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Attachments: Pure Risk to reward trade System - 1 to 3- Totally random entries
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Pure Risk to reward trade System - 1 to 3- Totally random entries

  • #81
  • Jul 27, 2012 12:22am Jul 27, 2012 12:22am
Quoting The River
If you are relying on the "trendiness" of the forex markets to generate a net positive result, then wouldn't you be better to place both a long and a short position simultaneously on each pair. If the tendancy to trend does persist, you have a greater chance of success.
try buying (or sell) both
the usdchf and eurusd

the issue comes down on the range not the trend of the market

  • #82
  • Jul 27, 2012 12:23am Jul 27, 2012 12:23am
Quoting Fx_Pipin
TEB63 I understand the point you are making. The only reason that i have been trading live for over 7 years without blowing my acct and currently in profit is because i have a min of a 1:2 RR on all my trades.

If one can understand that risking 3 to gain 1 is a guaranteed slow death to your account. Then you should believe the opposite is true.

Its just common sense.

Happy Trading!
yep I agree!
  • #83
  • Jul 27, 2012 12:27am Jul 27, 2012 12:27am
Quoting TEB63
Wow?
1. Trolling for what?

2. How can you know your MM without knowing your RRR?
In fact you cannot!

3. Forex trends the best overall, can you cherry pick examples in other areas of coarse - but overall forex is the best and in fact EurUsd is the best trend anywhere

[color=black][font=Verdana]4....
1) no idea. Of course, could just be likely to be a Poe. ( http://en.wikipedia.org/wiki/Poe's_law ) In that case, I guess I'm just trying to pull you back from the brink.

2) now I'm REALLY interested to know how you do your MM

3) You cannot accuse me of cherry picking, and then turn around to cherry pick EURUSD.

4) I'm pointing out that you can get trends from random walks, not just ranging markets as you claimed earlier.

5) The idea behind my original post was to separate fact from faith. No, it's not my belief. It's fact. You need EV to be positive to turn a profit. This will not turn up in the multipage equations your quant friends show you because that's the assumption they start with. All those equations WORK TOWARD generating EV>0.

6) I understand perfectly what you're doing. I'm just pointing out that all you'll be doing is demonstrating the power of variance, not RRR.
  • #84
  • Jul 27, 2012 12:31am Jul 27, 2012 12:31am
Quoting deathbait
It assumes market movement is a random walk(verdict's still out on that by the real pros : http://en.wikipedia.org/wiki/Random_walk_hypothesis )

*do note that even opponents of the random walk hypothesis say that any edge gained from non random walk markets comes from abusing information, which excludes this experiment since it just enters on random.


I COULD write up a program to analyse tick data from dukascopy, but that's besides the point.

Point I wanted to make was, people are using RRR wrongly. Even if it wasn't a normal...
You say "It assumes market movement is a random walk"
I do not agree
1. I believe in market manipulation on (a) under the day charts all the time and (b) over the day charts for short times.
2. I believe money does have trends on the day charts, and its based on (a) interest rates and (b) the health of a country and then
(c) BIG BIG issues ie wars. and this effect is double because you have two countries and currancies in the pair.
3. I believe Money (esp. the futures and bonds which lead spot currencies) do have a real value and it is moving on 2 pairs so it’s a moving target ie a trend! A double trend in fact
Cheers
  • #85
  • Jul 27, 2012 12:45am Jul 27, 2012 12:45am
Quoting TEB63
You say "It assumes market movement is a random walk"
I do not agree
1. I believe in market manipulation on (a) under the day charts all the time and (b) over the day charts for short times.
2. I believe money does have trends on the day charts, and its based on (a) interest rates and (b) the health of a country and then
[color=black][font=Verdana](c) BIG BIG issues...
1) again, it doesn't matter if it's non random because you're not utilising the non-randomness of it. You treat it as random by randomising your entries, and that's all that matters. That's not even the point. Attacking the assumption is a strawman. My point still stands, that RRR is not the overriding factor in the strategy's profitability. It's not even a moderately big one. It's kinda ironic that the attacks have been on the assumption of market randomness when it kind of proves my point that the probability of a trade's success plays a big role.

