Can you be profitable with random entry?

Thanks! It didn't turn up when I made the search. The funny thing is: Van Tharps son seems to get the last word on this thread claiming that the system works consistently on some markets.

 

Yes. One position in each market at a time.

 

Here is my guess:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=70673&perpage=6&pagenumber=10

Of course, some conditions would apply.

 

indeed

 

The very first condition (for a random-based system) is we would have to accept :

http://www.elitetrader.com/vb/showthread.php?threadid=70794

 

I use random entries extensively in testing and benchmarking trendfollowing systems, primarily in two capacities:

1. For testing exit mechanisms. A good exit mechanism should be profitable when combined with random entries across a number of markets over time.

2. For measuring the effectivness of entry signals. It's quite amazing how many conventional entry "signals" fail to match the performance of pure random entries.

My results are consistent with VT's claims.

 

I don't see the logic in making a decision based on a coin flip, surely one, who has at least some knowledge about the markets, has more favourable chances using his own brain rather than a thoughtless process.

 

The most secure road to the poorhouse.

PS: That's almost as good as Jack's (as I pointed out before).

 

hush ....
Don't tell anybody about all this. Get rich quietly.

PS: I understand, you can't have been making money for a long time. You would know better otherwise.

 

Nobody is saying that using random entry is a good idea. The challenge is obviously to beat random entry when you design this part of your system.

On the other hand: If making consistent profits (however small) with random entry is possible in certain markets, and if many people trade succesfully with systems have a reliability similar to random entry, then perhaps entry this is not the most important component of a trading system.