I recently had a series of unpleasant exchanges with some ET members in which I was accused of being a crank, and I thought the same of them (and still think so). But it got me wondering: have any other members here experienced something similar? It turns out there is a whole history of crankism in many fields. Offhand one would think an exact field of study like mathematics with its rigid definitions and rules of proof couldn't possibly be subjected to crankism, but one would be wrong in that assumption. Here's a book on cranks in mathematics: http://www.amazon.com/Mathematical-...=sr_1_2?s=books&ie=UTF8&qid=1322136563&sr=1-2 One wonders just how an individual goes off the rails to be a crank in exact fields like math and science, but it certainly makes the deep divisions in politics and religion more understandable. My focus in this thread is restricted to cranks in trading. Any other horror stories of dealing with cranks here or elsewhere as it relates to trading?
Haha... I'm staying out of all discussions regarding math on this board (there are other places better suited for that), but I do find it funny that there is so much argument over relatively simple concepts. However, as I cherish my sanity, I will not get involved....
A proof you gave in the other thread about the risk of ruin is highly cranky and indicates lack of understanding of the math of infinity, the difference between dependent and independent variables and of circular references. In the other thread you presented a proof based on mere symbol manipulation, out of context, that when q > p, the probability of not getting to capital T when starting with capital C but dropping to X instead is equal to 1 when T is approaching infinity. If you go to a physics or math forum and you say that you will be called a crank. Check this out: 00-00 = 00 Do you understand that? Approaching infinity and setting a variable equal to infinite, which is what you have done to get the limit, are two different things, substantially different. How can you in the world set a variable T = oo and then claim that the risk of ruin is 1? Do you understand what does P = 1 mean? I have a question for you: how much you think one should lose to be left with X capital after reaching infinite capital T? http://www.elitetrader.com/vb/showthread.php?s=&postid=3369049#post3369049
Thanks for posting. You've given us a textbook example of crankism: somebody who thinks he understands limit math but clearly doesn't. "I have a question for you: how much you think one should lose to be left with X capital after reaching infinite capital T?" Who said you ever reached "infinite capital"? T is clearly defined as a target. Just because you have a target, there's no guarantee that you'll ever reach it. The whole point of calculating risk of ruin is to determine the probability of failing to reach your target. The main variable in the presentation I posted is clearly C (the current bankroll). The target bankroll is a variable in the sense that the gambler can choose it. The same with X; although X is often just set to zero for convenience, I wanted to present the general case so the gambler can decide for himself what X should be (e.g., bus fare home after tapping out in Las Vegas). If the gambler/trader decides he wants a target with no limits, then clearly T must be allowed to go infinity, because that is what "no limits" means.
It is amazing how much contention there is over basic mathematical concepts here in ET. I often why people with poor math skills assume they can make it as traders. It's not as easy as buying a lotto ticket.
If you don't understand the circularity/contradiction, then it means you are having serious comprehension problems. You calculated the probability of failing to reach a target T by assuming that this target T approaches infinity. It is like in physics trying to calculate the probability of the failure of reaching a finite time t with a vehicle by letting t approach infinity. I can't make it simpler for you; if you don't understand it, then you got serious problems. You ought to talk to a professional.
"I can't make it simpler for you; if you don't understand it, then you got serious problems. You ought to talk to a professional" "If a government tries to create a surplus, usually by means of taxation, when there is equilibriium between pricate savings and investment, necessarily you get a trade deficit because there is no incentive to produce any longer. This is all math, first year economics. " I think u have hubris issues. what is the solution? check your own writings which mentions a possible solution.
Definitely crankspeak, isn't it? This person has no clue about basic math yet projects that onto others as their flaws. Sad.
Actually I calculated the probability of failing to reach the target T as R{T|X|C} = ((q/p)^(C-X) - (q/p)^(T-X))/(1 - (q/p)^(T-X)), (assuming p does not equal q). This derivation has nothing to do with assuming T approaches infinity. That comes later. If you didn't have serious comprehension problems, you'd have realized that on your own.