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The Coin-Flip Theory

  • #341
  • Aug 21, 2014 3:59am Aug 21, 2014 3:59am
Hello everyone,

Thank you for this thread and the work on this strategy.

I very much agree with the money management behind it. Many traders don't even understand the mathematical edge and start trading.. so nice to hear a professional approach for once !

My take on this strategy is that, obviously if the money management is being respected with perfect accuracy then it is a winning strategy. The volatility, the curve and drawdowns are of course going to be ugly and not the way a trader would like it to be but at the end, the edge catches up so it makes sense.

Now : the signal is what will differentiate this strategy from winning to loosing if the signal can achieve >50% winning trades. So, the current way that the signals are being given are I believe not the best... i mean if we think of how we can put odds in our favor, then we could work it out with a couple moving averages and other stuff which you guys can all figure out.

What would that kind of strategy result for short term trading? let's say 1 day becomes 1 hour. and you take position on the 5 minute bar. ? I think there is a lot to explore here.. so maybe a EA is a good way to backtest these ideas to get vague idea of what it could give us.

Looking forward to see more results of these days trading ! thanks
  • #342
  • Edited Aug 22, 2014 12:08am Aug 21, 2014 11:45pm | Edited Aug 22, 2014 12:08am
Day 15: August 21, 2014
Result: 18.62%

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Day 16: August 22, 2014
Bet Loaded

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  • #343
  • Aug 22, 2014 8:39pm Aug 22, 2014 8:39pm
Day 16: August 22, 2014
Result: 19.44%

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  • #344
  • Aug 25, 2014 12:52am Aug 25, 2014 12:52am
Day 17: August 25, 2014
Bet Loaded

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  • #345
  • Aug 25, 2014 6:37pm Aug 25, 2014 6:37pm
@victor which "settings" are you using?

I mean are you using ATR/2 for SL? using the TP rule? Did you add something else?
See you at Valinor!
  • #346
  • Edited 10:54pm Aug 25, 2014 10:38pm | Edited 10:54pm
Quoting feanor
@victor which "settings" are you using? I mean are you using ATR/2 for SL? using the TP rule? Did you add something else?
I use the Murrey Math Line as my "SL", and my Lot size is 15% of my SL pip...
Just look at all my previous trade screenshot... See how I set my SL 1x level above/below my sell/buy order...

My TP is minimum Reward 1. So if my SL below 1x Murrey Math Line is 17 pip, then my TP MUST be 17 pip or higher....

From the previous weeks of testing, it seem that it's better if you set Reward 3 pip higher.. So if you set SL at 17 pip then TP should be 20 pip...


I rarely set TP above 20 pip anymore because it make no sense... if I am going to get 15% in 100 pip... I rather get 15% in 15-20pip..

The whole point of all this is: IF you think setting SL small like 15 pip will get hit faster... then it make PERFECT SENSE that your TP will ALSO can hit faster.

The balance will not blow, it just de-compound smaller...... Suck it up and take the fast lost like a man..... your balance is not going anywhere if you are losing, but it does have a chance to gain 400% ...if you hit lucky win streak.


-----------
Side Note:

If you look at my Log from the post below:

The 1st week from (Day 1 to Day 6), I played using the author rule 34 pip SL , and TP at 34 pip for order 1 and order 2 will be NO TP....
Result my account just drop..... without hope 5 losing streak in a row.....

Day 7, is when I start applying Murrey Math lines for my "SL"... result I get a nice 50/50 ish.... instead of another losing no hope streak...

This is the best form of gambling....guarantee 15% win / Lose daily.. no Trend? no Matter....
  • #347
  • Edited Aug 26, 2014 12:10am Aug 25, 2014 10:49pm | Edited Aug 26, 2014 12:10am
Day 17: August 25, 2014
Result: -15.05%

Attached Image (click to enlarge)
Click to Enlarge Name: 8-25-2014 - Closed Trade.png Size: 10 KB

Attached Image (click to enlarge)
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Day 18: August 26, 2014
Bet Loaded

