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Higher Edge within a Single Candlestick

  • #581
  • Edited Sep 27, 2017 1:19pm Sep 26, 2017 4:03pm | Edited Sep 27, 2017 1:19pm
Quoting kprsa
His point is that if the sequence of roulette rounds is a random walk, there is an expected traveled distance (imbalance of number of reds and blacks, edit: ignoring the "spread", the zeros) away from an arbitrary reference point (and the math says it's proportional to the square root of number of rounds). Cheers, k
Quote
I agree that I couldn't. Luckily, Einstein did... k
But wasn't it Einstein who said that the only way to beat a roulette table was to steal from it?

Mike Shackleford aka the 'Wizard of Odds' is an adjunct professor in actuarial science and mathematics at the University of Nevada, and is also an internationally acknowledged expert in casino games. Here are his comments about using betting systems to beat games like roulette.

Of course I'm aware of systems that exploit biased roulette wheels, or like the 'Eudaemonic Pie' that use physics (ball release speed and trajectory, angular velocity of the wheel, etc) to gain an edge. But there are also plenty of folk who claim that they have a purely mathematical system that can beat the house edge; I suggest that the reader considers their possible motive for doing so.

If somebody believes that they have such a system, let's code a simulation using a reliable RNG, and check the outcome after a billion 'spins'.
  • #582
  • Sep 26, 2017 6:50pm Sep 26, 2017 6:50pm
Quoting RondaRousey
{quote} The crucial point is that if you are a noob, you won't be able to compound. It does not matter how big your account size is. You are still a noob. You are handicapped as a noob. AND most people don't know that they are noobs until they have a huge drawdown.
if you dont like him just ignore him and move on. let him help others and share his knowledge
  • #583
  • Edited 10:24pm Sep 26, 2017 9:55pm | Edited 10:24pm
Quoting kprsa
{quote} His point is that if the sequence of roulette rounds is a random walk, there is an expected traveled distance (imbalance of number of reds and blacks, edit: ignoring the "spread", the zeros) away from an arbitrary reference point (and the math says it's proportional to the square root of number of rounds). Cheers, k
There's no such thing as "expected traveled distance (imbalance of number of reds and blacks,...) with random, gamblers fallacy right there.

Quoting hanover
{quote} {quote} But wasn't it Einstein who said that the only way to beat a roulette table was to steal from it? Mike Shackleford aka the 'Wizard of Odds' is an adjunct professor in actuarial science and mathematics at the University of Nevada, and is also an internationally acknowledged expert in casino games. Here are his comments about...
Spot on.

What's worse is to cast this believe that some secret money management will somehow bring in the profits.

Quoting RondaRousey
{quote} The crucial point is that if you are a noob, you won't be able to compound. It does not matter how big your account size is. You are still a noob. You are handicapped as a noob. AND most people don't know that they are noobs until they have a huge drawdown.
Really. Potential huge drawdowns don't make people realise they're noobs, what makes you think actual huge drawdowns make them realise they're noobs ?
  • #584
  • Sep 26, 2017 10:02pm Sep 26, 2017 10:02pm
Quoting CrucialPoint
{quote} 10k USD (NOT Compounded) Minimum Profit of 50k a year. That's 6pips per day. 30pips per week. 10k USD (Compounded) Minimum Profit of 120k a year. That's still at 6pips per day. 30pips per week. I've mentioned this before along the same lines: The average daily range of any MAJORs is around 120pips. If any trader can't (or don't believe) consistently take 6pips out of 120pip range... That trader needs to be brutally honest with himself. Something is seriously wrong if you can't grab 6pips out of a 120pip range. An NO, I don't put a 1pip TP...
Unbelievable.....nothing to add.

GS
  • #585
  • Sep 26, 2017 10:25pm Sep 26, 2017 10:25pm
Quoting CrucialPoint
{quote} I limit my profit per year at around 100%. I could go higher in profit, but it is unnecessary psychological stress I don't need to take on. I don't compound it, again I feel it's redundant unnecessary stress I am not willing to take on. I haven't ran into any problems of not getting filled. 100% is a walk in the park for me. I can sleep well at night with no stress lingering in my mind.

Hi CP,

I remember last time u said it is very possible to make 100% a month? is there a typo on your previous post?


I have been studying your past trade, sometimes your tp and sl is very small , < 10 pips, if the cost of trading is about 1 pips, one will need a hit rate of 55% just to breakeven. From my understanding, you are a discretionary trader that based on mechanical signal, when your system show signal, it is you that decide whether to take this trade. However, I am just wondering no matter what confirmation you are seeking, be it 5 pips , or 10 pips move in one direction before u enter, as soon as you enter, there is a possibility that price will reverse against you.

