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Rags to Riches in 10 or 20 Trades - Simplicity at its finest

  • #641
  • Oct 5, 2013 2:11am Oct 5, 2013 2:11am
Quoting CindyXXXX
Believe me Owl when I say., I'm being very nice =)
its all relative cindy ... you're a touch nicer than earlier..... but I wouldn't go doing cartwheels at your progress lol..... half a gold star?
.... laughing all the way to the bank
  • #642
  • Oct 5, 2013 4:39am Oct 5, 2013 4:39am
Quoting Owl
{quote} Hello Patience.. I would of thought this type of thread wouldn't have fit your trading style?.... Let me find out? .... You, ARE starting to come around to this new super age way of thinking!!, huh?!!!... Glad to have you on board ,but oh please feel free to ever so correct me if I am wrong.... The floor is all yours as always.... Sincerely yours,Owl....
Hello Owl. You're right, this thread doesn't fit my trading style. I'm very conservative. Super age way of thinking? Are you calling me antiquated by any chance? Meh, I've been called much worse on this forum .... lmao. But I'm always up for a good gamble and a laugh so let me set up one of those 1:500 leverage accounts and see how many $50 deposits I can blow through. Sincerely yours, Patience.
Nothing worth having is easy.
  • #643
  • Oct 5, 2013 12:35pm Oct 5, 2013 12:35pm
Quoting erik1
If you truly had a long term edge of 66% with a 2:1 risk to reward ratio, your probability of pulling this off is still less than 1 in several million. Note that this assumes that you actually have this edge, if you don't have an edge you still have a chance to pull this off, around 1 in 18 million (just out of pure luck). Again, I'm not saying that it's not possible - it is - but just that it's improbable, I would encourage you to do the simulations yourself to measure your actual chances of success under different statistical assumptions. Statistics...
Dear erik1,

I greatly appreciate you, and I think you are almost surely right about the practical small likelihood of the scenario proposed in this thread.

But I would like to challenge your conclusion above, the literal one, also for completeness of information of the other readers here.

The proposed scheme, here, can be mathematically modeled as a variant of the gambler's ruin problem in probability theory. What you must calculate is the probability of doubling 15 times your capital without "going broke". In theory, if every time that you lose, you just halve your capital, you would never go broke. But, for practical purposes, let's say that you will stop this game when you go below 1$. If you start from $50, this means losing six times one after the other, because 50 * 2^(-6) = 0.78. This is perfectly equivalent to the gambler's ruin problem if you set the starting number of "chips" to 6, and you go on until you reach 21.

Now, setting T as target when the gambler will quit,
k = number of initial "chips"
lambda = q/p, where p = "win" probability and q = "lose probability" (p+q = 1, of course, and lambda is the reciprocal of the edge minus 1),
P(k) the probability of reaching T before going broke,
you have that:
Attached Image


Now, if you apply the formula above, given p = 0.66, you will see that the probability of "collecting 21 chips" before going broke, which is, the probability of reaching 50*2^15 before reaching 50*2^(-6) is...

98.13%, which is a bit far from 1 in several million. The expected value of the number of "trials" (= trades) you need to either go broke (with a 2% probability) or reach target is 45,6 (which means, 45 or 46, being those integers).

I think there is also no need for this being an opinion.

How do you come to the other result?

Best regards

BL
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  • #644
  • Oct 5, 2013 4:16pm Oct 5, 2013 4:16pm
Quoting betterlife
{quote} Dear erik1, I greatly appreciate you, and I think you are almost surely right about the practical small likelihood of the scenario proposed in this thread. But I would like to challenge your conclusion above, the literal one, also for completeness of information of the other readers here. The proposed scheme, here, can be mathematically modeled as a variant of the gambler's ruin problem in probability theory. What you must calculate is the probability of doubling 15 times your capital without "going broke". In theory, if every time that...
My head hurts...
  • #645
  • Oct 5, 2013 4:19pm Oct 5, 2013 4:19pm
Quoting DitterPD
{quote} gamble - play games of chance for money; bet. Do they play games of chance? Yes. Do they bet? Yes. Does casino initially have odds against players? Yes. Do they buy houses from winnings? No. Do they have stable mental health? No. Do you know any professional gambler, who wouldn't go bankrupt and would live happy life with house, wife and children after 20 years of professional gambling? No. Do you even know anyone, who is professional gambler with 20y experience?
house wife and children is a gamble...just check the divorce rate...it has a negative Risk to Reward...few lucky ones make it....from the so called winners, many just survive the unhappy marriage....
Get divorced with children on any westerncCountry being a low wage employee...and you will be poor for the rest of your days...
I´m happily married after 30 years, bur it was not an easy road....
  • #646
  • Oct 5, 2013 5:09pm Oct 5, 2013 5:09pm
Quoting cuchuflito
Hey People let´s all enjoy a wonderfull weekend... and then... how about returning to the original idea of this thread....?:nerd: I think the MM , Position sizing idea presented in the very first post is awsome, I´m trying it out with real Money. Who knows, maybe some here make it to the 50 Million area sometime, and have to deal with those mutiple Broker/ order issues... Cool problem to have...