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  • #348
  • Aug 26, 2014 2:51am Aug 26, 2014 2:51am
Quoting victor_ray
{quote} Day 7, is when I start applying Murrey Math lines for my "SL"... result I get a nice 50/50 ish.... instead of another losing no hope streak... This is the best form of gambling....guarantee 15% win / Lose daily.. no Trend? no Matter....
you will never make it with 50/50 with 1:1. I hope you know this??? that is the same result if you just randomly get in a trade whenever and do TP and SL at 1:1. This is like the "default" forex stats when you have no strategy. Ofcourse you can get the odd lucky streak, but not in the long run, you wont get anywhere. will see how your murray strat pans out, perhaps you can increase that win percentage?
  • #349
  • Aug 26, 2014 4:01am Aug 26, 2014 4:01am
Can someone explain why your account never gets blown with this strategy? I find it very interesting.. I'm talking about the original rules.
  • #350
  • Aug 26, 2014 8:48am Aug 26, 2014 8:48am
Quoting minute
Can someone explain why your account never gets blown with this strategy? I find it very interesting.. I'm talking about the original rules.
Because we are talking about risking a percentage not a fixed $ amount.Although, in reality, if you keep losing you will get to a point where your broker won't allow you to trade anymore since you probably won't meet margin requirements. But, theoretically, you should never hit $0.
  • #351
  • Aug 26, 2014 10:45am Aug 26, 2014 10:45am
Quoting victor_ray
{quote} This is the best form of gambling....guarantee 15% win / Lose daily.. no Trend? no Matter....
Sry, but you have a big mistake within your thinking... If you lose 15% one day, you have to win more than 15% the other day to reach the same amount again...Greetings robcole
  • #352
  • Aug 26, 2014 11:24am Aug 26, 2014 11:24am
Quoting TerryTibbs
{quote} Because we are talking about risking a percentage not a fixed $ amount.Although, in reality, if you keep losing you will get to a point where your broker won't allow you to trade anymore since you probably won't meet margin requirements. But, theoretically, you should never hit $0.
Ok, thanks. I get it now. So that figure where the broker stops you, I guess depends on your leverage. But there would be an amount where you would need to reload for a new try: - which in effect is a loss.

To be made up in future wins from the lucky streak.
  • #353
  • Edited 10:28pm Aug 26, 2014 10:04pm | Edited 10:28pm
Quoting robcole
{quote} Sry, but you have a big mistake within your thinking... If you lose 15% one day, you have to win more than 15% the other day to reach the same amount again...Greetings robcole
Yes but that doesn't matter... since you can save your balance from blowing.

As for TerryTibbs,

"you will never make it with 50/50 with 1:1. I hope you know this??? "

This is not a perfect world... either you end up with 60%win/40%loss OR 40%Loss/60%win............

That's how I see it,

I'll give you example: if you win 5 trade and lose 5 trade.. and get exactly 50%win/50% loss ratio...
What do you do to change the ratio? .............
Answer: you play 10 more trade.. if you get another 5 more trade win, and 5 more trade loss...
Then play ANOTHER 10 more trade.. you keep playing until..the win/loss ratio change in your favor..
Or you just quit then your ratio stay the same.

I'll show you what I see in my world.. if you hit a 58% lucky streak ratio,
The graph show 262 day, and each day you bet an order risking 15% of your balance.

Attached Image (click to enlarge)
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Any pm or any inquire on how I "simulate these random" event will be rejected.
I don't intended to share but I just want to show people that you can simulate random event in excel.

I can simulate millions of possibility with 58% lucky win streak but.. forex factory will only let me post so much picture in one post..
Most of the the random result show similar profit anyway..... so kind of redundant to post million of random possibility result.
  • #354
  • Edited 10:59pm Aug 26, 2014 10:48pm | Edited 10:59pm
This is "MY money management" plan to get 1 million$ in year.

Attached Image (click to enlarge)
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Obviously it work with any system, as long as YOUR system have a true 66.67% win rate with the exact sl and tp in the chart... you are rich period.

I hope you like the big chart you can seem them spike...

Obviously, I will not discuss any further about how or what I do to achieve the win rate on a "big balance".

I guess in the majority people eyes, it's a just a big gamble..

