Parrondo Paradox

It's vaguely similar to Shannon's Demon which is in wide use in professional money management today, hidden behind a suitably authoritative sounding name.
 
Maxwell had such a demon, as well. Why not cut the crap and keep drawing your account down to that integer multiple and playing winning game B2 all the time?
 
Quote from hihi:

.... parrondo paradox?
http://www.cut-the-knot.org/ctk/Parrondo.shtml
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The article is misleading, particularly the reference to
Maslov:

"Dr. Sergei Maslov from Brookhaven National Lab
had shown that if an investor simultaneously
shared capital between two losing stock portfolios,
capital would increase rather than decrease"

Maslov showed no such thing, nor is what he did
show (a version of Shannon's Demon) so complex that
it cannot be applied to real trading.
 
It sounds like all I have to do is trade any two securities any way I want and together they will show equity growth. That doesn't seem to happen to me though.
 
Quote from Hook N. Sinker:

It sounds like all I have to do is trade any two securities any way I want and together they will show equity growth. That doesn't seem to happen to me though.
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No. Only when your strategies have the probabilities of the coins involved in the paradox.
 
Quote from Hook N. Sinker:

It sounds like all I have to do is trade any two securities any way I want and together they will show equity growth. That doesn't seem to happen to me though.
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I guess they would have to be related in the way you played them or the way they behaved somehow.

I was reading that article from the NYT and I got a funny feeling because the strategy that I am currently working out seems to be what they are describing to an extent. It is two games played on the same data, the market decides which one [or none] is played every bar, gains are locked in [ratcheted] during every bar.. it's a tremendously interesting subject that I feel [I can't say I really understand the theory very much so I use the word "feel"] could lead to some big up-jumps in typical gains for somebody...
 
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