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Old Jun 1st, 2011, 04:36 AM   #667
oilfxpro
 
 
Join Date: Oct 2007
Location: london
Posts: 1,593
Quote:
Quote from Butterball:

No he can't. A random market by definition doesn't offer any alpha to be captured by even the most skilled trader. In the best case in a perfectly efficient market (according to the EMH) all there is to capture is market beta, e.g. the S&P500 performance.

Factor in commissions and slippage and your highly skilled trader is losing money in a perfectly random market.
What is money management?Isn't it betting a % on every trade?
You couldn't devise a betting formula to beat zero sum outcome?

I did point out a 49 % hit rate system on random charts ,using specific criteria.
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Old Jun 1st, 2011, 04:53 AM   #668
Visaria
 
 
Join Date: Sep 2004
Location: London, United Kingdom
Posts: 5,174
Quote:
Quote from oilfxpro:

If you use a 50 /50 system , 49 % used in this method, your 50 % hit rate will come back.

There is random distribution of profits and losses , so your system will revert to 70 profits/30 losses at double the lots.

Some of the day trading systems around have 20 % hit rate, they are not suitable for increasing bet size.

This sort of money management can have many complex variations , they can turn random systems into profitable systems.
This is nonsense. If it were true, why bother with 2x position size, why not go for 10x position size since you "know" you going to have mean reversion .
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Old Jun 1st, 2011, 05:20 AM   #669
oilfxpro
 
 
Join Date: Oct 2007
Location: london
Posts: 1,593
Quote:
Quote from Visaria:

This is nonsense. If it were true, why bother with 2x position size, why not go for 10x position size since you "know" you going to have mean reversion .
The important thing was having a 50 % system , sooner or later it will revert to mean.The problem of not reverting to mean arises with some of the crappy systems.

It might not with the next 100 trades , but surely with the next 200 , or 300 trades.

The idea is to keep increasing bet size, bets don't have to be double , they can be increased and decreased in different percentages , and various break-even exits can be implemented , eliminating the need for increasing bet sizes.

A clever money management system can beat random markets.
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Old Jun 1st, 2011, 05:58 AM   #670
oilfxpro
 
 
Join Date: Oct 2007
Location: london
Posts: 1,593
Quote:
Quote from achilles28:

The market is not efficient, boys and girls.

97-99% of market volume is speculative. Put the pieces together.
China is holding $3tn usd for speculation .The world is hold trillions of euros for speculation.

Go back to your type of threads , I read on you history the type of threads you post on , most at a glance had nothing to do with trading.They are entertainment threads .

97/99 figures come from plucking in thin air.
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Old Jun 1st, 2011, 06:01 AM   #671
achilles28
 
 
Join Date: Apr 2005
Posts: 8,109
Quote:
Quote from oilfxpro:

The important thing was having a 50 % system , sooner or later it will revert to mean.The problem of not reverting to mean arises with some of the crappy systems.

It might not with the next 100 trades , but surely with the next 200 , or 300 trades.

The idea is to keep increasing bet size, bets don't have to be double , they can be increased and decreased in different percentages , and various break-even exits can be implemented , eliminating the need for increasing bet sizes.

A clever money management system can beat random markets.
That's not trading. That's something akin to martingale-ing. And the operator needs a huge account for that to yield an acceptable return. 200 trades is a long time to wait before recouping losses. Returns are minimal. What? 30-50% a year? If that?
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Old Jun 1st, 2011, 06:17 AM   #672
oilfxpro
 
 
Join Date: Oct 2007
Location: london
Posts: 1,593
Quote:
Quote from achilles28:

That's not trading. That's something akin to martingale-ing. And the operator needs a huge account for that to yield an acceptable return. 200 trades is a long time to wait before recouping losses. Returns are minimal. What? 30-50% a year? If that?
30 to 50 % would solve the problem of the 95 % club , and place most along the super traders category.

You forget most of what we call trading is gambling and martingal-ing is part of it.

Probably get around 30 to 50 % a year.
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