The Flip-A-Coin trading strategy and lessons learned from it

>I'm sorry but your illustration sucks!

Not so fast "maestro".

>Unlike stock market where the price can go either
>up or down amount of posts that I place can only
>go up!

Not true...they need not go up at all. You conveniently forget the option - no more posts by you. In addition to the obvious benifit of other posters not being belittled by you this would also illustrate the end of the trend as he called it.

>So, obviously, soon or later there will be
>enough posts to meet any prediction

I just love when people use "obviously" when it isn't obvious (or even valid as in this case) in the least. Just as humans are in control of pricing, you are in control of your posts and if you choose not to buy(post) the price(posts) will not rise and he will lose his stated trend following bet.

Being a trend follower myself I'm still on board his system. So far I'm up but I'll quite happily take any loss in this case.

>I can also make predictions like this: you will be
>one year older a year from now.

Nice maestro, to demonstrate your point you choose an trend example that contains no variables (based on the 'he's still alive' assumption). For his example he chose a trend that contained a very real human behavior variable...will you or will you not continue to post. At first (second?) glance you appear to be logically challenged.

>Using your example the only fair bet would be
>amount of posts a day that I make. And
>suddenly it is not so easy

You apparently also have some sort of reading comprehension issue. He already DID bet on the number of posts per day you would make (read it again maestro and this time pay attention).

JB
 
NET

You did great job by posting that thread. When I read it first time, I got your point. It is true that TZ always held us back and give us some kind of over confidence that whatever we did it was correct. We start to predict the mkt. I know that it does not mean to flip the coin on every tick and get in the market. Do the due delignce and find the good entry according to your set up and then do not wait and try to reconfirm from other TA. If you do that it will be too late to get in or you will miss the entry. It is true that when you lost 23 out of 25 trades because all this TA confirmation, then it would be better to get entry by flipping the coin at least you will get 50/50 result in your favour.

The few people who jumped on you, may be did not understand to your post thoroughly and they just got impression that only flip the coin and start trading which is not a way to do that. It is just an example how our minds work.
 
For the most part, an excellent thread.

For my part, I have a definite positive EV playing poker, but have yet to get a true handle on stock trading. And I think the reasons are related to the things discussed here.

In poker, (holdem), there are very definite signals to enter a "trade", that is to enter the pot as opposed to throwing in your cards. These signals are mathmatically defined and cannot be mistaken. A strong player will follow his/her discipline and only enter when the "signal" is correct. Weaker players will give in to hope, revenge, dispair, or whatever, and enter with less favorable chances.

This differs from the market, I believe, in that the market does not present such clear entry signals. Some signals perhaps, but not nearly as defined as a good poker starting hand.

After the flop in holdem, things get a lot more dicy. Paying attention to the action and being ready to change your previously held belief about your hand, ie, your position in a trade, is of paramount importance.

In a trade, you must be ever ready to "toss your hand in" with a loss. In poker, the money is made from those who "fall in love with a position" and simply can't believe those pocket aces are beaten.

The discipline is the same. Recognizing when you are wrong.

In poker and trading, I am good "after the flop", I get out of losers quickly and with a little damage as can reasonably be managed. The difference for me is that I can't see good entries in the market.

And, in poker, you only pay commisions when you are a winner.

:p

Again, good points made by many here.
 
Good topic NET !
I came to the same point in my own trading evolution a while back.

Somewhere In Van Tharps book -
Trade you Way to Financial Freedom....he says,
"Cut your Losses and Let your Profits Run".......is all about "Exits".
Let your profits run = where to exit.

Tom Basso (interview in the Tharp book) says:
"I don't limit the amount I can make in a trade.
My philosophy is to let my profits run.
If I ever find a trade that keeps going in my direction so that I never have to get out, great!
I use trailing or technical stops. Once those are hit, I'm out of the position."

Mark Fisher said as much - in another way - while describing a "Long side" trade he had taken.
"I don't know how far it's going to run - that's why I usually don't get out at the top -
I get out when it's hits my stop"
 
Quote from Tupper:

I presume abogdan is gone.
More...

Hi there. I have just came back from the doctor's appointment with my daughter. Thank God its over! I have read the latest posts including the one by Turok. It is very apparent that the trend discussion is very close to our hearts. I'm not the one to change your beliefs and continue to argue that trends don't exist however, I have to say that it is mine! If it somehow works for you then you should share with us some examples. Because, again, in the "posts amount" example by neutrino the negative component does not exist, in other words, I can not have negative posts. Therefore in the "trend" of posts the DC (Direct Current, electrical engineers will get it) component is present making any smoothing valid. If you, on another hand, take a first derivative of it (rate of change) then you would have another story. Anyway, I'll present my philosophy topic by topic using old school approach: first I'll use the common sense to establish the axioms, then we will agree on the rules of deduction and then we will construct the theory (if you guys, of course, are still interested)
 
Bundlemaker: I will definitely be doing those exercises. When I get into a trade now, I ask myself " Where will bundlemaker get out?". NET, I am doing the same
thing u did with the Flip-A-Coin strategy. It's not
me who is trading.

Abogdan: I don't think u should mind those minor distractions and
continue posting. Read this one http://www.saladltd.co.uk/salad pages/Nlp tips/nlp_tip_9.htm
if u hesitate. It is your opinion after all.

P.S. It took me a while to write it. Got hungry right in the middle of typing and didn't see abogdan's post.
 
Quote from coffeezoo:

Bundlemaker: I will definitely be doing those exercises. When I get into a trade now, I ask myself " Where will bundlemaker get out?". NET, I am doing the same
thing u did with the Flip-A-Coin strategy. It's not
me who is trading.

Abogdan: I don't think u should mind those minor distractions and
continue posting. Read this one http://www.saladltd.co.uk/salad pages/Nlp tips/nlp_tip_9.htm
if u hesitate. It is your opinion after all.

P.S. It took me a while to write it. Got hungry right in the middle of typing and didn't see abogdan's post.
More...

good site! very entertaining!
 
>If it somehow works for you then you should
>share with us some examples.

That is what Neutrino did...gave an example. So far so good.

>Because, again, in the "posts amount" example by
>neutrino the negative component does not exist,
>in other words, I can not have negative posts

To put an end to an upward trend you don't you don't need a negative component...only a lack of upward component.

...and you don't need negative posts for Neutrino to lose his "bet".

JB
 
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