Ok Lets play darts..or better still lets flip a coin..

[john_1]

Every hour on the alsi..I will flip a coin and trade heads I go long tails I go short..Now here is were it gets interactive..what money mangement rules do I need to apply to ensure success.

[#2]

Thank you for offering up your money for scientific research! Now we can establish for once and for all whether the idea that one can make money with a random entry and good risk / money management, is a myth.

[#3]

Hell ! Flipped the coin and heads it is so long at 17915

[#4]

Simon? You've been selling us the "all about the exit" kool-aid. Would you like to share that great exit strategy of yours with us?

[DEP]

John Beware. You should not treat the JSE as a casino!

[john_1]

I am playing with the idea of using time as the primary stop...Ie.. since we talking about a 6o minute trade 2% is 1,2minutes..so we trade giving the trade 90 seconds to breakeven or a maximum loss of 100 points. If a maximum loss is achieved we reverse into a short and give it 1.2 minutes or 100 points if this happens we wait a hour to play again. If we get stopped by time we flip again in 10 minutes untill we get a trade to move. Once we are moving we give it a trailing stop of 100 points from break even. This is just a game so any sugestions are welcome.

[john_1]

first trade in 18000 out 18002 timed out.

[#8]

With the above scheme, you essentially have two types of trades: those you enter in a random direction, and the reversals, which you enter after a 100 pt move in that direction within 90 s. I would propose that you keep a seperate tally for the random-entry trades and for the reversal trades. These two types of trades may have differing success rates; for example, perhaps only the reversal trades make any money. Lumping the results of the two types of trades together would then create the false impression that the random-entry trades have made a profit.

[SimonPB]

just run a trailing 50 pt stop loss ..

[john_1]

No you have to build a reversal stratergy into a random entry system the point is that you are letting the market tell you which way the money is at..but your point makes sense..you could enter if the market moves more than x points in say under y minutes as your entry..I think I like this entry more than a coin flip.

[SimonPB]

coin flip is completely random and as long as losses are smaller then winners - you win .. add any logic and you've got a system, which is why ma cross over works ..

[#12]

Indeed, it may be better to enter in the direction that the market is going in. Only then it is not a random entry, which I thought was the point of the experiment.

[#13]

As you reduce the size of your losses (by making your stop-loss tighter) the probability that each trade will be stopped out at a loss increases. Profit = number_of_winners * mean_win - number_of_losers * mean_loss. So there is a trade-off - tightening the stop-loss isn't a one-way street to profit.

[#14]

HEY ! I like that flip the coin think ! LOL I'll add that to my *****nal !!!

[#15]

eer ... weapons of mass distruction