Reality based coin-tosser method that beats 95% of traders in the world.

[Whisky]

Quote from AyeYo:

Sorry, I just don't see it. As already pointed out by someone else, you can have 5 wins totaling 50 ticks and 5 losses totaling 50 ticks, you think that's the real world? The real world says you can just as easily have 5 wins totaling 5 ticks and 5 losses totaling 100 ticks. What then? You really think that will just average out over time? Based on what?

You don't see gravity either. Jump out the window and feel its effects. Make it a second floor of a building at most, otherwise you may kill yourself.

 

[AyeYo]

Quote from Whisky:

You don't see gravity either. Jump out the window and feel its effects. Make it a second floor of a building at most, otherwise you may kill yourself.

Explain it. What law of nature says it HAS to even out? The heads/tails of a fair coin will eventually even out. Where's the statistical rule that says your given win/loss AMOUNTS have to also even out?

I can toss a coin to predict whether the sun will rise tomorrow. The toss results will even out, does that automatically mean I'm going to be right 50% of the time?

 

[dtrader98]

Quote from AyeYo:

Sorry, I just don't see it. As already pointed out by someone else, you can have 5 wins totaling 50 ticks and 5 losses totaling 50 ticks, you think that's the real world? The real world says you can just as easily have 5 wins totaling 5 ticks and 5 losses totaling 100 ticks. What then? You really think that will just average out over time? Based on what?

The upward bias of the market has also been mentioned. If you actually toss enough coins that the head and tail count evens out, you're still far from break even because the market is biased long.

What kind of draw downs are you going to have during strong trends? You're tossing coins for a (theoretically) 50/50 call on long or short, all while the market flies upward or downward. Again, you're far from breaking even. But you feel that this will average out over time - based on what?

AyeYo, piece of advice. When something smells like bs and needs to be obfuscated in non-nonsensical gibberish, it usually is.

You're thinking correctly to begin with. Don't dilute your proper understanding by heeding the siren calls of the mad.

 

[Whisky]

Quote from AyeYo:

Explain it. What law of nature says it HAS to even out? The heads/tails of a fair coin will eventually even out. Where's the statistical rule that says your given win/loss AMOUNTS have to also even out?

I can toss a coin to predict whether the sun will rise tomorrow. The toss results will even out, does that automatically mean I'm going to be right 50% of the time?

It doesn't have to even out. Over a large number of samples the expectation converges to a loss equal to commissions and slippage. If you don't understand the mathematical proof, I can suggest you make a Montecarlo test and see it converge in front of your eyes.

Every outcome is 50-50 that's all the coin does. The payoff is positive or negative whatever amount. The expectation is 0. And then you substract commissions and slippage.

Maybe someone else can explain it better?.

 

[Whisky]

Quote from dtrader98:

AyeYo, piece of advice. When something smells like bs and needs to be obfuscated in non-nonsensical gibberish, it usually is.

You're thinking correctly to begin with. Don't dilute your proper understanding by heeding the siren calls of the mad.

You are a liar.

You will have to prove to yourself and others that your suggestions bring in at least 1 tic per day on average extra profit over the original method rules.

 

[AyeYo]

Quote from Whisky:

It doesn't have to even out. Over a large number of samples the expectation converges to a loss equal to commissions and slippage. If you don't understand the mathematical proof, I can suggest you make a Montecarlo test and see it converge in front of your eyes.

Every outcome is 50-50 that's all the coin does. The payoff is positive or negative whatever amount. The expectation is 0. And then you substract commissions and slippage.

Maybe someone else can explain it better?.

You don't seem to realize that you aren't playing roulette with a fixed $100 per spin. You're trading the ES without stops. Your win and loss amounts are NOT fixed. You could throw tails for a week straight in this market and blow your account to hell. What then?

There's a massive difference between tossing coins with a fixed win/loss amount and having a 50/50 system with whoknowswhat worth of loss and gain with each toss.

 

[Whisky]

Quote from AyeYo:

You don't seem to realize that you aren't playing roulette with a fixed $100 per spin. You're trading the ES without stops. Your win and loss amounts are NOT fixed. You could throw tails for a week straight in this market and blow your account to hell. What then?

There's a massive difference between tossing coins with a fixed win/loss amount and having a 50/50 system with whoknowswhat worth of loss and gain with each toss.

Everything you said in this post is correct.

Yet what I said is correct as well.

Paradoxical uh?

You will have to prove to yourself and others that your suggestions bring in at least 1 tic per day on average extra profit over the original method rules.

 

[wutang]

Quote from Mike805:

No, there is no data snooping going on here.

http://en.wikipedia.org/wiki/Cumulative_distribution_function

Ah, as I said. I'm a noob. Thanks for pointing me in an interesting direction.

 

[Whisky]

Quote from AyeYo:

You could throw tails for a week straight in this market and blow your account to hell. What then?

You could throw heads for a week straight in this market and blow your account to hell. What then?

 

[AyeYo]

Quote from Whisky:

Everything you said in this post is correct.

Yet what I said is correct as well.

Paradoxical uh?

You will have to prove to yourself and others that your suggestions bring in at least 1 tic per day on average extra profit over the original method rules.

No. You prove break-even first.

Look at a chart of the DOW since the 20's. If you had 50/50'd that you wouldn't have a pot to piss in, much less an internet connection to post on. I want to see proof of break-even first.

Your logic works in the casino with a fixed win/loss. It doesn't work in a long biased market that has the ability to trend your 50/50 trading into submission.