The Coin Trade System aka Flip The Coin

Quoting opie999

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Live account or demo?
Who's the broker?

Not sure it matters. Just curious.

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Quoting opie999

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Thanks, bullrock. I'm also curious how you chose your SL and TP levels. Arbitrary numbers or were they based on average daily range for GU? Or maybe another reason entirely?

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Quoting bullrock

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They are based on statistical calculations that I have performed comparing open/high, open/low, high/low, open/close and finding an ideal win/loss ratio. Weeks of research, ideas, calculations and sleepless nights. The result is simple but the road was bumpy.

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Quoting Big Wave Rider

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So are you going to flip a real coin or have the computer do it for you?

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Quoting hanover

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Good luck, Bullrock.

If I understand correctly, the premise is that optimizing the TP and SL values will deliver an edge.

There's an excellent post (IMHO) by Zupcon in the thread you referred to:
http://www.forex-tsd.com/expert-advi...tml#post159035

"I don't think its necessarily a slap in the face to technical traders at all. This EA has the potential to prove two facts that you cannot escape.

Firstly, the win / loss rate is a function of the ratio to target and stop loss selected. Try playing around with different combinations and you'll see what I mean. Try using the same sort of settings Steintz is using, like a 150 pip stop loss, and a 20 pip target, and you'll see very similar results to what his EA achieves. This fact remains regardless of if the method has an edge or not, and potentially it can confuse.

Secondly, and more importantly, the results obtained due to random entry are due a large extent on luck. Now try re running back tests starting on a different date each time, and see how the equity curve changes. Sometimes you'll get fantastic results, and sometimes appalling results, and yet its the same EA.

Once you realize that great results doesn't necessarily mean you've got a great EA, and poor results doesn't necessarily mean a poor EA, and you start to evaluate performance a little more rigorously then its time to move onto the next step, which is determining if you can use TA to improve results, which is basically what your doing with the RSI filter and money management.

Ive played with random entry systems for years, I cant really understand how anyone could even begin to develop an automated trading solution without understanding the role that random chance can play. Without knowing this, you don't know if any difference seen by adding an indicator is due to the indicator, or simply due to luck. Once people understand and accept this fact, they can start looking at TA from the right perspective."

The results will no doubt be very interesting. However, given what Zupcon has said (the part I highlighted in bold typeface), I expect you'll need a huge number of trades to attain any kind of statistical validity, or alternatively, have profits exceeding losses by a significant amount to prove that the outcome is not merely the result of randomness.

David

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Quoting bullrock

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From http://mathworld.wolfram.com/GamblersRuin.html

"Therefore, the player starting out with the smallest number of pennies has the greatest chance of going bankrupt. Even with equal odds, the longer you gamble, the greater the chance that the player starting out with the most pennies wins. Since casinos have more pennies than their individual patrons, this principle allows casinos to always come out ahead in the long run. And the common practice of playing games with odds skewed in favor of the house makes this outcome just that much quicker. "

In this case the market or big banks has more pennies....

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Quoting Moe

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so $2 trillion changes hands daily in this market, i will have to start with that amount to have a shot at beating the house in this case the forex market.

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