But from what I saw on your previous trade journal, your hit rate is very high >80%, regardless whether u are trading with trend , range, or counter trend?
How is this possible , or the limited trade journal have plant a incorrect perception on your profitability, do you have a losing day?

thanks!

regards
  • #586
  • Sep 26, 2017 11:39pm Sep 26, 2017 11:39pm
Quoting CrucialPoint
I mentioned that I made money playing roulette. And this is how I made money playing roulette. Because if you draw a reference point. And for each black you draw 1scale down and for red you draw 1 scale up. For 0 you draw the opposite.
@CrucialPoint: This procedure is exactly what a MA does on prize, right? And I guess that it is not enough to just look at the momentum/influx. I'd bet that you also have to establish a moving reference points for your momentum/influx indicator which tells you that momentum is significantly higher recently than it was before some ticks ago. It's not enough to just look at the high positive readings in order to go long?! So, if one wants to trade it would be good to wait for high positive readings of influx where the influx itself just exceeded it's "moving average" ... Just some thoughts.
  • #587
  • Edited 2:05am Sep 27, 2017 1:28am | Edited 2:05am
Quoting hanover
let's code a simulation using a reliable RNG, and check the outcome after a billion 'spins'.
Although it would take too long to simulate 1 billion spins on my PC I simulated what CP wrote:
Inserted Code
prob <- NULL
for (j in 1:1000) {
  success <- 0
  number <- sample(c(-1,0,1),size=1,replace=T,prob=c(0.4864865,0.027027,0.4864865))
  for (i in 1:10000) {
    sample <- sample(c(-1,0,1),size=1,replace=T,prob=c(0.4864865,0.027027,0.4864865))
    if ((number > 0 && sample > 0) || (number < 0 && sample < 0)) success <- success + 1
    if (sample == 0) number <- number * (-1)
    number <- number + sample
  }
  prob[j] <- success/10000
}
hist(prob,n=25,col="darkorchid")
The R code performs 1,000 roulette games with 10,000 rounds and counts how many games out of these 1,000 games we would have won. We just bet for either black or red. And guess what - you only would win about 2 out of these 1,000 games. The distribution of your success ratio is shown below (where a value of < 0.5 means that you lost money).

=== What can we conclude?! ===
To me it is quite evidently that you'll never have an advantage in playing roulette. Thus, CP was wrong (or he just had luck when he played roulette) and I just can support hanover's point.
But does it mean that it can't be done in forex?! No, I don't think so. If (and only if) microtrends in forex exists due to the prize perception of participating traders then we may have an advantage since in these cases the outcome is not random. Additionally, we can change our odds of winning/losing in trading by changing our positions size, SL and TP. In this way I can see how CP can be successful using reference lines.
IMO the reason why traders lose money buying above a MA or selling below a MA is that the MA lags a lot and thus whenever you may have the right condition for a trade a trend may be already over. You will have an advantage when buying above the line as long as an up trend continues. But as soon as prize turns and a new down trend starts, a single reference line can't prevent losing. Thus, I think that the secret is in using tick charts (as it reduces the lag of the reference line, e.g. a MA) and in using more than one reference line ... Any thoughts?
Attached Image (click to enlarge)
Click to Enlarge Name: roulette.png Size: 6 KB
  • #588
  • Sep 27, 2017 4:59am Sep 27, 2017 4:59am
Quoting AntiCre
Although it would take too long to simulate 1 billion spins on my PC....... Any thoughts?
Nice work with the simulation.
In 10,000 spins, betting $1 each time, you should (on average) be down around $270, i.e. the house edge of 1/37 x 10,000, irrespective of whatever playing and/or betting strategy you use. The textbooks say that roulette is a fixed-odds game, because the probabilities are the same for each trial, and trials are completely independent of each other. Most math-based playing/betting systems that are sold, or otherwise touted, are generally grounded in some variation of gambler's fallacy. (as pointed out by skyway in post #583)

I believe that, unlike roulette, markets -- despite being complex -- are not an entirely random walk. Moves are created by imbalances of buying and selling volumes at price levels, and these volumes are caused by belief systems, sentiment, and a host of other factors (I attempted to list some of them here). I've never investigated a 'buy above the line, sell below it' strategy, so I can't comment.
  • #589
  • Sep 27, 2017 6:20am Sep 27, 2017 6:20am
Quoting RondaRousey
{quote} good analysis. Have you considered the possibility that CP is faking his stats?
many cant see crucialpoint is faking so many things.

because of math crucialpoint is a noob.

