I haven't ignored the thread. But you're mixing the practical with the theoretical here just as you did there, and your understanding hasn't advanced at all. Coin flips are not trades. You don't win or lose anything with coin flips. You do with trades. This is not complicated. As I said, it's simple arithmetic. No paradox. Just 1+1=2.
OK, quick answer then, no coin flips, just trades : dbphoenix, with $100,000 equity, sits in a room trading commission and slippage free (that much you've already ceded), using random entries and the assumptions previously outlined, and does 2 trades, each time risking 1% of equity, with r:r = 1. What would you expect his account to look like after the 2 trades? Give me a figure.
There have been a number of assumptions "outlined" and I don't know which you're referring to. And you don't say whether the trades are losers or winners or one of each or in what order. But if the profit target is the same as the stop, your question has already been answered. Several times. Traders do not bring their account balances back to zero after each trade. If you want to carry on an intellectual exercise, you're going to have to do it without me since I'm interested only in practical application. You never really understood what acrary was talking about, and I see no reason to expect that you'll understand what I'm talking about, not because you're thick, but because we're talking about two entirely different things. If you don't see that, then I guess we'll just have to get on with our lives somehow.
What specifically is unclear in my description? For a question on expected value, should it matter? Indulge me with just a few more keystrokes - what is that answer? Neither do I in my calculations. My question was very practical - one any hedge fund manager would ask of a prospective trader. I fully understood what acrary was talking about and acrary was wrong, as you are. Let him, or anyone else, come and say otherwise. Peace and good trading to you, dbphoenix (thanks, JC)
Guess what? I'm actually to kinda believing in this bs. Exits are really important. Position sizing is even more important. Entries are least important - though being with the trend can definitely push you to being even more net positive. but before, i just repeat that mantra or whatever. but now i think it makes more sense from experience. but it doesn't make it easier to design good trading systems yet.
$90. My twin brother, who is also my business partner, happened to make $10 taking the other side of the trade. Our joint account shows a zero P&L. Next.
Now you make another trade, also risking 10% of your equity, only this time you win. What is your balance now?
DB, Flip the script. It works out the same as when you win on the first trade -- your risking more on the next. Over the long run they will flatten out me thinks, but im not an expert in the field a 'matamatix'... Sub, What happens to your zero expectancy if the highly unlikey event of 15 straight losing trades occur before you get a winner? Will the expectancy still flatten out over a long run of trials??? PEACE and good-speculation...