Trading Lessons/Insights From Coin Flipping
- Thread starter tradingjournals
- Start date
Quote from JSSPMK:
Adjust that for inflation say 35% over 13 years & you might as well stay in premium bonds
Umm, true, but how many traders consider their results in light of inflation? Anyone? So, 1 point for creativity, -1 point for the red herring (http://www.logicalfallacies.info/relevance/red-herring/). Hey, you're breakeven, just like the last two coins I flipped
Zero commissions?
Quote from masterjaz_99:
Umm, true, but how many traders consider their results in light of inflation? Anyone? So, 1 point for creativity, -1 point for the red herring (http://www.logicalfallacies.info/relevance/red-herring/). Hey, you're breakeven, just like the last two coins I flipped
It doesn't matter who does what. Main point is that your example is not even worth considering, you won't get any OPM based on net annual average return of 2.5%. You gotta do much better than that. Don't forget you are offering a risky investment, therefore annual net average return has to be at least 10%.
Huh?
What does this have to do with net annual return? Risky investment? WTF?
Who said anything about those metrics, let alone actually investing. You missed the point of the post entirely.
The point is, from a system evaluation standpoint, why are we seeing a profitable equity curve from a random condition?
What does it mean?
Also, in response to the 0 commissions comment; yes, its set at zero for "thought experiement" purposes only.
If we want to be realistic, then 1600 trades x $5 R/T = $8k in costs. The system netted $68k, so we're still on the plus side by $60k after commissions.
It's not 60k in 13 years, you can't just leave out inflation Lol.
Secondly, everybody that trades for living knows that 50% system, whether based on random entries or not, can be profitable, even less than 50% can be very profitable. It is about average return vs average risk. If you get that right, then providing you don't overcommit you will do very well.
Why is it related? Because you are talking about making money, not wasting time on low return systems, random or not
Secondly, everybody that trades for living knows that 50% system, whether based on random entries or not, can be profitable, even less than 50% can be very profitable. It is about average return vs average risk. If you get that right, then providing you don't overcommit you will do very well.
Why is it related? Because you are talking about making money, not wasting time on low return systems, random or not
Quote from JSSPMK:
It's not 60k in 13 years, you can't just leave out inflation Lol.
Secondly, everybody that trades for living knows that 50% system, whether based on random entries or not, can be profitable, even less than 50% can be very profitable. It is about average return vs average risk. If you get that right, then providing you don't overcommit you will do very well.
Why is it related? Because you are talking about making money, not wasting time on low return systems, random or not
I'm not sure where you went wrong here, possibly by not reading very carefully... 60k is from 1 contract constant over time... No position size relative to account...
Inflation? Seriously? That's your angle? Wasting time?
You've failed to grasp a very important concept here... In fact, you've missed the ball by such an extent, I'm starting to think there's no hope for you. Use your brain please.
Mike and others here who are being civil, Thank you for your time and insight about this subject.
Question about your results that you just posted ?
What role if any does time have an affect in this experiment? I noticed the largest winners and losers were held for 159 bars each.
Question about your results that you just posted ?
What role if any does time have an affect in this experiment? I noticed the largest winners and losers were held for 159 bars each.
Olias,
Not to put words in the other poster's mouths, but, in my opinion, I look analyzing a system's results compared to a system that is random ala a coin flip. Additionally, what changes/tweaks are available to move my system away from randomness AND are those changes/tweaks actually an improvement or just adding a second component of randomness on top of a primary random component. As Mike said prior, the best systems (if not all) have a fundamental or theoretical basis and proving that basis is indeed an edge is the goal.
As for insights, I'd argue the following:
1) it is possible to have equity curves and trading statistics that are far from breakeven using a random entry (as Mike posted this morning and I posted a while back with far less detail [just profit curves]).
2) I'll let others add their newfound or pre-existing thoughts/insights...
3) there is a bifurcated Elite Trader readership, those that appreciate a good thought experiment and the sharing of knowledge, and those that are stuck in their box, thinking their way is the only way, and would rather attack posters rather than the ideas said posters present.
Hope you continue with this thread, I'm hoping to add to it as time permits.
Cheers,
masterjaz