How to know trend or chop in REAL time

[dbphoenix]

I thought the Softbank trade where he made the market was more the exception than the rule. You'll also note from the article:

"Two years after learning to follow the momentum, CIS says, he’d made 80 million yen day trading on the sly at the office. In late 2003, he quit the salaryman life to work the market full time."

As you wrote, nothing is lost by waiting for the turn. I think once a turn has spread its elbows just a bit, so to speak, that is perhaps the safest time to initiate the first leg of a position. It doesn't have to end there, but I think it's the best place to start.

Actually something is gained as buying too early means that you first have to dig yourself out of the hole before the account turns from red to black. Waiting pays, as long as one doesn't wait too long.

 

[Visaria]

This doesn't make sense. A trend is not a single-time event like the outcome of a roulette spin. Unless you're claiming that your trends immediately reverse with no intervening chop, they most certainly aren't occurring "in a row". And of course to have a trend eventually follow the most recent one is just normal behaviour.

Frankly this roulette example is ridiculous. The chance of getting 23 blacks in a row for a fair game of roulette is one out of 15,753,318 for a single-zero wheel and one out of 29,090,762.5 for a double-zero wheel. More likely the game was rigged.

I've seen at least 18 of one colour happen consecutively on a roulette wheel in a casino.

When you consider all the roulette wheels in all casinos everywhere, spinning every second of the day, the probability of this happening somewhere is quite high, 90%+.

 

[Frederick Foresight]

I've seen at least 18 of one colour happen consecutively on a roulette wheel in a casino.

When you consider all the roulette wheels in all casinos everywhere, spinning every second of the day, the probability of this happening somewhere is quite high, 90%+.

Assume that the chance of landing on black is 0.5, or 50%. (It's actually a bit lower because of the null.) Then the probability of 18 consecutive blacks would be 0.5^18, or ~0.000004. Very, very remote odds. Either you witnessed an extremely unusual event, or the wheel was flawed.

As for your comment about all casinos everywhere, the same can be said about lotteries. But that still doesn't improve the odds for any individual lottery ticket buyer. So I'm not quite sure what your point is.

 

[kut2k2]

I'm not sure I understand the rationale, unless the outcomes are not independent (slanted machines or whatever). But then, I've never set foot in a casino.

I believe the rationale is that luck comes in bunches and going against a trend jinxes it or the gambler. Most gamblers are a superstitious lot. My Kelly fraction for a negative-expectation game is zero so that is what I bet: zero.

 

[Frederick Foresight]

I believe the rationale is that luck comes in bunches and going against a trend jinxes it or the gambler. Most gamblers are a superstitious lot. My Kelly fraction for a negative-expectation game is zero so that is what I bet: zero.

I'd agree that zero is a good bet size in a casino.

 

[Visaria]

the point is that you will see unprobable streaks the more data you have or witness.

Assume that the chance of landing on black is 0.5, or 50%. (It's actually a bit lower because of the null.) Then the probability of 18 consecutive blacks would be 0.5^18, or ~0.000004. Very, very remote odds. Either you witnessed an extremely unusual event, or the wheel was flawed.

As for your comment about all casinos everywhere, the same can be said about lotteries. But that still doesn't improve the odds for any individual lottery ticket buyer. So I'm not quite sure what your point is.