a trend. But you can not be 100% sure. There is no way to be sure that your trend is real. You will have to gamble to that believe...

I agree that coin tossing game is to simple to compare to trading. With trading it gets even worst. Your example is very good. There are many trades using this. If you add the money management aspect to it you will find the difficulties of having an edge. Let say you go for 5 ticks profit...

You need to buy all the possible combinations. The cost will be higher then the price. I doubt there that many of tickets available.

Agree. But what is the process of discovering that the coin is not fair? How do you know it is not fair? There is a formula that shows the minimum number of tosses N, one needs to be able to determine if a coin is fair with X% of certainty. The problem for me is that once you do find the...

Let's keep it focused. "the absence of any cause of events that can be predicted, understood, or controlled" So to prove it is not gambling we need to prove: 1. Existence of some cause -> event 2. Understanding what causes the event 3. Predicting the event 4. Or controlling the...

Very good point.

Sustainable. You take data from history as a "prove" for sustainability. I call that taking a chance (gambling). The coin in your example does not change. If it is unfair it will stay unfair. What if the game is played with a new coin every time and your "system" shows a possibility of...

I would like you to point me to few books on the topic.

'insider trading' is illegal. (CaptainObvious is trading right now so I took the liberty to state this.)

Do You Think Trading is a Game of Chance? Yes. I have no idea how my current trade will end up. I use my skills to plan my trades so in the "long run" I will have a positive expectancy. The problem is I am not guaranteed that there will be a long run and markets can change and my planing...

Chatting on ET is like being in a bar during spring break in New Orleans without the benefit of booze and boob flashing. Just noise and few reasonable voices that a tough to hear.

Good point. So what keeps you going? Do you just ride your luck as long as it will go? What will be the sign the one should stop trading? I got 20% in my trading account for January and 28% on my IRA account for January. Is this luck? How do I know?

Deep!

In that case you will say that the casinos in Vegas are gambling. They can't guarantee their edge for the next X days. The same for the insurance companies. I think we need to accept that one side has a negative expectancy than the other. The side with the negative expectancy in the "long...

Just curious. Do you believe that your trading system has an edge? What is this number for you: Win% * AverageWin / (1-win%) * AverageLoss Let's say for your last 60 trades.

Check your chance of getting in a serious car accident in your area. Let me know how you feel about the number you get. IMO it will be worst than bunch of games in Vegas clearly accepted as gambling. Driving a car is gambling in South CA for sure.

No. If you reduce the negative edge to a small number then the line between who is the gambler and who is the house is not that clear. One can survive with a negative expectancy for a long time. But never the less he is gambling. Driving a car is gambling. We have negative expectancy, but...