1200% win he has in a year with small accounts compounding (and this is total minimum profit because of his words, ofcourse he will have extrem much much more when this is total minimum ;-)) .really??
even when someone smart would say it, its difficult to believe, but someone with crucialpoint low skill and experience, its a big joke, his chance to have this is near zero. man, we speak here about the loser crucialpoint, not a smart person who knows math, crazy that he fakes this stupid things and forgot to fake he knows math at least and post so extrem bullshit (maybe he did copy paste wrong parts ;-) ).

he can fake many pictures and accounts, thats what i believe he can do, he wants to pose that he is good when same time he is small loser, thats his way and the biggest possibility why he tries to misleading people here.
but trust to such a unhonest man is something only beginner people can have, when they are extrem greedy when some faker and poser say they have without problems minimum(!!) 1200% each year with small account (so they forget own trading because has only so much less win in comparing and they get crazy and want to know how its done and lose so many time and get total misleading).
so the world works, try to fake big wins and get the greedy beginners without knowing math and baiscs in market and experience. and looks like he got with his fakes many beginners, even after he wrote many bullshit and many told him his bullshit mistakes, many cant see the truth. unbelieveable, no wonder why so many cant get it in the world, when they cant judge such a loser as what he is, only because he posts some stupid articels with content you find in many places, often he has wrong content parts inside and misleading parts or crazy parts .

all what he says looks so fake, so wrong often, complete ignoring math often,.... i have no words how some people really could fall in this bullshit, when its so easy to see who he is. its maybe same people who will fall in pyramid ponzi systems often.
its so hard to see that some people really like to be misleading and other like to follow this people against the wall fully blinded. if something looks faked it is faked, if someone has shown he has no math understanding he has for 100% sure no chance to win extrem. its so easy.
  • #590
  • Sep 27, 2017 7:01am Sep 27, 2017 7:01am
Quoting AntiCre
{quote}To me it is quite evidently that you'll never have an advantage in playing roulette. }
Mathematically, you are correct. However, roulette wheels are mechanical and have flaws if not maintained and replaced. These flaws can create a so-called biased wheel through which an edge can be found over time (as more knowledgeable others have written).
  • #591
  • Sep 27, 2017 7:10am Sep 27, 2017 7:10am
Quoting nonlinear
{quote} Mathematically, you are correct. However, roulette wheels are mechanical and have flaws if not maintained and replaced. These flaws can create a so-called biased wheel through which an edge can be found over time (as more knowledgeable others have written).
Surely, these cases may occur. However, I bet that every casino owner will do everything to fix it as soon as possible (otherwise he would lose money and would go bankrupt) ...
  • #592
  • Sep 27, 2017 7:31am Sep 27, 2017 7:31am
aaaaand the the RELA important talk about edge in candlesticks its gone..


so sad..
  • #593
  • Sep 27, 2017 7:43am Sep 27, 2017 7:43am
Quoting havo
aaaaand the the RELA important talk about edge in candlesticks its gone.. so sad..
Really? It's still about the edge - the reference point ...
  • #594
  • Sep 27, 2017 8:02am Sep 27, 2017 8:02am
Any gamble game is meant to attract losers, because they all are built to keep odds on the desk side.
Gambling does have nothing to do with trading, so there is no point to compare casiṇ's games with trading.
Said that, everything in nature and so in human stuff, does follow a scheme, so do markets and so do even casiṇ's games, otherwise there would not be the possibility to move odds on the desk side and casiṇs would not exist.
The matter is that the scheme is most often not predictable because of synchronicity. Synchronicity is a natural phenomenon and is an unexpected event that is needed to restore the efficiency of the whole system: this is what we define as chaos but it is not randomness; chaos is part of the scheme and is necessary to its existence. As a result it will make the system not predictable on the long run but it allows to see what is going to happen in the very short time period, not always but is enough to follow its evolution.
Of course, it is mandatory to know this scheme, which is simple.
What makes things so difficult to understand is human mind, because it no more educated in the right way since eons; so, instead of struggling with so many fancy indicators or complicated maths calculations, traders should understand how human mind works and thereafter re-educate their mind. This path will aloow everybody to look at charts as they should be looked at and see the truth.
The two biggest issues of human mind are Ego and uncertainty: if you want to understand trading, learn to control your Ego and to manage with uncertainty first, all the rest will come easy.
  • #595
  • Sep 27, 2017 8:18am Sep 27, 2017 8:18am
The problem is many traders don't have a filter for their own system to filter out bad signals with 50% chance. Especially in day trading it is very vital.