2) I have demonstrated to you that random walks can cause trends as well. As for random events causing non-random movements on the charts....if the parent is a random event, the child can be treated as one too. As far as we're concerned, it's a random event because we have no information on them before the market absorbs the information.

3) by your definition all instruments have double trends. No idea why you would point that out


You can keep talking about what you believe till the cows come home. In reality, that's just admitting you have no idea how any of it works, and you're operating on faith alone.

I'm just showing you how RRR fits into the bigger picture. No idea why you're so resistant.
  • #86
  • Jul 27, 2012 12:54am Jul 27, 2012 12:54am
Quoting deathbait
1) again, it doesn't matter if it's non random because you're not utilising the non-randomness of it. You treat it as random by randomising your entries, and that's all that matters. That's not even the point. Attacking the assumption is a strawman. My point still stands, that RRR is not the overriding factor in the strategy's profitability. It's not even a moderately big one. It's kinda ironic that the attacks have been on the assumption of market randomness when it kind of proves my point that the probability of a trade's success plays a big role....

you say.." it doesn't matter if it's non random because you're not utilising the non-randomness of it You treat it as random by randomising your entries, and that's all that matters. .."
this is not true one has to do with entry ... one with market direction
the two have nothing to do with each other
ie. I get in a boat flip a coin and by it deside to go north. (random)
this has nothing to do with the current.
If the current is stronger then my boat can go, I will go with the trend if the trend is weaker I will be able to over come the trend, which way I start has nothing to do with the current (trend).

you said.. "I'm just showing you how RRR fits into the bigger picture. No idea why you're so resistant,," "
on this we agree

cheers
  • #87
  • Jul 27, 2012 1:04am Jul 27, 2012 1:04am
Quoting TEB63
you say.." it doesn't matter if it's non random because you're not utilising the non-randomness of it.."
this is not true one has to do with entry ... one with market direction
the two have nothing to do with each other
ie. I get in a boat flip a coin and by it deside to go north. (random)
this has nothing to do with the current.
If the current is stronger then my boat can go, I will go with the trend if the trend is weaker I will be able to over come the trend, which way I start has nothing to do with the current (trend).

you...
sigh that's the exact opposite of what you're doing

if the current is strong heading north, you're STILL flipping a dice and rowing south if it comes up.

As for randomness, the meteorologist in his office may find the current entirely non random, but for you in the little boat, the direction of the current might as well be random.


Even as I type this, I realise that I've succumbed once more to arguing over randomness, when that has nothing to do with the point I'm making.

Quote
you said.. "I'm just showing you how RRR fits into the bigger picture. No idea why you're so resistant,," "
on this we agree

No idea what you're agreeing on.
  • #88
  • Jul 27, 2012 1:13am Jul 27, 2012 1:13am
Quoting deathbait
sigh that's the exact opposite of what you're doing

if the current is strong heading north, you're STILL flipping a dice and rowing south if it comes up.

As for randomness, the meteorologist in his office may find the current entirely non random, but for you in the little boat, the direction of the current might as well be random.


Even as I type this, I realise that I've succumbed once more to arguing over randomness, when that has nothing to do with the point I'm making.



No idea what you're agreeing on.

are you reading what you are writing?
the current of a river is not random.(even if it it was it would not matter)
the coin flip is random.
but more to the point again they have nothing to do with each other.
you have to get this!!
and my coin flip does not make the river more or less random.
they have nothing to do with each other - no effect on the other in anyway!!!
Even though both effect the boat - but they do not effect each other
  • #89
  • Jul 27, 2012 1:20am Jul 27, 2012 1:20am
Quoting TEB63
are you reading what you are writing?
the current of a river is not random.(even if it it was it would not matter)
the coin flip is random.
but more to the point again they have nothing to do with each other.
you have to get this!!
and my coin flip does not make the river more or less random.
they have nothing to do with each other - no effect on the other in anyway!!!
Even though both effect the boat - but they do not effect each other
of course they don't affect each other. They are vector forces that determine the resultant force. I would also argue that dogs aren't cats, but being right about some arbitrary tangent argument i just made up doesn't help move this main argument along any bit.