I don't know about you but... I would gamble 3000$ if I know I can get 1 million$....
It's not a bad risk... since your 3000$ balance never going to blown 5% risk is just too small...(figuratively speaking)

----
Side Note:
Sonic R system is not going to make you million$, go find your own edge....
  • #355
  • Aug 26, 2014 11:07pm Aug 26, 2014 11:07pm
Quoting victor_ray
{quote} This is the best form of gambling....guarantee 15% win / Lose daily.. no Trend? no Matter....
Sry, but you have a big mistake within your thinking... If you lose 15% one day, you have to win more than 15% the other day to reach the same amount again...Greetings robcole
  • #356
  • Aug 26, 2014 11:39pm Aug 26, 2014 11:39pm
@ Vistor ray - well good luck with that. i dont discredit what you are saying in your second post. i too have thought about the idea of "gambling" $200-$300 a pop to make it big. i currently use a strategy that is netting my 75% win rate with 1:1. so it is doable for me. plus i have access to 500:1 leverage so i can risk much more a day. 25% a trade is a good amount.

but i havent had the time yet to open up a sub-account with my main account to go for it yet. but i will soon hopefully. i will come back here to post the results, maybe a millionaire ..... we can dream.
  • #357
  • Aug 26, 2014 11:44pm Aug 26, 2014 11:44pm
Quoting TerryTibbs
@ Vistor ray - well good luck with that. i dont discredit what you are saying in your second post. i too have thought about the idea of "gambling" $200-$300 a pop to make it big. i currently use a strategy that is netting my 75% win rate with 1:1. so it is doable for me. plus i have access to 500:1 leverage so i can risk much more a day. 25% a trade is a good amount. but i havent had the time yet to open up a sub-account with my main account to go for it yet. but i will soon hopefully. i will come back here to post the results, maybe a millionaire...
Believe it or not, this is exactly how I made my first million in forex. You open a position risking almost all of the amount set aside and keep on adding. However, make sure 1) There is a really good Lifetime Opportunity, 2) any addition to original position should be well calculated because it will add more weight to the boat already only inches above the water. If you try ten times, need to succeed only once to get where I am right now ....................... over here:

http://i298.photobucket.com/albums/m...3a44317fb0.jpg
The Thief of Wall Street
  • #358
  • Edited Aug 27, 2014 12:23am Aug 26, 2014 11:52pm | Edited Aug 27, 2014 12:23am
Day 18: August 26, 2014
Result: -16.40%

Attached Image (click to enlarge)
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Attached Image (click to enlarge)
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Day 19: August 27, 2014
Bet Loaded

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  • #359
  • Edited Aug 27, 2014 12:14am Aug 26, 2014 11:54pm | Edited Aug 27, 2014 12:14am
Quoting TerryTibbs
i havent had the time yet to open up a sub-account with my main account to go for it yet. but i will soon hopefully. i will come back here to post the results, maybe a millionaire ..... we can dream.
Well why don't you just "play a small balance within a big balance..."

as long as you use sl and % risk right... it should have zero effect on your big balance...


I am risking only 100$ within a "big balance"......
That's why I had to record the "coin flip trade" in excel.. so that way I can keep track of the small balance...

Attached Image (click to enlarge)
Click to Enlarge Name: big balance.png Size: 126 KB


By the way, I hope people don't think I am dumb gambling lol .... even though the coin flip gamble play is losing...money.
But to me it's just a small loss...

I already made 200$ live in 1 trade so it cover the losing cost experiment...

I'll stop all posting after I have reach... a heavily dedication of live play 1 month to show people you are not going to blow money just because you "risk 15%" per trade...

Seriously though, this should the job of the author not me... I don't have to prove anything
But because the author have good intention so I decide...to help out for 1 month....

Playing eurusd with the coinflip system does affect my Main Big balance system... because on the Main account I play eurusd heavily scalp.
One month all I can spare to help the noobs out....

If you play other pair not eurusd you are going to lose using Murrey Math Line as SL...... (i already warn 2x on previous post...)

Math is power..........
  • #360
  • Aug 27, 2014 12:00am Aug 27, 2014 12:00am
Quoting Chicky
{quote} Believe it or not, this is exactly how I made my first million in forex. You open a position risking almost all of the amount set aside and keep on adding. However, make sure 1) There is a really good Lifetime Opportunity, 2) any addition to original position should be well calculated because it will add more weight to the boat already only inches above the water. If you try ten times, need to succeed only once to get where I am right now ....................... over here: {image}
lol you bast**d
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