Duality as key to Parrondo's paradox | Forex Factory

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Duality as key to Parrondo's paradox

  • #1
  • First Post: Edited Sep 26, 2016 2:23am Sep 25, 2016 6:40am | Edited Sep 26, 2016 2:23am
Parrondo's paradox - a paradox in game theory, has been described as: A combination of losing strategies becomes a winning strategy

Lets think of a list of polar opposites present in forex, for example :


Positive l Negative
Bulls l Bears
Trend l Consolidation
Buy l Sell
T.P. l S.P.

Than using logic similar to - If trend systems fail in consolidation, and consolidation systems fail in trend. Than using such weakness, we could get strength by understanding where a consolidation phase takes place and ends, and where a trend phase takes place. When people are tricked in to trading the consolidation, we will trade the trend against them. Since their consolidation oriented systems will fail in trend. When trend trading takes place, we will trade against trend followers in consolidation since their systems fail in consolidation.

In order for one to win, another must loose in a zero sum game.
When we opened a long and the price went up, its good for us, but its bad for someone who went short. And the opposite applies.

So basically... a losing factor can be exploited in to a winning factor.
To my believe, the key lies in what scares people from forex.

Volatility for example, I heard that some stock traders don`t like forex due to volatility... perhaps we should exploit volatility?
FX is a 24 hour market, perhaps we should exploit the time?

Oh and please do bash me with constructive criticism if you disagree with something that I said. Also please do provide ideas or opinions no matter how silly you believe they might sound to others.

After all when Newton discovered the gravity and he told people - "WOW guys look, the apples fall to the ground. There is something pulling them to the ground!"
Most replied with - Yeah idiot, so what? We knew it since birth.
Not many however yet realise what a genius Newton was.
The truth is hidden from you
  • #2
  • Sep 25, 2016 7:50am Sep 25, 2016 7:50am
Seems not too dissimilar to the threads that suggest to take a losing system and take the opposite entry...
Time hides Nothing
  • #3
  • Sep 25, 2016 8:08am Sep 25, 2016 8:08am
Quoting CindyXXXX
Seems not too dissimilar to the threads that suggest to take a losing system and take the opposite entry...
^This /thread

OP's post is just words thrown together in a semi-coherent manner that says nothing but alludes to being a contrarian of sorts - none of which has anything to do with Parrondo.
Congratulations ScalaFX for coming out of the closet!
  • #4
  • Sep 25, 2016 8:39am Sep 25, 2016 8:39am
If there is a paradox of sorts, it is this

1) In order to win surely one must not lose
2) There is no guaranty that any trade will be a winner or a loser
3) Therefore the only way to NOT LOSE (equity) is to keep the account FLAT (balance)

It seems that the result is something like that:

Attached Image (click to enlarge)
Click to Enlarge Name: 2016-09-25_15h36_32.png Size: 17 KB
  • #5
  • Sep 25, 2016 8:48am Sep 25, 2016 8:48am
I was thinking of contrarian trading but not simple taking the opposite entry when most buy or etc.. because that would still be subjective.
Not simply buying when the most horrible trader is selling.
But trying to conclude an edge from for example two factors which screw others over.
Trading is full of paradoxes, but those paradoxes do provide a great value in my belief. Even if its a subjective philosophy, there could be found a crucial point in it...
The truth is hidden from you
  • #6
  • Sep 25, 2016 8:55am Sep 25, 2016 8:55am
Quoting Mingary
If there is a paradox of sorts, it is this 1) In order to win surely one must not lose 2) There is no guaranty that any trade will be a winner or a loser 3) Therefore the only way to NOT LOSE (equity) is to keep the account FLAT (balance) It seems that the result is something like that: {image}
Therefore the only way to WIN is to:

1)Take loses sometimes (part of the game)
2)Forget about guarantees (looking for guarantees will lead to failure)
3)Not keep the equity flat by trading

?
The truth is hidden from you
  • #7
  • Sep 25, 2016 9:13am Sep 25, 2016 9:13am
Quoting Mingary
If there is a paradox of sorts, it is this 1) In order to win surely one must not lose 2) There is no guaranty that any trade will be a winner or a loser 3) Therefore the only way to NOT LOSE (equity) is to keep the account FLAT (balance) It seems that the result is something like that: {image}
Good
Time hides Nothing
  • #8
  • Sep 25, 2016 9:20am Sep 25, 2016 9:20am
Quoting MaxenshteinD
{quote} Therefore the only way to WIN is to: 1)Take loses sometimes (part of the game) 2)Forget about guarantees (looking for guarantees will lead to failure) 3)Not keep the equity flat by trading ?
Yes, something like that except for point 3
What I mean is that the balance must stay flat. Of course the equity will fluctuate and that is the only factor that must be managed.
Surely, one would rather not pay for the losers from the account balance. A much better choice is to pay for the losers from the account equity.
Then the winners take care of themselves and the balance goes from flat to up.
  • #9
  • Sep 25, 2016 9:33am Sep 25, 2016 9:33am
Quoting Mingary
{quote} Yes, something like that except for point 3 What I mean is that the balance must stay flat. Of course the equity will fluctuate and that is the only factor that must be managed. Surely, one would rather not pay for the losers from the account balance. A much better choice is to pay for the losers from the account equity. Then the winners take care of themselves and the balance goes from flat to up.
Thanks allot for this valuable information
It will probably take me a couple of days to decode the genius simple meaning which my mind is trying to make harder, but I believe that I will understand it.
And to everyone who commented above, Its a honour to me to learn from you.
Not due to cause "your high impact badges", but rather due to reasons behind such.
The truth is hidden from you
  • #10
  • Last Post: Sep 25, 2016 7:24pm Sep 25, 2016 7:24pm
Quoting MaxenshteinD
Parrondo's paradox - a paradox in game theory, has been described as: A combination of losing strategies becomes a winning strategy Lets think of a list of polar opposites present in forex, for example : Positive l Negative Bulls l Bears Trend l Consolidation Buy l Sell T.P. l S.P. Than using logic similar to - If trend systems fail in consolidation, and consolidation systems fail...
An opposite you've missed, traders who understand how a market works and ones that don't. You are on the track, in order to get paid especially the big boys then what do you think has to happen ?
Never said I was Batman,all I'm saying is you'll never see us together.
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