> I never made my money in this game being "right" more > than "wrong"... I always made my money by being more "right" > than "wrong"... Hehe, exactly ! R = "right" / "wrong"
I was originally gonna ask everyone (politely) to shut up.. cos this thread is giving away a lot of 'secrets'...'secrets' that actually help make money... but, then, after considering it a little more, i'm pretty sure most people will just ignore it and keep searching for ever more exotic entry techniques (OOs spring to mind) for their edge..
It does not matter if we talk about it because 99% won't be able to do it anyway! Dark gave away what I feel to be one of the keys to it all and yet people will still indulge their psycological shortcomings by peeling off... And lpcarmgo is dead on with taking a statistical macro view of it all, but they will still stay attached to the micro results and as a result get in their own way... That is the great thing about this game You can give them the "secrets" and they will look right past them looking for something more intricate and artificial... Like that motorcycle Zen guy says "Truth knocks on your door and you say; go away I am looking for the truth and so it goes away!" PEACE and good trading, Publias
>>The point is that, there is more than one way to achieve a given return on investment:<< First I would like to say. I appreciate your viewpoint. However, I need to ask you this: Not trying to be sarcastic here. What part of my commentary made you think that I was saying, that there wasn't "more than one way"?? My overall comments were NOT in reference to your meticulous mathematical approach to Investing. They were in response to the other posters statements on Trading. The idea of even suggesting 50/50 chance is an acceptable ratio for placing a trade. Secondly, I'd have to say, "Slow down Tiger..." this statement by you: >>If you make the calculations for your system, youâll see that the EROI per trade is 0.74%.<< Remember this quote, it helps me and will definitely help someone like yourself, someone obviously very analytically minded...... "Assumption - - is the Mother of All Fuck ups" ;-) This is not "MY" system. Again, this is a system I'm testing aside from my own. The very small tid bits of info that I offered up in response to the other poster was there to give a construct by which he could frame what I was talking about. Now you are quoting me EROI percentages on this system based on a few values expressed in a quick and dirty post...LOL Don't get me wrong I see that you've put a lot of thought into your calculations and obviously rely heavily on them to make Investment decisions. I respect that. But before you can start telling me about EROI on a system you know nothing about....... At least ask me for all the details about it! Lastly, I don't expect you to answer this, but I think I need to know for my own edification. Do you Trade for a living? Is it your sole source of income? -momo
Nitro- Never said anything about a "Holy Grail" Was simply giving one example of a system being tested. Sounds like you never test any other trading systems. Thats fine, you might have found the one that is working for you currently. Me, I'm always interested in different strategies and learning new and different approaches to trading. Hell I'm even considering cracking open my old college math books after L's post to me... If you want to know my thoughts on the Holy Grail deal just click my Nic and read my bio..... I've got your Holy Grail right there...... ;-) -momo
Momo, I was not attacking the system you were talking about and I donât want to start a flame war. I just happened to find this topic interesting and maybe got carried away a little, but it was not my intention to criticize you in particular. Please accept my apologies. > This is not "MY" system. Again, this is a system I'm testing aside > from my own. The very small tid bits of info that I offered up > in response to the other poster was there to give a construct > by which he could frame what I was talking about. > Now you are quoting me EROI percentages on this system > based on a few values expressed in a quick and dirty post...LOL > Don't get me wrong I see that you've put a lot of thought into > your calculations and obviously rely heavily on them to make > Investment decisions. I respect that. But before you can start telling me about > EROI on a system you know nothing about....... > At least ask me for all the details about it! Maybe I should shut up, but I think somebody may find interesting how to find the expected EROI for a system with known characteristics: Providing that you agree that the formula: EROI = t( RT + T â 1) is true.. For the system you are testing: T = 0.95 R = 2.0 since you are winning 0.10 and losing 0.05 (RT + T â 1) = 1.85 We donât know t, which is the profit target % per trade. But since we know that the target is 0.10, we can calculate t for a few stock prices: price t 1 t=0.1 2 t=0.05 3 t=0.03333 4 t=0.025.0 5 t=0.2 6 t=0.1667 25 t=0.004 I included 25 because it is close to the price of the QQQ. This means that the EROI is 0.74%. Or $74.00 per each $10,000 or $185.00 for each 1,000 shares. > Remember this quote, it helps me and will definitely help someone like yourself, > someone obviously very analytically minded...... > "Assumption - - is the Mother of All Fuck ups" ;-) You are right, I assumed a few things: I donât know if the 0.10 and 0.05 cents include commission. Assuming they do and that you always buy the same dollar amount youâll double that dollar amount each 270.30 trades or each 77 days ( 3-4 signals per day ). > Lastly, I don't expect you to answer this, but I think I need to know for my own > edification. > Do you Trade for a living? Is it your sole source of income? No, I trade only 1.5 hours every day, before going to work. I work full time as a Systems Architect. Another of my pet statistics is that I make 5x trading than at my work, but I donât enjoy trading 5x as much.
Lcarmgo, I think you will like this It is a random equity curve generator... http://www.hquotes.com/tradehard/simulator.html PEACE and good trading, Publias
And a very interesting one at that. One thing, though, which may jar sensitivities - you state : "My investment style back then was much akin to walking into a Vegas casino and placing all my money on 17-red and letting it ride. Fortunately for me, the ball landed on my number every time. Year 2001 was paid for, and I hadn't lifted a finger to do any work." 17 is black, not red
L- np. In fact, I needed a bit of a refresher on the mechanics of the EROI. I'm sitting here with calculator and pencil and paper in hand! ;-) -momo