Do you have a EDGE over the market?

Success in the next spin or trade has absolutely nothing to do with previous one or one hundred or one million flips or trades....

There will always be a 50/50 chance either way.

 

Your calculations are correct. If you assume that the market is random there is absolutely no mathematical way to increase your "Edge", no matter what you do in the long run the result will be 0 and it does not even take into account commissions and slippage.

The whole idea of having an edge is to be able to predict with certain degree of accuracy the direction of the market. There is no edge in mathematical tweaking of entry, stop and profit targets if it's based on the assumption that the market is random.

 

I think you are wrong.

If your chances are 50/50 but you make 100% return when you are right and lose 50 % when you are wrong, on a system that is 60-70% right, on average you will be soon be making 3 to 5% profit in every trade after comm and that percentage will only increase with time because the numbers or edge are on your side.

In this case your system can be probably 40 percent right and still make money.

 

Yeah but if your entry is truly random your chances are 50/50 to make 50% and lose 50%, they are not 50/50 to make 100% and lose 50%. Your chances to make 100% and lose 50% are are 33.33/66.66 which in the long run will still be 0 before slippage and commission.

In other words if your random entry is $100 the price has equal chances (50/50) to hit $99 or $101 but it's twice as likely to hit $99 before it hits $102, it's twice as likely to hit $101 before it hits $98.

 

very well said, I am assuming market is random, to argue if market is random or not will be off topic here.

Just want to hear from others do you agree that there is no other way to increase the edge other than predicting the market.

the problem Profit > Stop loss I have cover that a few times so not going to touch on that again

 

well said you read my mind, finally someone understand what I am trying to said

 

You are correct if you don't have an edge to bring both results to a real 50/50 chance.

 

What you are looking for is called OBE.

If you are playing my game you follow this edge to the T.

It stands for

Overwhelming Body of Evidence.