Can you be profitable with random entry?

[Tremaine]

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" fail to match the performance of pure random entries.

My results are consistent with VT's claims.

Thanks Bolter.

Has anyone achieved similar results?

 

[OddTrader]

Amazom.com for Books => " Market Neutral"

 

[Lights]

many prop scalpers do this but don't realize that they do. i see guys testing long and short repeatedly on a stock or sector all day to what seems like random entry. it's basically cutting losers and riding winners.

assuming 50/50 chance of correct move on stock entry during specified time period, a cut losses ride winner strategy works. traders may fail in non-random entry because their probability of calling correct move could be <50%.. which is inferior to random entry (coin flip 50/50)

Quote from Tremaine:

Thanks Bolter.

Has anyone achieved similar results?

 

[Tremaine]

Quote from OddTrader:

Amazom.com for Books => " Market Neutral"

Not that I'm in any way an expert on the subject, but what do market neutral strategies have to do with random entry? All market neutral strategies that I know of rely on prediction.

 

[Tremaine]

Quote from Lights:

many prop scalpers do this but don't realize that they do. i see guys testing long and short repeatedly on a stock or sector all day to what seems like random entry. it's basically cutting losers and riding winners.

assuming 50/50 chance of correct move on stock entry during specified time period, a cut losses ride winner strategy works. traders may fail in non-random entry because their probability of calling correct move could be <50%.. which is inferior to random entry (coin flip 50/50)

Thanks Lights. This seems to support the view that random entry can be used for small profits (and hence may be a reasonable strategy for scalpers).

Anyone else?

 

[OddTrader]

Quote from Tremaine:

Not that I'm in any way an expert on the subject, but what do market neutral strategies have to do with random entry? All market neutral strategies that I know of rely on prediction.

Just 2 cents:
Probably trading 5 pairs (=10) markets of strong negative correlations with always long (or always short) entries would be actually a market neutral system.

 

[Lights]

trader who calls >50% correct move on entry obviously superior and outperforms the herd

however, it seems that the coin at 50% is a better trader than most speculators.

this is what makes a market.

Quote from Tremaine:

Thanks Lights. This seems to support the view that random entry can be used for small profits (and hence may be a reasonable strategy for scalpers).

Anyone else?

 

[OddTrader]

Quote from Tremaine:

He traded 10 markets at the same time, and was always long or short in each of them.

Personally I wouldn't call that random entries, even nothing close to.

 

[Tremaine]

Quote from Lights:

trader who calls >50% correct move on entry obviously superior and outperforms the herd

however, it seems that the coin at 50% is a better trader than most speculators.

this is what makes a market.

Intersting point of view

 

[Tremaine]

Quote from OddTrader:

Personally I wouldn't call that random entries, even nothing close to.

Just to be clear: VT would flip the coin everytime he took a new position. At any given time he would (most likely) have both long and short positions.