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Attachments: TEB: Random Entry - Coin Toss Great with R.R.R.
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TEB: Random Entry - Coin Toss Great with R.R.R.

  • #41
  • Apr 18, 2014 5:40am Apr 18, 2014 5:40am
Quoting spyderman
{quote} So will you do that analysis before opening the position (and then not take it if it doesn't afford a reasonable opportunity) Seems like that would help tip things in your favor

Of course, as I think about it, if you did the analysis beforehand that really wouldn't be conducive to a random entry, so never mind.
  • #42
  • Apr 18, 2014 5:40am Apr 18, 2014 5:40am
Quoting spyderman
{quote} So will you do that analysis before opening the position (and then not take it if it doesn't afford a reasonable opportunity) Seems like that would help tip things in your favor
well no
I will
1. Take the trade
2. find a good SL (at least 25 pips using SDZ and RN)
3. then find a good target that is at least 3 to 1 RRR to the SL (Using SDZ and NR)
  • #43
  • Apr 18, 2014 5:57am Apr 18, 2014 5:57am
off to Good Friday service

cheers
  • #44
  • Apr 18, 2014 6:12am Apr 18, 2014 6:12am
Quoting TEB63
{quote} 1. thanks for doing this!!! 2. trailing stops (esp in the forex) have been know to be loses for a long time. 3. where you place your SL I think will be a real key and I do not think you can program that - I might be wrong! 4. would you mind try doing 10 to 1 RRR thanks again
I used similar rules for testing random entries to those posted by PipMeUp.

Here are 10 results on H4 EUR/USD for about 3 years with random entry when flat on a bar, with 50 pip sl, 500 pip tp: (note: these results are all from the same system, same settings)

Inserted Code
T: 140  PnL: 0.07725    13.6%   Avg: 0.00055 ML: 1  DD: 0.30835
T: 162  PnL: -0.1229    12.3%   Avg: -0.00076 ML: 1  DD: 0.3435
T: 119  PnL: 0.45205    19.3%   Avg: 0.0038 ML: 1  DD: 0.13575
T: 119  PnL: 0.4485     20.2%   Avg: 0.00377 ML: 1  DD: 0.1121
T: 147  PnL: 0.28745    16.3%   Avg: 0.00196 ML: 1  DD: 0.1276
T: 171  PnL: -0.2989    9.9%    Avg: -0.00175 ML: 1  DD: 0.4555
T: 144  PnL: 0.11355    15.3%   Avg: 0.00079 ML: 1  DD: 0.198
T: 145  PnL: 0.4334     17.9%   Avg: 0.00299 ML: 1  DD: 0.1584
T: 156  PnL: -0.07805   12.8%   Avg: -0.0005 ML: 1  DD: 0.2511
T: 153  PnL: -0.4991    7.8%    Avg: -0.00326 ML: 1  DD: 0.5266

From this it is possible to see that the results are a bit scary due to the high variance. On the one hand, you might get lucky and end up + 4500 pips. But you also might be unlucky and get the last result on the live account and end down 4900 pips! I see no "skill" in these results.
  • #45
  • Apr 18, 2014 6:30am Apr 18, 2014 6:30am
Quoting FXEZ
{quote} I used similar rules for testing random entries to those posted by PipMeUp. Here are 10 results on H4 EUR/USD for about 3 years with random entry when flat on a bar, with 50 pip sl, 500 pip tp: (note: these results are all from the same system, same settings) T: 140 PnL: 0.07725 13.6% Avg: 0.00055 ML: 1 DD: 0.30835 T: 162 PnL: -0.1229 12.3% Avg: -0.00076 ML: 1 DD: 0.3435 T: 119 PnL: 0.45205 19.3% Avg: 0.0038 ML: 1 DD: 0.13575 T: 119 PnL: 0.4485 20.2% Avg: 0.00377 ML: 1 DD: 0.1121 T: 147 PnL: 0.28745 16.3% Avg: 0.00196 ML: 1 DD: 0.1276 T:...

But again, would not eliminating the randomness of your 50-500 s/l & t/p make a notable change?
  • #46
  • Apr 18, 2014 6:34am Apr 18, 2014 6:34am
Seems to me most are missing the most important thing in the strategy & that's the SL & TP done based upon technical analysis & NOT just some random #s or a set SL/TP ratio. Showing what other results are based upon a different exit strategy will have completely different results compared to this strategy even if both are using a random entry method.