I agree....the idea certainly has potential and the cost of entry is very cheap. I'm a bit too committed to do this at the moment, but I can't argue with the logic of it. As with trading generally, the key is patience....it always is!
Doing what you like is Freedom. Liking what you do is Happiness.
  • #647
  • Oct 5, 2013 10:10pm Oct 5, 2013 10:10pm
Quoting itsallover
{quote} its all relative cindy ... you're a touch nicer than earlier..... but I wouldn't go doing cartwheels at your progress lol..... half a gold star?
I'll take half, sure.
Time hides Nothing
  • #648
  • Oct 6, 2013 5:24am Oct 6, 2013 5:24am
Quoting spyderman
{quote} My head hurts...
LOL!

I hope, at least, that you get that the whole means good news for you! (Given that you have a system consistenly giving you 1.2 with 66% probability... THIS is the difficult thing!)

Bye

BL
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  • #649
  • Oct 7, 2013 2:33am Oct 7, 2013 2:33am
interesting and well thought stuff.. look forward to look
  • #650
  • Oct 7, 2013 3:21am Oct 7, 2013 3:21am
Quoting betterlife
{quote} Dear erik1, I greatly appreciate you, and I think you are almost surely right about the practical small likelihood of the scenario proposed in this thread. But I would like to challenge your conclusion above, the literal one, also for completeness of information of the other readers here. The proposed scheme, here, can be mathematically modeled as a variant of the gambler's ruin problem in probability theory. What you must calculate is the probability of doubling 15 times your capital without "going broke". In theory, if every time that...
Very nice! A game of probability that can easily be expressed in mathematical terms - so much easier to express than marriage / divorce rates!
  • #651
  • Oct 7, 2013 8:38am Oct 7, 2013 8:38am
Quoting betterlife
{quote} If you start from $50, this means losing six times one after the other, because 50 * 2^(-6) = 0.78. This is perfectly equivalent to the gambler's ruin problem if you set the starting number of "chips" to 6, and you go on until you reach 21. Now, setting T as target when the gambler will quit, k = number of initial "chips" lambda = q/p, where p = "win" probability and q = "lose probability" (p+q = 1, of course, and lambda is the reciprocal of the edge minus 1), P(k) the probability of reaching T before going broke, you have that:...
Love this thank you betterlife!!
Give yourself a chance and trade it like it's layed out...
  • #652
  • Oct 7, 2013 10:17am Oct 7, 2013 10:17am
Quoting betterlife
{quote} Dear erik1, I greatly appreciate you, and I think you are almost surely right about the practical small likelihood of the scenario proposed in this thread. But I would like to challenge your conclusion above, the literal one, also for completeness of information of the other readers here. The proposed scheme, here, can be mathematically modeled as a variant of the gambler's ruin problem in probability theory. What you must calculate is the probability of doubling 15 times your capital without "going broke". In theory, if every time that...
at last we have scientific approach to the problem ... so if I correctly understood we should have ~2.5 K (50 trials x 50 USD, provided we have approx 70% edge) and just keep trading.. waiting for our holy run ?
all is eternal - this is good news for people who loves bad news
  • #653
  • Oct 7, 2013 11:22am Oct 7, 2013 11:22am
Realjumper your a funny dude, every week you Post in your Genesis Thread that you make 300-500 Pips with 15 trades mostly 14 wins and 1 loss, within average of 50-70 pip winning trades and just one 10 pip losing trade with your magic system, but your too committed to just risk 50 bucks to make them 50k in one damn week ? Instead of showing that indeed it is possible to make such a huge amount, in such short time, your running around and preaching BS. Just show us that it is possible for god sake make only 10k from 50 bucks and show it to the people, so many would appreciate to see with their own eyes that indeed it is possible to make it in forex with a decent strategy, patience and discipline, but if your not going to show anything ever and just keep preaching... Lets say its very annoying.
consistency wins
  • #654
  • Oct 7, 2013 2:46pm Oct 7, 2013 2:46pm
you should learn how to trade supply and demand. that way you can risk about 5 pips to make over 30 on average.
a 6:1 rr would be nice if youre yolo-ing 50 bucks
  • #655
  • Oct 7, 2013 2:49pm Oct 7, 2013 2:49pm
Quoting iTrader
Realjumper your a funny dude, every week you Post in your Genesis Thread that you make 300-500 Pips with 15 trades mostly 14 wins and 1 loss, within average of 50-70 pip winning trades and just one 10 pip losing trade with your magic system, but your too committed to just risk 50 bucks to make them 50k in one damn week ? Instead of showing that indeed it is possible to make such a huge amount, in such short time, your running around and preaching BS. Just show us that it is possible for god sake make only 10k from 50 bucks and show it to the people,...
If you were paying attention, you will see that I'm running a 4 week M1 test of the Genesis system, wh8ich follows the 515 test, and the M15 test, each of which were 4 week tests. Many trades are done live, even last night I posted a live trade and updated it as I went. I simply don't have time to do everything. Sorry that this upsets you.

