Commissions can be big when you are just starting out. My first year I lost $10k, $7,500 of that was commissions alone.
With -1,-1, you lose $2 With -1,1, you break even With 1,-1, you break even With 1,1, you win 2$ The odds are 50/50 in this case. In other words your expected outcome is $0, with you chance of losing $2 being equal to winning $2. No matter how many coin tosses you tried, the expected value would still be $0, with an equal chance of winning or losing money. That is in effect 50/50. I see what you're saying: that the odds of actually making a profit in this scenario is only 1/4. But the odds of losing money are only 1/4 also: since the odds of winning and losing are equal, I think this satisfies the 50/50 that the poster was talking about.
wrong. Notice I specifically mentioned compounding. Now run it again under that assumption (if you are trading, it's a pretty good assumption). You can also assume just about any fixed% wager return under this scenario, as it will not change the probability of the outcome, it's more clear on larger returns; say +/-50 or 100%. Assume your initial dollar is all you have and there are two possible outcomes for the coin toss as outlined in the truth table. What is the probability of a successful return (in excess of your wager) at the end of two tosses? Not 50%.
It's like any other game, the newbies are completely oblivious of how reality operates then they naturally tend to fail.
Because of the cost of entering in and out of the mkt. 1) If you enter at market you are entering at a price worse than (bid + ask) / 2 2) If you enter at limit your average fill price will be worse than (bid + ask) / 2... often times worse than just sending a mkt order.
You would be losing every time you enter a trade through spread and commissions, when in case of a noob futures trader, he would be down couple ticks and when it goes down an another tick or two he would get scared and close out. Then he watches as the contract go his way and beat his desk in anger and thus, the start of loser mentality.
Who said only long or short? The market can go up. The market can go down. The market can go sideways The market can become choppy or chaotic, stopping you out and THEN turning profitable. Money management is a big part of this.