Trading Lessons/Insights From Coin Flipping

Discussion in 'Risk Management' started by tradingjournals, Aug 31, 2010.

  1. nLepwa

    nLepwa

    You are right.

    Those that don't agree, please play with me! :)

    Ninna
     
    #51     Sep 1, 2010
  2. nLepwa

    nLepwa

    There was no error in my wording.

    Whether you choose your number by hand or randomly (even uniform distribution) is irrelevant since permission to do one implies permission to do the other.

    Ninna
     
    #52     Sep 1, 2010
  3. nLepwa

    nLepwa

    Would you be surprised to hear that you can get higher than 50%?

    Ninna
     
    #53     Sep 1, 2010
  4. Mind explaining how you would beat the approach I described?

    "Choose N1=50 and show that number, flip a coin to decide if N2 is 51 or 49. It should be impossible for them have a chance other than 50% of guessing if N2>N1. Which will lead to positive expectation with the imbalanced payout."

    In PM if you don't want to spoil it for everybody else.
     
    #54     Sep 1, 2010
  5. nLepwa

    nLepwa

    If you always choose the same numbers you're really running the experiment only once and therefore can't draw conclusions about the expectancy.

    What if I have access to a RNG from which I can draw normally distributed numbers between 1 and 100?
    How could I use it?

    If you really want me to give you the answer send me a PM.
    But I think it would be sad as 95% of what you get from the concept (including the fun) is obtained by searching for the solution. :)

    Ninna
     
    #55     Sep 1, 2010
  6. ptrjon

    ptrjon

    I did extensive research into methods to maximize return on a roulette table, which is very similar to any application of coin-flip techniques, because there will always be extra transactional costs, like how in roulette there is the house edge.

    Through all of my techniques that I programmed, or no matter how I spun it- in the long run, the more money you gamble with, the more you lose, and the more you try to mitigate short term risk, the greater chance you have of long term loss.
     
    #56     Sep 1, 2010
  7. rew

    rew

    Sure. I'll always pick 2 and then randomly and with equal probability select either 1 or 3. I always show you 2. Obviously you can be right only half the time. So my expected return per bet is $1.
     
    #57     Sep 1, 2010
  8. rew

    rew

    Well, now you're changing the game. Are the two random numbers always distinct?
     
    #58     Sep 1, 2010
  9. Not changing the game at all. I merely misunderstood it originally. Its actually a lot simpler than originally thought, going by the original description of the game.
     
    #59     Sep 1, 2010
  10. u21c3f6

    u21c3f6

    Yes. I believe there must be some miscommunication of the rules and/or how the game is to be operated.

    Joe.
     
    #60     Sep 1, 2010