Discussion in 'Trading' started by Commisso, Jan 22, 2002.

  1. candle, if you lose $1.00 on your losers but make $2.00 on your winners, then in actuality, for all intents and purposes, you are picking more "winners" than "losers". your "winning" odds in this particular instance you cite is actually greater than 50%. you must define "winners" and "losers" with more depth and sophistication than merely with a + or -. do you understand?? :-D
    #41     Jan 23, 2002
  2. threei & commisso, if the "odds are not random if there is an edge, their disctibutiuon is, so outcome of each given trade is not predictable",

    i think it would be safe to say the odds in this case are >50% and are predictable at least to this extent.
    #42     Jan 23, 2002
  3. Brother Protrader, you are confusing the probability of winning or losing with the size of win or loss... the weighted combination of these variables produces expectancy.

    Sincerely and with brotherly love,
    #43     Jan 23, 2002
  4. oolarinm


    Actually , the outcome of a single trade is random as with the coin example. But if you bias a coin say towards heads then the probability of it turning out heads on a single toss is > 50% even though the outcome is still unknown . I don't think it is importand really when it comes to trading if a single trade has > 50/50 chance as you are not only going to trade ONCE and the outcome is still unknown no matter how much analysis or backtesting you've done .
    #44     Jan 23, 2002
  5. tom_p


    ProTrader1 : No, the odds remain 50%. You are just as likely to get either a heads or tails. each successive outcome (coin flip) is independent of the previous flip.

    If this did happen, not only would the next flip not forecast an increased likelihood of a tail, but I would offer the past results as awfully strong evidence that the coin wasn't fair and bet heavily against tails!

    (Adapted from the writings of Don Schlesinger)
    #45     Jan 23, 2002
  6. dozu888


    Since there are so many probability experts here, let me give you a quiz:

    If John shoots at a bird, he has 60% chance to hit it;
    if Jane shoots at a bird, she has 70% chance to hit it;
    if John and Jane shoots at a bird at the same time, what is the probability the bird gets hit ??
    #46     Jan 23, 2002
  7. 88%
    #47     Jan 23, 2002
  8. tom_p


    Assuming it's the same bird :
    Prob(bird hit) = 1 - Prob(both miss)
    = 1 - (0.4)*(0.3)
    = 0.88

    #48     Jan 23, 2002
  9. Rigel


    Just a guess based on AVERAGE speed and distance calculation.
    92.85714% chance of hitting the bird.:)
    #49     Jan 23, 2002
  10. Commiso,

    Good topic. With regard to trading the eminis and your topic of luck, I would say that on a TICK BY TICK basis (the extreme micro level) there is no market more random than futures.

    FWIW, ultra tight stops beat me up. The easy and speed of Globex can really encourage over trading. It has not been until I have severaly limited my trading that any success has come. All of my big loss days have come with lots of trades or trying to scalp. I do not think it is possible to scalp on Globex. The randomeness will eat you up.

    I now limit myself to 1 or 2 trades per day, and not everyday. The key is to see some "bigger picture" concept and make the one bet with a stop in place. Such thing as time of day seems to be an even bigger factor in the futures market

    My 2 cents, trade single lots until you show yourself profitable. This is a different beast.


    #50     Jan 24, 2002