For example, a coin flip ends up being against a strong trend. The fixed SL/TP might lose 50 pips using a fixed 50/100 SL/TP method. TEB's method might look @ the difficult situation & decide to keep the potential loss small so find a swing point & use a 25 SL & 50 TP.
If the coin flip is with a strong trend the fixed 50/100 SL/TP method might win 100 pips. TEB's method might see the strong trend & use a 40 SL and 150 TP.
After 2 trades, fixed SL/TP method 1 loss (-50), 1 win (+100) = +50
After 2 trades TEB method 1 loss (-25), 1 win (+150) = +125
After many more similar trades it's pretty easy to see how different the results could be when some chart analysis is applied when placing the SL/TP.

I'm willing to bet TEB will make money with this method as I've watched his trading for some time now & feel he's good enough with his market analysis that he'll know how best to place the SL & TP. Most others might lose money trading this same method.
  • #47
  • Apr 18, 2014 6:58am Apr 18, 2014 6:58am
If the method is profitable, then I think some traders (myself included) might want to start spending a little more time working on the money management part of their trading & less time trying to figure out some complex system filled with 10 indicators trying to find the best entry. Look at TEB's charts from his other threads & you'll see he doesn't have a really complex strategy & he's been trading these methods profitably for years. I'm sure you've all heard it many times, "Keep It Simple".
  • #48
  • Apr 18, 2014 7:32am Apr 18, 2014 7:32am
Quoting srt
Seems to me most are missing the most important thing in the strategy & that's the SL & TP done based upon technical analysis & NOT just some random #s or a set SL/TP ratio. Showing what other results are based upon a different exit strategy will have completely different results compared to this strategy even if both are using a random entry method. For example, a coin flip ends up being against a strong trend. The fixed SL/TP might lose 50 pips using a fixed 50/100 SL/TP method. TEB's method might look @ the difficult situation & decide to keep...
If you look at the market after the coin toss entry and pick a sl and tp that suits your idea of where the market will go then you are no longer using a random entry, you are actually deciding whether the market will go up or down . By lowering your SL on entries that you think wont actually work out and increasing the TP on entries you think are good what you have simply done is used a system that takes what is the "edge" for your current system/method of analysis and then actually reduced that edge by then forcing you into entries you don't believe in at random times. If you can make this profitable it is because you are able to have a market edge and recognise losing trades and cut them sooner and recognise winning trades and let them run.

The point of this thread that money management is important is good, yes, but without the original ability to pick a market direction accurately you will not be profitable regardless of how you set your R:R. How are you going to tailor where you put the SL and TP without knowing how to pick a market direction to begin with? A system with an edge is REQUIRED before any number of money management systems can produce a profit. MM alone is nothing, as proven by the truly random market entry coin toss style systems being 100% unprofitable in the long run. However, contrary to the point of this thread, you can have POOR R:R in your trading method but due to being VERY accurate at picking directions you still can be profitable. MM is not REQUIRED to success at trading, an edge IS.
  • #49
  • Edited 9:58am Apr 18, 2014 8:53am | Edited 9:58am
Quoting AlanB
{quote} If you look at the market after the coin toss entry and pick a sl and tp that suits your idea of where the market will go then you are no longer using a random entry, you are actually deciding whether the market will go up or down . By lowering your SL on entries that you think wont actually work out and increasing the TP on entries you think are good what you have simply done is used a system that takes what is the "edge" for your current system/method of analysis and then actually reduced that edge by then forcing you into entries you...


LOL >>>> you said.. "If you look at the market after the coin toss entry and pick a sl and tp that suits your idea of where the market will go then you are no longer using a random entry,..."

1. This makes no sense.
What I am trying to do, is see if with good MM and RRR can you have a random entry and make money,
But what I do after entry has no effect on the entry.....I would have already entered. ... I am in lol

2. I never said I would pick my SL and T1 based on the trade trend.
I will likely take the best SL and work from there, but even if I did it would not change the entry. - it would still be random ... I would have entered
In fact more likely I would change it the other way - if I see a great long target I might get a bigger SL

(PS - in the rules it says the min SL is 25 pips)

3. I think you have missed the main point - The edge is MM and RRR -

4. well I believe and I see MM as the most important thing. and what I am trying to see if MM can win without a good system
Clearly a good system will good MM would be better of coarse.
  • #50
  • Apr 18, 2014 8:56am Apr 18, 2014 8:56am
Quoting TEB63
{quote} well no I will 1. Take the trade 2. find a good SL (at least 25 pips using SDZ and RN) 3. then find a good target that is at least 3 to 1 RRR to the SL (Using SDZ and NR)
Thank you for clarifying you are only using a random entry. I missed that when I quoted the Law of Large Numbers. So, in that case, your entries should be 50-50 over time, but that does not mean you cannot make profit. The exit point can change your profit result. Sure, use a fixed stop loss for losers, and a trailing stop for winners, and I think eventually you will come out ahead.