When you say that I don't "show anything ever and just keep preaching", you really show your ignorance and arrogance, because many times I have posted live trades and I continue to do so, so you statement is just jealousy driven bullshit.

I don't know what your problem with me is, we have never spoken (as far as I know) but if you actually took the time to learn and follow the live calls, you might have a chance at FX, just as others on the Genesis thread have done.......and plenty of people there make good pips once they learn the system.

Also, the 'cherry picked' 15 trades with 1 loss that seems to irk you so much is something that you could do if you had the discipline and humility.

But at the end of the day, I really.....REALLY, don't give a monkeys what annoys you. Instead of this unprovoked attack on me, focus on your trading because your jealousy will ruin you.
Doing what you like is Freedom. Liking what you do is Happiness.
  • #656
  • Oct 7, 2013 2:54pm Oct 7, 2013 2:54pm
Quoting meshka
{quote} at last we have scientific approach to the problem ... so if I correctly understood we should have ~2.5 K (50 trials x 50 USD, provided we have approx 70% edge) and just keep trading.. waiting for our holy run ?
Hallo meshka!

Thanks for the enthusiasm and also for the vouch!

No: it's much easier than that. If you have REALLY (really? really? Oh, how I would like to see it) your edge of: p = 66% (you "win" two out of three trades) with a 1:2 risk/reward ratio (i.e. stop loss at half the distance from entry than the distance of entry to take profit...)

...

You need "just" to start with your 50$. In "about" (it is called "Expected value" in probability) 45-46 trades you'll be out:
* With a probability of 98% with your million dollar and something more
* In two percent of cases with 78 cents...

As said: my two problems with that would be:
* Having a system that really (really really really...) gives me 1:2 r/r in 66% of cases. This edge must be stable over the whole series of trades. [Corollary: then it is better for you having a frequent trading system. On the long run the market can change and destroy your edge].
* Having some sleep the night that I am trading $800.000 knowing that I have 33% of chances of losing $400.000 the next morning.

But, surely, your heart is stronger than mine...

Take care: I am writing in a "joyful way" (as it should be!), but I am not kidding at all!

Bye

BL
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  • #657
  • Oct 7, 2013 3:23pm Oct 7, 2013 3:23pm
Quoting realjumper
{quote} There is an appropriate way to do things, vigilantism is the way of cowards......


RJ, I respect this mindset of yours.



Scammers don't say they have made $50 mil and then ask for money. Scammers act like they have had good success over the years and created over 1 million profits and then perhaps ask for fees for mentoring, or try to sell you their "system" (which of course fails).

If anyone has hard evidence please provide it in PRIVATE MESSAGE to me and I will post it here so everyone can benefit and avoid a scammer.
I don't want this thread filled with evidence from everyone.

UNTIL that time.

Everyone can we try and get this thread back on track?

Mixing it up with the 1:2 risk reward and the 2:1 risk reward setups.
Some scalps and some medium term.

Withdrew meager profits last week.. been up and down trying to force too many trades.
I'm enforcing more rigorous rules, such as only a max of 1 trade per week for each strategy except for one.



Lets get this back on track.
Attached Image (click to enlarge)
Click to Enlarge Name: image.jpg Size: 1.5 MB
Be hopeful in a winning position, and fearful in a losing position.
  • #658
  • Oct 7, 2013 5:52pm Oct 7, 2013 5:52pm
Quoting betterlife
{quote} Dear erik1, I greatly appreciate you, and I think you are almost surely right about the practical small likelihood of the scenario proposed in this thread. But I would like to challenge your conclusion above, the literal one, also for completeness of information of the other readers here. The proposed scheme, here, can be mathematically modeled as a variant of the gambler's ruin problem in probability theory. What you must calculate is the probability of doubling 15 times your capital without "going broke". In theory, if every time that...
Oh mate, how careless! You're right. I made a mistake on my post, I mean an edge where you have 35% winning trades (clearly an edge with 66% winning trades would be gargantuan).

