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The Art of Coin Tossing

  • #21
  • Apr 7, 2015 9:15am Apr 7, 2015 9:15am
Quoting 21vs7
coin toss going all aud bull in three coin tosses and all aud pairs. Im thinking you are rigging the cointoss
The coin is indeed weighted off of the market and since AUD pairs will all be so correlated the coins from pair to pair often agree

Quoting j4d
{quote} Hey C.. I'm sure Van Tharpe's findings are correct to his work though I'm not sure my model would have worked in random mode, mine was manufactured very much on a set of edges which related to the market environment of that period.. I cant talk for Sis because I don't know he's model though I suspect 21vs7 is correct in his analogy.. Interesting project anyway..
I wont go into the exact model of the system but it was tested over 10 years of market data and remained persistent through all periods. Also the settings are recalculated as time progress just like how the Linear regression channels or MA's change as the market change so it is constantly adapting as time goes on.
  • #22
  • Apr 7, 2015 1:28pm Apr 7, 2015 1:28pm
Overtrading used to be a big problem for me. Especially after a streak of wins or losses like last night. Whenever I would get this urge I would often run with it and over trade my account into oblivion. Now I am able to recognize this feeling and not act upon. I must say I wanted to flip some more coins this morning and last night but I knew it was best for me to step back, re group and wait for the right flips to bet on. Watching a couple pairs that I will be looking to enter in the next few hours if the market is willing.
  • #23
  • Apr 7, 2015 1:28pm Apr 7, 2015 1:28pm
Quoting Copernicus
. I would be interested to hear other thoughts about this
I trade trend too.. I pretty much agree with all your saying C, as far as edges go they are very few and far between imho.. I think the major edge is just having the ability to able to follow a set of processes that make our trade model. Its easy when we're making money, the grind happens when the processes that we follow stop making money and start loosing money, when the draw down period has longevity of say a few months or more this is when most traders pull the plug and start to look elsewhere. This kind of behavior is so common that most retail traders never get to look right into the dark space that they have to move through before they can see the light. Its only when we have a robust model that we truly have an unconscious belief in that we can survive the DD and stay true to the Model..

Look at the environment in FX at the moment, its probably been one of the easiest environments to make money if your a trend trader, look how quiet a lot of the *levels* traders have gone... so, is our edge then recognizing what environment we need to use our model in or is it finding patterns amongst the mayhem ?

Most of my energy now is running a set of processes that give the environment a kinda black and white definition and then if the landscape fits ... trade it..
Memories caught in time but never forgotten
  • #24
  • Apr 7, 2015 1:37pm Apr 7, 2015 1:37pm
Quoting Copernicus
I would be interested to hear other thoughts about this
One thing I really love that you said is the idea that a trend does not exist until you think it is there. This is what most people don't realize. Trends, Value, a "good Price" is all relative. a $100,000 car is not a good price for the average man. To a billionaire this is a steal, its all relative. Same goes with prices in the market. This is something that took me forever to wrap my head around.

Here are my main thoughts about entry. I can not predict where the market will let me get in. I can know where I will get out of the market. I always know my targets and stops before I even think about getting in the market. Once I have these, if the market is in a good place to enter R:R I get in. Not because of a break out or some pattern or MA crosses. Just because the spread is low and the R:R is there. I could care less what the PA is saying, thats old news.

I really loved your mention of the of the casinos keeping you in the game long enough for you to think you have a chance. My system works in a similar way. I let every one else participate in the market until the are exhausted, then I come in and take the money and run

sis.
  • #25
  • Edited 2:01pm Apr 7, 2015 1:40pm | Edited 2:01pm
Quoting Sis.yphus
{quote} Hey j4d Yeah using this high win rate, high risk reward model did take some getting used to but I have grown to love them. If the system has a truly high win rate the drawdown should be equal as if you are using a reverse R:R of 1:2 or 1:3. With the R:R I am using my overall/max drawdown should be around 4 losses in a row in the worst case scenario. If I were to use a 1:2, since my WR will go down by default due to the R:R the amount of draw I am going to receive will be the same profit wise except it will could possibly come across...
It make sense Sis.. I enjoyed my soiree with negative RR strategy's and i know there is a lot of movement within the parameters..imho, Sometimes the correct way forward is to take a step outside the box and view in..enjoying the journal.. Keep up the cool work..
Memories caught in time but never forgotten
  • #26
  • Apr 7, 2015 4:51pm Apr 7, 2015 4:51pm
Quoting Sis.yphus
I really loved your mention of the of the casinos keeping you in the game long enough for you to think you have a chance. My system works in a similar way. I let every one else participate in the market until the are exhausted, then I come in and take the money and run sis.
Morning Sis

I am having a buzz at the moment with your challenging proposition that you simply do the opposite of what the herd is doing from your intro.

I had a really challenging period of life as a trader trying to overcome this inherent randomness in the market and became so attracted to the principal that whatever thought I had about a particular price direction...then simply do the opposite.

