Can you be profitable with random entry?

[Tremaine]

Quote from moneymoneymoney:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=9757

Thanks! It didn't turn up when I made the search. The funny thing is: Van Tharps son seems to get the last word on this thread claiming that the system works consistently on some markets.

 

[Tremaine]

Quote from OddTrader:

That's only after stopping out, isn't it?

Yes. One position in each market at a time.

 

[OddTrader]

Here is my guess:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=70673&perpage=6&pagenumber=10

Quote from OddTrader:

E.G. That is to say: Prediction is not necessary if targeting small profits, however it would be very important if targeting good profits.

Of course, some conditions would apply.

 

[nononsense]

Quote from OddTrader:


Of course, some conditions would apply.

indeed

 

[OddTrader]

Quote from nononsense:

indeed

The very first condition (for a random-based system) is we would have to accept :

http://www.elitetrader.com/vb/showthread.php?threadid=70794

Quote from Tremaine:
That entry is one of the least important components of a trading system.

 

[bolter]

I use random entries extensively in testing and benchmarking trendfollowing systems, primarily in two capacities:

1. For testing exit mechanisms. A good exit mechanism should be profitable when combined with random entries across a number of markets over time.

2. For measuring the effectivness of entry signals. It's quite amazing how many conventional entry "signals" fail to match the performance of pure random entries.

My results are consistent with VT's claims.

 

[romik]

Quote from Tremaine:

I don't see how it would matter. He took a long or short position based on a coin flip. Am I missing something?

I don't see the logic in making a decision based on a coin flip, surely one, who has at least some knowledge about the markets, has more favourable chances using his own brain rather than a thoughtless process.

 

[nononsense]

Quote from OddTrader:

The very first condition (for a random-based system) is we would have to accept :

The most secure road to the poorhouse.

PS: That's almost as good as Jack's (as I pointed out before).

 

[nononsense]

Quote from bolter:

I use random entries extensively in testing and benchmarking trendfollowing systems, primarily in two capacities:

1. For testing exit mechanisms. A good exit mechanism should be profitable when combined with random entries across a number of markets over time.

2. For measuring the effectivness of entry signals. It's quite amazing how many conventional entry "signals" perform no better than random entries.

My results are consistent with VT's claims.

hush ....
Don't tell anybody about all this. Get rich quietly.

PS: I understand, you can't have been making money for a long time. You would know better otherwise.

 

[Tremaine]

Quote from nononsense:

hush ....
Don't tell anybody about all this. Get rich quietly.

PS: I understand, you can't have been making money for a long time. You would know better otherwise.

Nobody is saying that using random entry is a good idea. The challenge is obviously to beat random entry when you design this part of your system.

On the other hand: If making consistent profits (however small) with random entry is possible in certain markets, and if many people trade succesfully with systems have a reliability similar to random entry, then perhaps entry this is not the most important component of a trading system.