Nearly Random Entry vs a High Probability Entry

[inandlong]

... "high probability entry" simply means that, over n trades, whatever system one is employing, or testing, will yield a profit...

Entries don't yield profits. Exits do.

A "high probability entry" is one that increases the likelihood of a profit opportunity developing. From there it is trade management that makes the difference between profit and loss.

 

[alfonso]

Quote from dbphoenix:


In any case, any argument about random entry is pointless if the advocate(s) of random entry aren't making random entries. If you guys need to fill up the day with something, I suppose this is as good as anything. But you won't be reaching any conclusions this way.

I notice you keep harping on about the "random" entries talked about here not "really" being random. Even though it is abundantly clear to everyone that the argument isn't so much over what is random as it is about whether entering the market near randomly, haphazardly, chaotically, unsystematically, on a whim, whatever, can still be profitable. The point is that damir alleges he can turn in profits no matter how the entry is determined. So, I wonder just who it is that is "filling up the day" here?

 

[dbphoenix]

Quote from alfonso:

I notice you keep harping on about the "random" entries talked about here not "really" being random. Even though it is abundantly clear to everyone that the argument isn't so much over what is random as it is about whether entering the market near randomly, haphazardly, chaotically, unsystematically, on a whim, whatever, can still be profitable. The point is that damir alleges he can turn in profits no matter how the entry is determined. So, I wonder just who it is that is "filling up the day" here?

I'm not "harping" about it, just trying to stick to the topic of the thread, which is Random Entry vs High Probability Entry. If you prefer that it be Nearly Random Entry vs High Probability Entry, why not start a new thread?

 

[inandlong]

If you prefer that it be Nearly Random Entry vs High Probability Entry, why not start a new thread?

How about I just change the title of this one?

 

[ramora]

Quote from inandlong:

How about I just change the title of this one?

How about "LottoBalls" or "LottaBalls"?

 

[size]

Quote from alfonso:





It doesn't necessarily have to be that way. Damir didn't say he could make money doing anything, just that he could enter the market randomly. So, depending on what sort of money management methodology he's using, it might not be the case that he can just enter as many trades as he can cram into the trading day.

Perhaps he did not say he could make money with random entries, but he was challenging anyone who cared to accept it that he could easily beat their performance using pure random entries. Since I could imagine only a consistently profitable trader would accept a challenge like this, I am sure anyone making this challenge would also logically reason the same. So while he did not come out and say he had a positive expectancy on any trades using random entries, clearly it was implied.

Given this information, one could only reason that if one had a positive expectancy on trades entered randomly, which would mean at any given time - now, 2 minutes from now, 4 minutes from now, etc, that this person indeed has a method by which to ultimately own the world. Otherwise the claim could not be true.

 

[TriPack]

If you read through the dialog between nitro and damir you will find that one of damir's requirements was to be able to name the # of signals during the day. The # of trades taken is clearly a variable he needs to control for his system to work. It is still possible to create a scenario where damir trades random times and random entries with a limited # of total trades.

 

[size]

Quote from TriPack:

If you read through the dialog between nitro and damir you will find that one of damir's requirements was to be able to name the # of signals during the day. The # of trades taken is clearly a variable he needs to control for his system to work. It is still possible to create a scenario where damir trades random times and random entries with a limited # of total trades.

If someone can take purely random entries and exit out of them with net positive long term results, then there should not be any limit to the number of times he can do this, otherwise he can not do it at all. This is simple logic. There is no required setup that he needs to wait for.

 

[TriPack]

Quote from size:



If someone can take purely random entries and exit out of them with net positive long term results, then there should not be any limit to the number of times he can do this, otherwise he can not do it at all. This is simple logic. There is no required setup that he needs to wait for.

No there is logic to this. The market dictates how many trades are feasible in a certain time. If you take your argument and extend it out you will see that a person would need to be able to make a trade a second to fulfill your requirement. Requiring this doesn't prove that random entries don't work because the requirement is unreasonable.

If I use a random # generator to generate 5 numbers, those 5 numbers are no less random than if I had to generate a random number of random numbers between 1 and infinity. And by the way, it is impossible to generate an infinite # of numbers, so at some point you have to use an arbitrary fixed cutoff.

Random entry, random time, but not random frequency. It's not a difficult concept. Trade direction and time can still be random, regardless of how many trades you pick for the test.

 

[alfonso]

Quote from size:



If someone can take purely random entries and exit out of them with net positive long term results, then there should not be any limit to the number of times he can do this, otherwise he can not do it at all. This is simple logic. There is no required setup that he needs to wait for.

But he may be constrained by his money management principles; and money management principles are central to his being able to turn in a profit. So really, it's not necessary for him to be able to trade 21,000 times a day.

But look, even if he was required to be able to trade as you state, his inability to do so would only be proof that he can't trade as you suggest he should be able to. That's not really a huge knock!