I used to love Seinfeld and in particular the anti-hero Mr George Costanza. In fact there is a classic episode where all his fortunes came to bear when he chose this tack in life, referred to as 'the Costanza principle'. At this point in time he became a living legend simply by reversing all his normal decisions and thereby finding his pot of gold. He was no fool you know. In fact he was 'Lord of the Idiots'.

Despite the humour, there is a significant truth statement in this with regards to the market. The more you think there are 'real' repeating patterns in this market that you can predict, the more you are fooled by it's complex random nature. Price movements unfold just like waves in the sea. One day it might be choppy, the next there might be swells, and the next calm. Why try to even predict it when you can just simply float in it.

Great thread Sis :-)
  • #27
  • Edited 5:29pm Apr 7, 2015 4:59pm | Edited 5:29pm
Quoting j4d
Its easy when we're making money, the grind happens when the processes that we follow stop making money and start loosing money, when the draw down period has longevity of say a few months or more this is when most traders pull the plug and start to look elsewhere. This kind of behavior is so common that most retail traders never get to look right into the dark space that they have to move through before they can see the light. Its only when we have a robust model that we truly have an unconscious belief in that we can survive the DD and stay true...
So true mate. If anything has the ability to put you in a deep dark place it is this fickle market. It has this unerring ability to raise the demons in you and make you question everyhting. Sis is totally right in that the right mindset is essential to trading this market. Psychology really matters. :-)

I like probably many other traders have gone through many mindset stages in my trading life. Does this set of stages ring true with you and others:

1) I can beat this market - Usually ends in a blow-up
2) The denial stage - Plow on regardless thinking this market is just irrational - Death by a thousand cuts;
3) Deceive the market - The stage when you get addicted to Martingales as a method to attempt to beat the randomness - With ultimate blow-ups despite following periods of jubilation;
4) Avoidence - You are still fascinated by the market but your acceptance of your gambling addiction keeps you away for a period;
5) Acceptance - Your final stage in the market when you simply learn to accept what the market gives you.
  • #28
  • Apr 7, 2015 5:25pm Apr 7, 2015 5:25pm
Quoting Copernicus
{quote} Morning Sis I am having a buzz at the moment with your challenging proposition that you simply do the opposite of what the herd is doing from your intro. I had a really challenging period of life as a trader trying to overcome this inherent randomness in the market and became so attracted to the principal that whatever thought I had about a particular price direction...then simply do the opposite. I used to love Seinfeld and in particular the anti-hero Mr George Costanza. In fact there is a classic episode where all his fortunes came to...

Morning C

It took me good bit to wrap my head around this philosophy/outlook of the market since it doesn't feel natural to think like this. Humans are inclined to fit in, and exist with the others around them, to do the same. Just like that video of the people in the elevator on the other thread. They don't know why they want to fit in but they almost all end up turning around just to fit in. I think market participants behave in the same way.

Quoting Copernicus
{quote}Price movements unfold just like waves in the sea. One day it might be choppy, the next there might be swells, and the next calm. Why try to even predict it when you can just simply float in it.
you couldn't have said it any better! Just sit in the water and go where the market takes you

I have not watched too much seinfield but my fiance has has been telling me to for sometime now so i need to just sit down and tackle them. I totally agree in the significance in that example. Humans love to make sense out of things and complicate them. They can never settle on the idea that, we just don't know what is next. Im glad you guys are enjoying the thread, hopefully I can keep it interesting
  • #29
  • Apr 7, 2015 5:32pm Apr 7, 2015 5:32pm
After regrouping and waiting for the right time to enter the market, I have flipped 3 more coins going into the asian session.

EURUSD: Heads.
EURCAD: Heads
USDJPY: Tails.

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I am expecting all of the coins to land within 20-24 hours.
  • #30
  • Apr 7, 2015 5:37pm Apr 7, 2015 5:37pm
Quoting Copernicus
{quote}
1) I can beat this market - Usually ends in a blow-up
2) The denial stage - Plow on regardless thinking this market is just irrational - Death by a thousand cuts;
3) Deceive the market - The stage when you get addicted to Martingales as a method to attempt to beat the randomness - With ultimate blow-ups despite following periods of jubilation;
4) Avoidence - You are still fascinated by the market but your acceptance of your gambling addiction keeps you away for a period;
5) Acceptance - Your final stage in the market when you simply learn...