Consider this. I used to be part of a different forum years ago and nearly everyone lost pips over the day. Hard to believe, but most people are happy to just make any pips. Therefore, whatever they were doing, or more likely, whatever was influencing their decision-making, could not by any worse than doing your suggestion In fact, with less data, they might even profit!!

There is a well known trailing stop method that could help in this situation. It places the stop at the highest/lowest of the previous 3 candles. With each new candle, the stop is moved up or down according to the high/low of the previous 3 candles. This usually lets you move to break even or profit after entry. Well, using technical analysis it does. Unfortunately over the last few months the volatility of the market is going to make you break even or lose a little on most of your trades. There is only one or two moves a day that are better than 3 candles and will bring you to profit.

Since you are doing random entries and have a 50% chance to lose, another stop loss method that I personally use is PSAR. However, I set my PSAR to Step 0.10 and Max 1.0. It can head fake in a decent trend, but if you use it in accordance the three candle method, and common sense, it allows you to see a good exit point versus just setting a take profit like 99.99999% of traders do. It would be the difference between making 7% a year and 3000% a year.

Of course, I personally disagree with random entries because there are real ways to know the direction of the market for your time frame, the difference between a head fake and a reversal, as well as identifying consolidation and when it ends. But making real money would be cheating I guess) Hmm. But then again, you did say ONLY the entry was random and not the exit, right? Oh, but if I told you how to exit, then you would never do another random entry, lol.

Have fun
You cannot be extraordinary by being normal
  • #51
  • Apr 18, 2014 8:57am Apr 18, 2014 8:57am
Quoting FXEZ
{quote} I used similar rules for testing random entries to those posted by PipMeUp. Here are 10 results on H4 EUR/USD for about 3 years with random entry when flat on a bar, with 50 pip sl, 500 pip tp: (note: these results are all from the same system, same settings) T: 140 PnL: 0.07725 13.6% Avg: 0.00055 ML: 1 DD: 0.30835 T: 162 PnL: -0.1229 12.3% Avg: -0.00076 ML: 1 DD: 0.3435 T: 119 PnL: 0.45205 19.3% Avg: 0.0038 ML: 1 DD: 0.13575 T: 119 PnL: 0.4485 20.2% Avg: 0.00377 ML: 1 DD: 0.1121 T: 147 PnL: 0.28745 16.3% Avg: 0.00196 ML: 1 DD: 0.1276 T:...

interesting -- again I am not doing random trades just random entry
the skill is in what you do once you enter the trade.

maybe more then 10 trades would need to be taken
also did you take one a day at the same time?
  • #52
  • Apr 18, 2014 9:22am Apr 18, 2014 9:22am
Despite everything, remember what is important is to only use what works. When I have helped people with their systems in the past, the first question I always ask them is what indicator do you never look at? Then I ask what indicator is not consistent, so you do not trust it? Then I ask, why are they still on your template?

So, please do not force a result just to test a point. We all know this is not a solid plan, but I can tell you that few people put enough emphasis on proper exit points. The idea of setting a profit target makes my stomach crawl. That is sooooooo stupid. So, if in the end, you learn how to exit properly, then you have won 75% of the battle Yes, only 25% is entering because, as you are testifying, anyone can enter

I think by forcing yourself to accept responsibility for your entry, determine how to profit from it, and also learning to accept losses using a solid math approach and not an emotional marriage, lol...this is going to make you a better trader. However, I would not use any real money while you are playing around like this. Use this to find that all valuable ability to be consistent and unemotional. That is actually where the real money is made
You cannot be extraordinary by being normal
  • #53
  • Edited 9:58am Apr 18, 2014 9:44am | Edited 9:58am
Quoting srt
If the method is profitable, then I think some traders (myself included) might want to start spending a little more time working on the money management part of their trading & less time trying to figure out some complex system filled with 10 indicators trying to find the best entry. Look at TEB's charts from his other threads & you'll see he doesn't have a really complex strategy & he's been trading these methods profitably for years. I'm sure you've all heard it many times, "Keep It Simple".

