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Coin Flip Reloaded

  • #1
  • First Post: Jul 14, 2009 3:42pm Jul 14, 2009 3:42pm
I know this has been tried a few times but i want to try my own version of this "system" so here we go:

I'll use EUR/USD for this test, a fixed 23 pips stop loss (20+ spread) and a 69 pips profit target (3*23).

IMHO this kind of "strategy" that relies just on a good risk/reward ratio can be profitable only if we have a strong momentum so my plan is to flip a coin every day just 2 minutes before important news.

The test will be conducted on a live account using 1 mini lot (1$/pip).

I will post here every trade i'll take.

I will stop after 100 trades to analyse the results.

First trade tomorrow just before Core CPI release.
  • #2
  • Jul 14, 2009 3:43pm Jul 14, 2009 3:43pm
Good luck. Looking forward to your results.
  • #3
  • Jul 14, 2009 9:15pm Jul 14, 2009 9:15pm
Me too.
  • #4
  • Jul 15, 2009 2:03am Jul 15, 2009 2:03am
If the news is really important the spread will widen if you enter just before news.

I don't think in the long run thisd system will be profitable, and also because it's random you are more then likely not going to stick out a losing run of 10 trades or so. I say, don't do it ... but good luck if you decide to go through with it.
Any idiot can take profit, real traders know how to take losses!
  • #5
  • Jul 15, 2009 2:40am Jul 15, 2009 2:40am
It depends what broker you are using, i have fixed spread. I definitely wouldn't try this with a broker that widens the spread.
  • #6
  • Jul 15, 2009 2:50am Jul 15, 2009 2:50am
Quoting bmchunu
If the news is really important the spread will widen if you enter just before news.

I don't think in the long run thisd system will be profitable, and also because it's random you are more then likely not going to stick out a losing run of 10 trades or so. I say, don't do it ... but good luck if you decide to go through with it.
If i only risk 2% on every trade, even 10 loosing trades in a row would not kill my balance. That's "only" 20% drawdown and 3 good trades would almost (18%) compensate the losses.
  • #7
  • Jul 15, 2009 3:56am Jul 15, 2009 3:56am
I decided to extend the experiment to gbp/usd too because i will get the 100 trades faster this way. Same rules even though cable is more volatiile.
Today we had the "Claimant Count Change" report and just before that, the magic coin gave a sell signal.

Trade 1: SELL: GBP/USD 1.6384; SL 1.6407; TP 1.6315

Let's see what happens.
  • #8
  • Jul 15, 2009 4:12am Jul 15, 2009 4:12am
Flipping a coin before the news gives you a 50% chance to win or loose. But your TP is three times higher than your SL. Yes, this may work when the spread stays tight.

A very interesting experiment.
  • #9
  • Jul 15, 2009 4:41am Jul 15, 2009 4:41am
All the best ... I hope you get to 100 trades!
Any idiot can take profit, real traders know how to take losses!
  • #10
  • Jul 15, 2009 6:13am Jul 15, 2009 6:13am
TRADE 1 RESULT: - 23 pips

I was up 50 pips during the trade but unfortunately it reversed and hit the SL.
  • #11
  • Jul 15, 2009 7:30am Jul 15, 2009 7:30am
trade 2 buy eur/usd 1.4091 sl 1.4068 tp 1.4160
  • #12
  • Jul 16, 2009 4:09am Jul 16, 2009 4:09am
TRADE 2 RESULT: -23 pips

Again i was about 50 pips up but in the end it hit my sl.

TOTAL: -46 pips
  • #13
  • Jul 16, 2009 7:40am Jul 16, 2009 7:40am
TRADE 3 SELL EUR/USD 1.4141 SL 1.4164 TP 1.4072

TRADE 3 RESULT: -23 pips

TOTAL: -69 pips

Damn coin Not the best start is it? Anyway, it's just an experiment and hopefuly we'll all learn something. I'm decided to keep the experiment until i reach 100 trades no matter what. Even if i get 20 losses in a row or 50 or 99 .