The first 4 steps were on repeat for nearly 2 years with me. All of the blow ups were hard lessons to learn, but they were all lessons that needed to be learn. And I know there are many more lessons for me to learn, hopefully I will learn them the easy way instead of the hard.
  • #31
  • Apr 7, 2015 5:52pm Apr 7, 2015 5:52pm
Quoting Sis.yphus
{quote} The first 4 steps were on repeat for nearly 2 years with me. All of the blow ups were hard lessons to learn, but they were all lessons that needed to be learn. And I know there are many more lessons for me to learn, hopefully I will learn them the easy way instead of the hard.
I just reckon you have been enlightened a bit earlier than most Sis. It helps to learn from the school of hard knocks provided that final 'knock' is not just around the corner preventing you from cashing in on all that experience.
  • #32
  • Apr 7, 2015 6:14pm Apr 7, 2015 6:14pm
Quoting Copernicus
{quote} I just reckon you have been enlightened a bit earlier than most Sis. It helps to learn from the school of hard knocks provided that final 'knock' is not just around the corner preventing you from cashing in on all that experience.
So true. Im a big believer in the idea that you don't have good judgement until you have had bad judgement. Everybody has to pay there dues eventually as the chickens always come home to roost
  • #33
  • Apr 7, 2015 11:39pm Apr 7, 2015 11:39pm
USDJPY landed on tails just as I suspected. This is a great chart showing the reversion to random walk after the level flight has occurred.
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Still waiting for my EURUSD & EURCAD coins to land. as of now it looks like they want to land on heads.

Once these two coins land I will be done trading till tomorrows asian session. Have all of my mid terms tomorrow so I need to start preparing for those
  • #34
  • Apr 8, 2015 7:09am Apr 8, 2015 7:09am
EURUSD Landed Heads. So 2/3 so far on the 3 tosses yesterday.
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Still waiting for EURCAD to land. As of now it looks like it will land on tails, but we will see.
  • #35
  • Apr 8, 2015 8:48am Apr 8, 2015 8:48am
I never like watching the market closely. I did this morning to see how EURCAD would play out. Watching the battle often gets me anxious and it is usually better for me to stay out while my money is in. EURCAD landed tails for a loss. Hey I can't win them all

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Time to digest this loser.

Thinking back on the trade there are a few things I would have done different. The first is I would not have watched the charts like I did this am. I need to flip my coin and let it land. Watching it spin will not change the outcome. Second thing i regret doing is adding my my position as i "thought it would bounce". This is a rookie mistake adding to losers. Thankfully my add was so small that it was only an additional .4% risk and the overall position did not exceed my total risk of 10%. Despite this I still regret adding the position and in the future I will look to only enter the market 1 time per coin flip. Some reasons why I do not wish to add to my original entries is 1. it increases my risk, which I never want to do. 2. it skews my win rate. Instead of each flip showing up as 1 loss, it now shows up as 2 losses for one flip. This skew works positive and negative but I wanted to create this account to get the raw stats of this system forward testing in a live scenario. In order to have the best stats possible I need to keep my entries to 1 per flip. No adding to winners or losers.

Again I can not win them all and the losses are inevitable. Time to clear my head, take my mid terms and return to this battle in the Asian Session.

sis.
  • #36
  • Apr 8, 2015 9:29am Apr 8, 2015 9:29am
After reviewing some stats for my system the numbers are moving right where I expected them to be. Again this is an EXTREMELY small sample size but I find it important to constantly be analyzing your results to see how it is performing and where it stands. It will always be nice to look back and see how these stats change and progress with time.
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The 3 big stats I really am focusing on in order to compare my actual results to the results I expected to get is
1. Win Rate.
2. Profit Factor.
3. Time in Market %

Current Win Rate is 70% which is a little low for what I am expecting. Again this number is slightly skewed as I stated above, the 1 loss on the coinflip is actually 2 losses in the stats because I added to my position like a true chump.

The Profit Factor is right where I am expecting it to be for this system. I know it sounds crazy but my Profit Factor should oscillate between 3.00 & 4.50.

The time in the market is right where I want it to be. Since this strategy heavily relies on price & time frequency distributions the amount of time in the market should be equal to what my analysis was projecting before I started. My analysis told me that I should only be in the market about 10-15% of the time and my current % is 11.

If I can maintain my PF in my range and keep my % of time in the market in the range it needs to be, my Win Rate should catch up to where my analysis said it should be.
  • #37
  • Apr 8, 2015 12:57pm Apr 8, 2015 12:57pm
FOMC meeting coming up. Boy does it feel good to not have any positions on during it Any one leaving positions open get ready for some serious whip saw
  • #38
  • Apr 8, 2015 1:04pm Apr 8, 2015 1:04pm
Quoting Sis.yphus
FOMC meeting coming up. Boy does it feel good to not have any positions on during it Any one leaving positions open get ready for some serious whip saw
no meeting
  • #39
  • Apr 8, 2015 1:10pm Apr 8, 2015 1:10pm
Quoting mvp77
{quote} no meeting
was it cancelled or something or is my FF calendar being funky?

EDIT: Not sure what the deal was with the red news but meeting or no meeting USD is spiking nicely.
  • #40
  • Apr 8, 2015 1:16pm Apr 8, 2015 1:16pm
Quoting Sis.yphus
{quote} was it cancelled or something or is my FF calendar being funky?
just meeting minutes, a detailed record of the FOMC statement
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