Gambling is a series of independent events (thus always 50% chance with coin flip). Completely random trades are the same (no memory). Memory should increase that edge from 50%, right? That is basically the filter, as we know only of 2 probabilities: 50% or != 50%. That's why I always say the chance of success is 50% unless x or y level is reached.

I'd still like to see the higher than 50% chance with just a single candlestick (and nothing more). I've seen this quote in the past (95% of the time price moves from opening ..) but have no idea how to utilize it.
  • #596
  • Sep 27, 2017 8:40am Sep 27, 2017 8:40am
Quoting strongtrader
Any gamble game is meant to attract losers, because they all are built to keep odds on the desk side. Gambling does have nothing to do with trading, so there is no point to compare casiṇ's games with trading.
This isn't exactly true. A successful professional poker player will transition to trading far better than your average person. This is not because the two endeavors have any intrinsic similarities, but rather because the psychological factors that it takes to be successful in trading are the exact same for poker. Things like managing your emotional response to loss. Having a specific approach and the discipline to stick to it. Understanding the nature of a zero-sum game. These are just a few of the similarities.

Poker is an exception because it is not a game that the house employs "to attract losers". It is a game in which the house charges a fee to provide a platform where the participants interact with each other...

... sound familiar?
  • #597
  • Sep 27, 2017 8:42am Sep 27, 2017 8:42am
Quoting mades
The problem is many traders don't have a filter for their own system to filter out bad signals with 50% chance. Especially in day trading it is very vital. Gambling is a series of independent events (thus always 50% chance with coin flip). Completely random trades are the same (no memory). Memory should increase that edge from 50%, right? That is basically the filter, as we know only of 2 probabilities: 50% or != 50%. That's why I always say the chance of success is 50% unless x or y level is reached. I'd still like to see the higher than 50% chance...
There are not bad/good signals, there is no filter that will increase your 50% chances.
You are reasoning with right/wrong mode, there is no right no wrong.
This is how our minds have been educated since our childhood, this is the kind of education you have to get rid of.
There is the possibility to move odds on your side but you will never find it unless you begin to think out of the boxes.
The real problem is that the majority of traders do know nothing about market and still they have an opinion: I began to understand since the day I became aware that i did know nothing and so I couldn't have any opinion.
I began to see since the day I understood that my mindset was not built to trade but to bark like a sheep in the flock, therefore I walked through a long and hard but amazing path to re-educate my mind.
Trading is simple, changing your mind is the very hard thing but possible.
  • #598
  • Sep 27, 2017 8:42am Sep 27, 2017 8:42am
Quoting nonlinear
{quote} Mathematically, you are correct. However, roulette wheels are mechanical and have flaws if not maintained and replaced. These flaws can create a so-called biased wheel through which an edge can be found over time (as more knowledgeable others have written).
That's spot on and where the reality departs from the theory. That's exactly how Ed Thorpe exploited roulette with simple Newtonian physics. In fact every 'real' not 'virtual' roulette game has an exploitable bias.
  • #599
  • Sep 27, 2017 8:48am Sep 27, 2017 8:48am
Quoting Nico1359
{quote} This isn't exactly true. A successful professional poker player will transition to trading far better than your average person. This is not because the two endeavors have any intrinsic similarities, but rather because the psychological factors that it takes to be successful in trading are the exact same for poker. Things like managing your emotional response to loss. Having a specific approach and the discipline to stick to it. Understanding the nature of a zero-sum game. These are just a few of the similarities. Poker is an exception because...
That's true, that's the point: mindset.
You are also correct about poker, indeed the house does not hold the desk with poker, the same is for Chemin de fer, Why? because with those games the house cannot move odds on its side.
  • #600
  • Sep 27, 2017 12:08pm Sep 27, 2017 12:08pm
Quoting CrucialPoint
{quote} 10k USD (NOT Compounded) Minimum Profit of 50k a year. That's 6pips per day. 30pips per week. 10k USD (Compounded) Minimum Profit of 120k a year. That's still at 6pips per day. 30pips per week. I've mentioned this before along the same lines: The average daily range of any MAJORs is around 120pips. If any trader can't (or don't believe) consistently take 6pips out of 120pip range... That trader needs to be brutally honest with himself. Something is seriously wrong if you can't grab 6pips out of a 120pip range. An NO, I don't put a 1pip TP...
Can I ask if you use market(stop) or limit orders to trade? Which is better?
With stop orders you can get slippage and get worse price, on the other hand you can trade in the direction, where price goes now. With limit orders, you always get price what you want, but must trade in the other direction than price goes now. Am I right? What is your opinion?
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