You're obviously getting so caught up in winning the side argument, you're drifting(lol) away from the main point.
  • #90
  • Jul 27, 2012 1:27am Jul 27, 2012 1:27am
Quoting deathbait
of course they don't affect each other. They are vector forces that determine the resultant force. I would also argue that dogs aren't cats, but being right about some arbitrary tangent argument i just made up doesn't help move this main argument along any bit.

You're obviously getting so caught up in winning the side argument, you're drifting(lol) away from the main point.

ok time for me to go to bed

you said and I now quoit "You treat it as random by randomising your entries, and that's all that matters. .."

NO I DO NOT and it is not all that matters - in fact your statement is a false statement !!!!

cheers and good night
  • #91
  • Jul 27, 2012 1:35am Jul 27, 2012 1:35am
Quoting TEB63
ok time for me to go to bed

you said and I now quoit "You treat it as random by randomising your entries, and that's all that matters. .."

NO I DO NOT and it is not all that matters - in fact your statement is a false statement !!!!

cheers and good night
sigh, you keep insisting on harping on side arguments that matter little. Ok fine, markets aren't moving randomly( even though the academics are still debating over it, apparently you already know the one true answer )

I could explain the context from that quote, but that just leads to more tangent arguments.

So i'll draw back to my original statement. If you do not understand the range of probability of success of your trade, u cannot make any statements on the profitability of it. RRR is simply one part of a bigger equation, worthless without the other.
  • #92
  • Jul 27, 2012 3:31am Jul 27, 2012 3:31am
I like your idea of rolling dice teb63. And wonder to see your good or bad results.
  • #93
  • Jul 27, 2012 5:55am Jul 27, 2012 5:55am
Hi Teb 63,

interesting exercise whatever the results. I will be following.

G.
  • #94
  • Jul 27, 2012 6:01am Jul 27, 2012 6:01am
Trade 10 Fri, July 27, 6:55 Am eurusd Buy 1.2288
dice rolls where 2 and 1
  • #95
  • Jul 27, 2012 9:36am Jul 27, 2012 9:36am
Hi
I echo Grumbo's post. I will be very interested in your results.
  • #96
  • Jul 28, 2012 8:08am Jul 28, 2012 8:08am
I enjoy a good debate as well as the next guy, as long as it doesn't become too esoteric for us laymen.

So let me see if I understand the two camps.

Teb (whose thread it is by the way) is asserting (or at least trying to determine if) your rrr is 3:1 it shouldn't matter why you enter the market...you will be profitable.

My thought: That would be true if there were an equal chance of hitting the 3 as there were of hitting the 1.

Therein (I believe) lies Deathbait's point. You have to factor in the chances of hitting the 3 vs. hitting the 1. If you only hit that 3 one third of the time then you're still at BE at best.
  • #97
  • Jul 29, 2012 1:01am Jul 29, 2012 1:01am
Quoting spyderman
If you only hit that 3 one third of the time then you're still at BE at best.
mathematics cant be your strong point
  • #98
  • Jul 29, 2012 6:29am Jul 29, 2012 6:29am
Quoting TEB63
how can I make them more random then using dice?


Hi Teb 63
I am interested with your system
I get a question for you the 1,2,3 buy's and 4,5,6 sell
is that for a reason any correlation matter it took place ??
or that’s complete random ?? I would also like to know
if the time 's for your entries are for Somme reason or is just random?
Thnks in advance
  • #99
  • Jul 29, 2012 7:05am Jul 29, 2012 7:05am
Quoting yonnie
mathematics cant be your strong point

Nor is tact yours...

Mypoint was: You have to factor in the chances of hitting the 3 vs. hitting the 1.


S/L= 50
T/P = 150

If all else is random price has to move 3 times as many pips to hit t/p as it does s/l, therefore it seems that t/p would only be hit 1/3 as often as s/l (all else being equal)

S/L *3 = 150
T/P *1= 150
  • #100
  • Jul 29, 2012 8:48am Jul 29, 2012 8:48am
groundhog day
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