I think you will find most good traders are more concerned with managing the trade more then the entry of the trade.
Almost systems are basically the same.
BBand or a stock or a trendline break all will give the same a great entry.

the more the stuff on the charts the less the pips in the bank ... is the general rule of thumb
  • #54
  • Apr 18, 2014 9:46am Apr 18, 2014 9:46am
Quoting dkrock
Despite everything, remember what is important is to only use what works. When I have helped people with their systems in the past, the first question I always ask them is what indicator do you never look at? Then I ask what indicator is not consistent, so you do not trust it? Then I ask, why are they still on your template? So, please do not force a result just to test a point. We all know this is not a solid plan, but I can tell you that few people put enough emphasis on proper exit points. The idea of setting a profit target makes my stomach...

well I am not risking life, limb or any real money $500 at 3% I am not to worried
  • #55
  • Apr 18, 2014 9:59am Apr 18, 2014 9:59am
Quoting TEB63
{quote} LOL >>>> you said.. "If you look at the market after the coin toss entry and pick a sl and tp that suits your idea of where the market will go then you are no longer using a random entry,..." 1. This makes no sense. What I am trying to do, is see if with good MM and RRR can you have a random entry and make money, But what I do after entry has no effect on the entry.....I would have already entered. ... I am in lol 2. I never said I would pick my SL and T1 based on the trade trend. I will likely take the best SL and work from there, but even...
1: it does make sense if you look at it in context and apply some thought to it, I clearly meant "in practice it is no longer a truly random entry system" because you will be tailoring the SL and TP to fit what your analysis of the market then says after the coin has put you into a trade. If the coin tells you to go long and you look at the market and see absolutely no hope whatsoever of that long working out you are clearly going to give it a very short stop loss to reduce the loss to a minimum. Vice versa for a trade that you think will go your way. You are, in essence, picking long or short for the market.

The key here is that without an ability to analyse the market direction it doesn't matter what money management you apply to your system, you wont make money in the end.

Any profit you make using this is because you will be able to see which of the trades this random coin toss gives you are in fact inevitable losers and which ones have a chance of winning. Like I said before, all you are taking your current system of analysing the market and reducing the win odds by giving yourself a whole bunch of bad trades (and also missing out on good trades) you aren't truly using a coin toss trading method. Your system clearly, to begin with, has to be quite profitable in order for it to still be profitable afterwards with both more bad trades and less good trades.

The fact is, not all of the entries are going to give you a reasonable target that is a good R:R away, you're either going to have terrible win accuracy over a long term or you'll have to take many trades with a small R:R of 1:1 and such to squeeze in enough winners, or you will not make money doing this. So if you are able to make profit on this then you're truly a good trader. It is not possible, however, to simply have a random entry and apply "ok I'll pick a high R:R" to make profit, you NEED to be able to see likely points where a market will move to and decide whether you think the stop loss or take profit would get hit first, how large to make them, etc.
  • #56
  • Apr 18, 2014 10:06am Apr 18, 2014 10:06am
Quoting AlanB
{quote} 1: it does make sense if you look at it in context and apply some thought to it, I clearly meant "in practice it is no longer a truly random entry system" because you will be tailoring the SL and TP to fit what your analysis of the market then says after the coin has put you into a trade. If the coin tells you to go long and you look at the market and see absolutely no hope whatsoever of that long working out you are clearly going to give it a very short stop loss to reduce the loss to a minimum. Vice versa for a trade that you think will...



I am not sure why this is so hard a concept for you to understand
you said " in practice it is no longer a truly random entry system"

Please try to get what I am saying

the point is - what I am going to do, its not a (i) random entry system - its a (ii) system with a random entry!
statement (i) and (ii) are very different and so everything you say after your statement that may apply to your statement (maybe) - which is statement (i)
but it does not apply to statement (ii) which is what I am doing
,,,, - and by the way it might not work -

cheers
  • #57
  • Apr 18, 2014 10:12am Apr 18, 2014 10:12am
Quoting TEB63
{quote} I am not sure why this is so hard a concept for you to understand you said " in practice it is no longer a truly random entry system" Please try to get what I am saying the point is what I am going to do its not a (i) random entry system - its a (ii) system with a random entry! statement (i) and (ii) are very different and so everything you say after your statement that may apply to your statement (maybe) - which is statement (i) but it does not apply to statement (ii) which is what I am doing- and by the way it might not work - cheers
I think there's some serious comprehension problems going on here. Good luck and have fun, I'll stop wasting my time now though.
  • #58
  • Apr 18, 2014 10:41am Apr 18, 2014 10:41am
You are selecting direction based on coin flip. There is no selection for DEAL OR NO DEAL. It is always DEAL. NO DEAL should be included, IMO.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #59
  • Apr 18, 2014 11:45am Apr 18, 2014 11:45am
Quoting AlanB
{quote} I think there's some serious comprehension problems going on here. Good luck and have fun, I'll stop wasting my time now though.
please do... lol... I think you were in fact just bored and just having sport and fun lol

or (and if this is the case I am sorry) is English not your 1st language?

cheers
  • #60
  • Apr 18, 2014 11:46am Apr 18, 2014 11:46am
Quoting TooSlow
You are selecting direction based on coin flip. There is no selection for DEAL OR NO DEAL. It is always DEAL. NO DEAL should be included, IMO.

not sure were you are going with this?
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