Hello,
I study statistics and forex is my hobby. I would like to share my observations and analysis of price action, money management and other stuff related to trading that can be quantified and analysed.
This is an additional motivation for me to learn R - statistical programming language.
When I publish some chart behaviour analysis it means I have script ready to run. I can than run it on any pair. So if you like something you see, and would like to have your pair tested - let me know.
If you have Idea of your own - something to test - let me know, I will see what I can do.
Also please
If you like my thread - say it to keep me motivated
If something is not clear - ask. I want to learn to communicate clearly
____LET THE MAGIC BEGIN____
Story #1: beat the biggest banks with your 51% success rate.
First thing I would like to share is probability of "general success".
There is a concept of random walk exploring your chance to beat your opponent in coin throwing game. Imagine you and your friend have $50 each and you throw the coin.
Heads - you get his dollar, tails - he gets yours.
In the beginning there is equal chance for both of you to win (i.e. leave another person without money).
What if you have $60 and he has $40?
Than you have 6/10 chance to win.
But what if coin is rigged and there is 51% chance to get heads and only 49% to get tails?
If initially you and your opponent have $50 each
well than you have 88% chance to beat him.
I prepared a table showing sample games:
Each row represents different amounts of money you may have (10, 10, 100 and 100) and different amounts your friend can have (10, 100, 1k and 1m).
Columns represent different coins (51%, 52%, 53% and 54% probability of getting heads = you are taking $1)
What does it mean in terms of trading?
If each of your setups was statistically 51% likely to win, and you used only 1% of initial capital per trade,
You would have 98% chance of multiplying your initial deposit 10 000 times
and only 2% chance to blow your account. That's how easy it is to win trading game.
I know you may be tempted to increase your stake as your deposit grows, but don't get "fooled by randomness". I will elaborate on it in my second post.
If you want to comment on anything else than increasing stake as you play - please do it now
Please don't say it would take forever to win $1000000 one by one...
I study statistics and forex is my hobby. I would like to share my observations and analysis of price action, money management and other stuff related to trading that can be quantified and analysed.
This is an additional motivation for me to learn R - statistical programming language.
When I publish some chart behaviour analysis it means I have script ready to run. I can than run it on any pair. So if you like something you see, and would like to have your pair tested - let me know.
If you have Idea of your own - something to test - let me know, I will see what I can do.
Also please
If you like my thread - say it to keep me motivated
If something is not clear - ask. I want to learn to communicate clearly
____LET THE MAGIC BEGIN____
Story #1: beat the biggest banks with your 51% success rate.
First thing I would like to share is probability of "general success".
There is a concept of random walk exploring your chance to beat your opponent in coin throwing game. Imagine you and your friend have $50 each and you throw the coin.
Heads - you get his dollar, tails - he gets yours.
In the beginning there is equal chance for both of you to win (i.e. leave another person without money).
What if you have $60 and he has $40?
Than you have 6/10 chance to win.
But what if coin is rigged and there is 51% chance to get heads and only 49% to get tails?
If initially you and your opponent have $50 each
well than you have 88% chance to beat him.
I prepared a table showing sample games:
Each row represents different amounts of money you may have (10, 10, 100 and 100) and different amounts your friend can have (10, 100, 1k and 1m).
Columns represent different coins (51%, 52%, 53% and 54% probability of getting heads = you are taking $1)
What does it mean in terms of trading?
If each of your setups was statistically 51% likely to win, and you used only 1% of initial capital per trade,
You would have 98% chance of multiplying your initial deposit 10 000 times
and only 2% chance to blow your account. That's how easy it is to win trading game.
I know you may be tempted to increase your stake as your deposit grows, but don't get "fooled by randomness". I will elaborate on it in my second post.
If you want to comment on anything else than increasing stake as you play - please do it now
Please don't say it would take forever to win $1000000 one by one...
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