Q Basically, a chaotic system generates behavior giving the appearance of complete randomness by means of a purely deterministic rule. ... Scientifically speaking, chaos is only the appearance of randomness, not the real thing. --- Complexification (John L Casti) UQ
My point is if the system is deterministic then any entry would be okay because you know where that system is going to go. But, since the 'market system' is not predictable for any great length of time a 'random entry' will not help you in any sense because the market path cannot be determined. I agree with what you say about TA, I enjoy TA.
I don't think our definition of randomness is consistent here. To me, randomness as it applies to the market is the random deviation of prices around an average price. For this reason, perhaps, people are lured into using a coin-flipping strategy for entry, supposing that at some point they will experience mean-reversion and, thus, avoid catastrophic loss. However, the market proves over and over again its capability to produce just such catastrophes at all time scales. Therefore, the market is chaotic in nature: although it appears to be wholly incomprehensible it is acting the way it is supposed to act. From this point of view I would agree with your definition ala Casti.
Update at 65 samples Wins: 18 Losses: 47 Win Ratio: 27.7% Longs: 32 Shorts: 34 Ratio: 48.5% Net: -27 pips (net of interest, spread, slippage)
2 cents: imo, the entry part attaining 48.5% would be quite normal and acceptable for this system. Perhaps certain improvement on the exit part (such as multiple contracts with various different targets) could be considered, particularly when the current targets of loss and profit were not determined/ based on any backtesting results.
Hey bdixon, Thank you for your clarifictions. I also read your further posts. Personnaly I don't have any theory about the market. I try to take it as it comes. In fact I also make my money with things like streaks or runs or whatever you like to call it, as long as they are profitable. Now taking this simple statement on to a mathematical plane becomes much more problematic. As I said, I don't know whether the market is deterministic or of its chaotic variety or else stochastic. Applying statistics and so to the market could make some sense if you have any basis for it. Random processes, probability theory and so on are rigorously defined mathematical concepts. You can apply these "rigorously" to problems, most often theoretical, provided you know those properties as required by your mathematical tools. Another possibility, but a much more tricky one, is to attempt applying probability theory and statistics to problems you don't comprehend, partially or totally. For example a deterministic system, possibly a chaotic one, that you don't have a model of, or perhaps only an incomplete model. Possibly this system might indeed have some stochastic components mixed in. This is how I see the market. You will understand that I am a little wary if I encounter too obvious highbrow stuff in a "Flip a coin for entry thread" as related to markets. Be good, nononsense