One in a million is equal to 0.0001% success probability (100*1/1*10^6)

Random chance -> With 2:1 R:R 33%. Your probability of winning is 3e-5%.

Slight edge -> With 2:1 R:R 35%. Your probability of winning is 7.2e-5%.

Just repeated this very quickly mate, feel free to check. Cheers.
  • #659
  • Oct 7, 2013 6:15pm Oct 7, 2013 6:15pm
Quoting iTrader
Realjumper your a funny dude, every week you Post in your Genesis Thread that you make 300-500 Pips with 15 trades mostly 14 wins and 1 loss, within average of 50-70 pip winning trades and just one 10 pip losing trade with your magic system, but your too committed to just risk 50 bucks to make them 50k in one damn week ? Instead of showing that indeed it is possible to make such a huge amount, in such short time, your running around and preaching BS. Just show us that it is possible for god sake make only 10k from 50 bucks and show it to the people,...
$100 to $10,000, ive seen a few live accounts that have done that. Using a different strategy (scaling bigger into losers and adding to winners), but typically with the same stop loss. I've also seen an account go from $10k to $100k in 3 months. Also using a "scaling" into positions type strategy.


Forexsaint has gone from $100 to $10,000 in 9 days. It's all about adding to winners on the big moves, constantly levering up (using up new margin from profits, which will of course decrease the amount of pips between market price and your BREAK EVEN point)..... until the pullback, then you cash out all of it and start to build increasingly bigger positions back into the main trend once again. Rinse repeat.


I was going to make a thread on how to do its going to take me a while to make it... so be patient. I run this same type of trading on my big money low % risk style account.... I trade so freaking small that I almost never have losers, but when I do they are big. It's smart grid martingale, all the big players do it.


It's less speculative because you can keep improving cost basis. But the gains are very small. Talking like 0.1% per day small (on the leverage I use)
But still, 20% a year for 40 years and you are a multi-millionaire, starting with $10k.
40% a year for 25 years and you are a multi-millionaire starting with $10k.

So be patient and trade that way, and then use small amounts of risk ($12, $25, $50, $100.. whatever you consider small) to trade on a 50% stop loss and 100% tp

The best of both worlds.
Be hopeful in a winning position, and fearful in a losing position.
  • #660
  • Edited Oct 8, 2013 6:31am Oct 7, 2013 6:37pm | Edited Oct 8, 2013 6:31am
Quoting erik1
{quote} Oh mate, how careless! You're right. I made a mistake on my post, I mean an edge where you have 35% winning trades (clearly an edge with 66% winning trades would be gargantuan). One in a million is equal to 0.0001% success probability (100*1/1*10^6) Random chance -> With 2:1 R:R 33%. Your probability of winning is 3e-5%. Slight edge -> With 2:1 R:R 35%. Your probability of winning is 7.2e-5%. Just repeated this very quickly mate, feel free to check. Cheers.
You guys are forgetting to calculate that as you get closer to your goal (or as you move away from that initial $50 start risk), your chances of success increase.

Why? Because you have fewer trades left to reach your goal, and a greater amount of cushion from a losing streak.

If you already have 8 net winners but you lose 3 in a row its not that big of a deal to overall performance.
You still are halfway to 10 net winners after a 3 loss streak.

But if you only have 2 net winners and you lose 3 in a row, you lose your deposit.


Most people can't get out of the gate! If they went from 50 to 100, to 200, to 400... they would actually start feeling very calm about their profit cushion and it becomes much easier to place trades. BUT!! This can also go against you. Because you feel more careless, you will probably be more careless.

Which means you will take bad trades.'


It's all a mind game! Finding good trades to take was never the hard part!
It's avoiding taking a bad trade that is truly difficult
Usually our ego from recent winners and/or lack of patience makes a bad looking trade APPEAR to be a good one, kind of like beer goggles


We get "drunk" from our winners and put on "beer goggles". It's always better to just sleep it off and come back with a fresh head.
For me that takes a week. Even coming back the next day.. it's just not enough time to clear my head of the ego and that whole mindset of "screw waiting a year or two to do this, I'm so good I can do it in a month, or a week!

And then just forcing trades... the downward spiral begins.

Take time off after winners (and losers too) its truly the key to consistency, well it is for me anyway.
Especially with high leverage trading.
Be hopeful in a winning position, and fearful in a losing position.
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