Note: the first two trades would have been profitable if i took profit at 2*SL, while the third went straight to negative and hit the sl.
  • #14
  • Jul 17, 2009 8:29am Jul 17, 2009 8:29am
trade 4: Buy eur/usd 1.4075; sl 1.4053; tp 1.4144
  • #15
  • Jul 17, 2009 10:21am Jul 17, 2009 10:21am
wont work, guaranteed to fail try something else
  • #16
  • Jul 17, 2009 10:53am Jul 17, 2009 10:53am
Quoting fugly
wont work, guaranteed to fail try something else
It's just an experiment. I want to see how trading without any strategy, but with a good risk/reward ratio, affects a trading balance.

Why are you convinced is a guaranteed failure? Maybe you could give some arguments or suggestions.
  • #17
  • Edited 7:05pm Jul 17, 2009 6:59pm | Edited 7:05pm
Quoting recreator82
I know this has been tried a few times but i want to try my own version of this "system" so here we go:

I'll use EUR/USD for this test, a fixed 23 pips stop loss (20+ spread) and a 69 pips profit target (3*23).

IMHO this kind of "strategy" that relies just on a good risk/reward ratio can be profitable only if we have a strong momentum so my plan is to flip a coin every day just 2 minutes before important news.

The test will be conducted on a live account using 1 mini lot (1$/pip).

I will post here every trade i'll take.

I will stop...
Suppose the eur/usd is 377 pips above the vegas tunnel, and you flip a buy. See the problem? You need to know how the market moves relative to measueable reference points. I f you're going to buy get in at a likely lowest point from your reference. Opposite for a sell. You'll never be 100% sure( obviously) but the probability will be in your favour, over hundreds of trades. Coin flipping might make some money, but not as much as if you know how the markets move ( relative to reference points) and you know HOW to trade. Just trying to save you time and wasted effort.Do at least 200 trades.
  • #18
  • Jul 18, 2009 2:30am Jul 18, 2009 2:30am
Quoting recreator82
It's just an experiment. I want to see how trading without any strategy, but with a good risk/reward ratio, affects a trading balance.

Why are you convinced is a guaranteed failure? Maybe you could give some arguments or suggestions.
Been there, tried it moved on ..... or whatever the english phrase is.

I tried it with a 2:1 tp:sl ratio on a demo, there's an old discussion thread about it between me, ron raygun and rabid somewhere here but i cant find it.

You can not make money consistenetly over the long term with random entries. It just can not be done. Speculation has been around for centuries and if you think of something random chances are its been thought of before and tried before and if it worked for anyone that person would have beaten the socks of Buffet. Coin tosses and random entries have been tried in all forms and reasearched to the core by PhD mathematicians and where did they land up ........ the answer is no where

Toss a coin and enter do you really beleive it could even be that easy?

Anyway I'm absolutely convinced of this and don't want to get into any argument my only suggestion is that you try it on a demo that way you'll save your $100 and you could maybe have a pizza and a coke or something.

I really dont want to get in to any argument so I'll just agree to whatever you say before hand so you dont have to say it and wish you all the best.

I just implore you please at least consider my suggestion about trying with a demo
  • #19
  • Last Post: Jul 22, 2009 8:51am Jul 22, 2009 8:51am
Quoting fugly
Been there, tried it moved on ..... or whatever the english phrase is.

I tried it with a 2:1 tp:sl ratio on a demo, there's an old discussion thread about it between me, ron raygun and rabid somewhere here but i cant find it.

You can not make money consistenetly over the long term with random entries. It just can not be done. Speculation has been around for centuries and if you think of something random chances are its been thought of before and tried before and if it worked for anyone that person would have beaten the socks of Buffet. Coin tosses...

Thank for your suggestions. Like i said before it's just an experiment (it's money i can afford to loose, even if all 100 trades go negative.). It's actually a research for an ebook i intend to write. I wouldn't dream to trade like this for a living. I have my own trading system that i use and is based on sound principles.

Unfortunately i'm on the road these days and i have to pause the experiment until next month.
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