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vortexpme Aug 12, 2019 4:31pm | Post# 1

probability check
 
dear trader,

if you enter the market randomly with tp. and sl. +-20 pips for example you will after few amount of trades get the result of 49.5 to 50.5 ~ win to loss ratio... i tested it like 1000 times

now i have a question and you maybe tested it already or can help me answer it kindly??
(or have the possibilty to test it)

Its somehow in my head and i dont know but it seems logic but you never know...... so for example:

If you look at a series of 10 trades... it should probably be 5 wins 5 losses with 1:1 RR - of course its sometimes 8 wins 2 losses or 3 wins 7 losses etc. But in the long run its almost win and loss 50% ~

I thought what if you trade for example 2 trades lot size 0.01 RR 1:1 20 pips, now both lost - now you increase lot size to 0.1 and trade 8 trades! Now you have traded 10 trades, you continue now to reduce lot size to 0.01 and trade again till 2 losses apear then you increase lot size again to 0.1 and trade 8 trades...

Lets say you do it with 500 trades! Your win rate should be around 50%~ ? Right ? Cause you did 500 random trades but cause u let out 2 first losses the average win amount should be bigger then 50 %!

Why? If 2 trades out of 10 already lost -> and you continue trading 8 further trades (random) in the long run you should have won more trades with 0.1 lot size then lost with 0.1 lot size! Cause in average long run you should lose and win 5 and 5

So to speak
2/10 trades 0.01 lot
8/10 trades 0.1 lot

Means out of 10 trades, average win is 5 trades and 5 loss
So in this theory in the average term you should win 5 trades with lot size 0.1 and lose 3 trades lot size 0.1 + 2 trades lot size 0.01

Has anyone ever tried something similar and has some review or information to it ?

So you start trading with lot site 0.01 and if 2 losses in a row appear you increase lot and trade another 8 trades.
Then you go back zo 0.01 lot size and trade till 2 errors appear in row, increase lot to 0.1 and trade 8 trades again .... so in the long run its 50:50 but im not quite sure if the average amount won is 50:50-> could simply be more

If you would lose 6 trade out of thes ten! :
Then you would have lost
2 trades 0.01
4 trades 0.1
And won
4 trades 0.1

So basically you lost 60 % of the trades but the money you lost is 50:50~

So if you would have won 5 out of 10 trades (which should happen in the long longe long run)
Loss:
2 trades 0.01
3 trades 0.1
Won:
5 trades 0.1

So basically if it would have been 20 pipps sl tp
You would have won 100$ and losst 64 $ with an RR 1:1 and an average win of 50% which means above average win

Idk but if you could help me solve this i would appreciate

Or backtest it somehow.

Kind regards

Kind regards

ccr Aug 13, 2019 2:47am | Post# 2

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ionone Aug 13, 2019 3:00am | Post# 3

this is the "gambler's fallacy"
even after two losses the probability of the next trade is 50/50, it didn't go up because you had 2 losses

ccr Aug 13, 2019 3:03am | Post# 4

Please dont forget to sell these too ....

BudSpencer Aug 13, 2019 4:31am | Post# 5

Even if you lose the 1st 2 trades, the chances of the trades remain at a steady 50% anyway (assuming your 50/50 guess is correct). Even if you win 10 times in a row, if you enter the next trade randomly, it remains at 50%. So your expected value remains the same.

Thatīs why martingale does not work with limited funds. Red 10 times in a row on a roulette table does not increase the chances of black. Itīs still 50/50 (slightly less cause of Zero or Double Zero)

andoseg2 Aug 14, 2019 4:01pm | Post# 6

The only way to "beat" the Market maker is to increase the winrate. And for increased winrate you need to decipher Market maker moves. After you respect the moves of MM and accept the fact you are the second place always in trading, you will start make money. Majority think and trade like MArket Maker and this is why they end being fresh flesh for big sharks. You do not need to trade like MM, you need to respect it and follow it. Simple. Start to follow the Market Maker and avoid crap theories of gambling, martingale, grid, averages and other bullshits.


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