Flip of a coin..but
- Thread starter hilmy83
- Start date
Price retracements.
Good Morning hilmy83,
Yes, price retracement is something every trader see and know.
How will you quantify statistically if price retracements trading methods provides you an trading edge worthy of applying trading capital to?
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Just use the expectancy value formula. if it's positive, it'a good strategy. My rule of thumb is minimum 100 trades for review.
https://www.elitetrader.com/et/threads/flip-of-a-coin-but.372081/page-4#post-5745268
But this formula like everything else is always in hindsight. You can have 1000 winning days and that 1 day where you screw up , it can significantly changes your value.
So you have to manage that 10-20% bad days. Are you willing to risk it all? maybe lose a portion of winnings for b/e days or outright cut your winning days wiht predetermined max loss? (which does change your overall EV)
Hello hilmy83,
How will you obtain XXX to XXX,XXX trades to confirm positive expectancy?
Thank you,
There is way more variance in poker than just something like a pair being 40% or whatever. The closest you could come to comparing playing poker against other humans is an infinite invariant. Where the market goes simply up or down, playing poker in any form is way more complex and has no real randomness, because of the variables between number of players and the effect of "pot odds".
Texas hold-em is of course the perfect example. If you are playing head-to-head, you and your player have two hole cards. There's a full flop on the table after the river. There's 3 Aces on the flop, a 2 and a 10.
That has a certainty for you if you have an ace or a 10 on your hole. If you have an ace, you win. But if you have two 2s in your hole, then you think you have won. 50/50 chance? Hardly. Now expand that to their being 3 other players at the table. So now 5 players total.
You have the Ace, you win. But if you have two 2s? Now it is tricky, because there is a better chance that one of your opponents has two 10s.
Trading is NOTHING like games like hold-em, because the variables in hold-em are way grander than simple up/down moves.
Trading it? what are you even asking
Yea, it's like trading penny stocks. The smaller the volume (number of participants) the higher the variance.
If you played poker at a table with 1,000,000 players on it, your odds would reflect closer to the true odds
That is kinda' hard to do with a deck of 52 cards. The most you can do in hold-em is 9 players per table.
lol. Right, i meant to say like playing an online session with multiple tables at the same time.