Actually it does. Major currency pairs are not roulette and tend oscillate over long periods of time. Practicing Mr. double's startegy for the past 6 years would have made you more money than any other FX trade idea. The key to trading carry positive positions is that you must believe the spread will WIDEN or at least remain stationary. With the lift of ZIRP that no longer the case in GBP/JPY so the edge may disappear soon. Anyway do not poo poo his ideas. They may sound retarded but at highly underleveraged basis they can be a very effective way to trade FX.
Note: I am not advocating the Martingale. However, I would like to point out the fallacy of the discussion of the Blackjack scenario. Part of the house's edge in BlackJack is that the risk to reward ratio is 1 to 1 unless there is an actual BlackJack and then the player can win 3 to 2. In trading the idea is to let a trade run when it is a winner and create a much higher reward. Using low leverage and adding positions is a unbelievable huge edge and realy does not have anything to do with Blackjack. Trading and Blackjack are totally different. Thanks for reading and considering. Edit: I forgot you were mentioning roulette, but the discussion is somewhat the same.
Nope. How about going long when Euro was near .88 and holding/pyramiding until 1.34 then flipping your position and repeating back down to 1.20 would have probably made you tons more. In any case, you tell Mr. Double to give me a call me in 6 years.
They are nothing alike, the house edge in roulette is permanent and unchanging; in blackjack the edge can shift to the player at the right moments. Again, making miniscule bet sizes cannot convert a losing strategy into a winning one, all you are doing is delaying the inevitable and maximizing how long it takes for you to lose your money eventually. The only case you can make for such a betting strategy is to say, for example, if someone were to bet you $500 that after a minimum of 500 bets placed, with no maximum limit to number of bets, that you couldn't come out ahead playing roulette -- then, with such parameters, you could most likely come out a winner given a million chip bankroll and a 1 chip minimum bet. You could say that such a case is analagous to how most run of the mill money managers happen to "succeed" and even retire on wall street; in this case, beating the game over the long run is not the goal but instead you win by just showing a temporary positive, thereby enabling you to gather opm, ride your "luck" as long as it lasts, and cash in before the long run catches up with you. Rinse and repeat.
in casino games you win or lose one unit per one unit bet generally. trading is not analogous to casino games due to this fact. one wins or losses multiple units per unit bet due to leverage and continuous runs in the same direction. one can bet one unit and win 100 units. therefore, martingale with proper position sizing can does work when applied to an oscillating system. how am i wrong?? thanks, surf
Conditional probability governs 21 play. Leverage has nothing to do with it... so disregard the above nonsense by the hydroencephalic. Continuous runs? omfg. Conditional probability doesn't govern trading. Martingales suck, less so in 21 than trading. Edit: It would be quicker to relate your correct points: 0 Your leverage comment is laughable. It is acceptable to increase bet size into losers in systems governed by conditional prob., such as 21. Variation in bet size is paramount to success in any such system. Financial markets? No.
i ask mr.arb the following question--- after x down days ( insert number ) in an index, can it be shown that the next day has a higher probability of being up based on historic precedent? if the above question is answered in the affirmative, then why cant the theory in my original post be shown to be accurate? in addition, why is the leverage comment nonsense? one collecting numerous units from a single unit bet due to leverage and runs makes sense. this does not happen in casino games. surf ps. please cease the name calling. i respect you, your knowledge, and experience, riskarb, and am sincerely interested in your thoughts .
The above question proves your ignorance. Your friend is a classic example with the Dec 1100P debacle. I'll be happy to stop referring to your condition. Thanks. A Revere count of >8 offers a clear edge in 21; 10-factor mathematical-certainty based upon 3:2 payoff on BJ. 8 days lower does not mean a phucking thing.
the facts are, he would have survived the debacle had several proper things occurred with the clearing house/floor on that fateful day. surf