speculates

[SimonPB]

nonsense, yo can regain with the next winner .. thinks we're talking past each other ..

[SimonPB]

nope SSF not a zero sum game coz there are market makers who hedge in the underlying .. ALSI is zero sum ..

[richardw]

I don't quite double-up because that can explode in your face horribly, but yup - if your pockets are deep enough and you choose your starting point well, you can benefit from the (reasonably) random movements. You have to know what your limits are - what's the worst situation you can handle? How exposed to black swans are you? If you have a stop-loss and the market jumps or drops 10% and blasts past your stop, what happens?

[G_V_V]

I know how that 10% make money with futures. They are the futures market. They have all the money at their disposal. They buy at specific levels as the market is moving down (they are in a long position) and resell them as the market is moving in the profit at each level they bought. When the market reachers what they perceive as being correctly priced they call that zero and start going short positions (they are in a short position) if the market moves higher. Then they buy back their short positions when the market drops and are in profit with each level. As their funds are well managed they sell shares if the market does to high against them, which forces the markets down. At each level they make a small percentage. I have doubled my capital including interest and dividend in shares in the past 6 years whilst the market has done nothing. I do it with shares because you need big bucks to do it with futures and futures close out four times a year which can make it more expensive and worrisome if you are down.

[G_V_V]

I was trading OML started at 12 rand by the time it reached 25 rand I was in very little, bought them on the way down at each level till the bottom and resold them at each level on the way up in profit. I do that with all my shares. Only buy blue chip.

[G_V_V]

Yes but the result is part of the 50/50 statistical formula.

[SimonPB]

nonsense

[G_V_V]

That is why gamblers get hooked at the Casino, they don't believe there is a statistical formula that makes the odds against them, they go back because they think they can regain the loss and sometimes they do make back some. But they don't realize that a small percentage gets taken away on each buck they place on the table.

[#9]

another trader who refuses to believe that there are other systems in the world to make money, other than their own. There are literally thousands of systems out there folks. Please come to realize that. The trick to making money is to be true to your own system. But GVV, you do have one pertinent observation. The wider your timeframe, the better your chances of making money trading shares. If you are trading geared instruments over long terms, you will probably lose you are correct. But the reciprocal also applies. Share trading, over short terms will probably cost you money as the movements will not be sufficient to cover your transaction costs and slippage. And your coin flip analogy is totally not applicable to this type of probability theory, for the mathematicians and statisticians out there - BTW

[G_V_V]

I very seldom sell my shares at a loss including the brokerage. I buy when the markets are going down and sell when they are going up. To me there is always an opportunity, when the market are going down it is an opportunity to buy and when the markets are going up an opportunity to sell. I don't cut my losses but ride them through. If you cut your losses then it is like placing a bet on red or black in rolette, if you place a bet on red every time for a week you will be square less the 1 on a 36 chance which is the zero. That means you will lose 2.77...% of every rand you put on the table, and half of that if they give you back 50% on outside bets. If you play randomly you have to be very unlucky to lose more but if you keep playing your loses will return to the mean. The deviation swings to both sides of the statistical formula, so you can't be more unlucky for too long than you can be lucky.

[SimonPB]

depends what you buy, DRD at R50 cutting your losses would've been a grand idea ..

[G_V_V]

That's why I try to only buy blue chip in the top 40. Just remember in the end we will all lose because as history has proven all civilizations come to an end, the Egyptian the Greeks the Romans ect.

[louisg]

Stores if you have span the coin 1000 times and you got 700 heads and 300 tails is the next spin also a 50/50 chance? GVV,the statistical answer is yes. On your 1001st toss of the same fair coin,there is still only two possible outcomes with both having a 1 in 2 chance(50/50). All tosses are independant of each other.ie the coin has no memory. However, the result of your 1000 tosses would suggest to me that you are tossing an unfair coin.ie biased towards heads. In this case I would suggest ou keep betting on heads. Regression towards the mean (reversion to the mean) will not occur with a biased coin.

[Rams]

Guys, as I have posted before, if I can get 50/50 from the market, I will have my own personal ATM!After attending Simons "Trade to Trade well" several times, I understood the concept of Risk and Probability....and i can make money in the market with 30/70!

[G_V_V]

I believe that if you spin a coin 700 heads and 300 tails the next spin is not fifty - fifty chance, there will be a greater chance that the result will be tails, if you don't believe it then your first claim that a coin has a fifty-fifty chance of heads and tails becomes contradictory. The more you spin the coin the higher the set of combinations will result. For example if you spin the coin 495 times the average chance is that you will spin 7 heads and 7 tails. Also you would have span 6 heads and 6 tails twice, 5 heads a 5 tails 4 times, 4 heads and 4 tails 8 times, 3 heads and 3 tails 16 times, 2 heads and 2 tails 32 times, 1 head and 1 tail 64 times, together the spins equal 495. Double the 495 and you will spin heads and tails 8 times in a row. if you continue you can reach 100 or 200 or 300 heads and tails in a row. However the total get so large that percentage difference beomes less and less. However it always has a greater chance to return to the mean. Else it would just be heads and tails repeatedly if it was a 50/50 chance each time.

[G_V_V]

It's 50/50 over large numbers, if you win on a 30/70 the time will come when you will lose on a 70/30.

[richardw]

Um, wrong. No reversion to mean. Stop arguing.
http://www.physicsforums.com/showthread.php?t=60279

[richardw]

Although it would be fantastic. You could 'load up' dice or coins by randomly flipping them all and keeping the ones that haven't seen heads (or their equivalent) in a while, and go gambling with other people. They wouldn't know that the coin has hit 30 heads in a row, so by your logic has a higher chance of hitting tails. You could keep these lucky dice for years, and then spring their built-in reversion to mean on unsuspecting gamblers.

[G_V_V]

As fantastic as it may sound the Casino has a limit of seven chances that you can double up before you can win. This take the odds in their favour, it is not impossible to spin 37 times heads or tails in a row however statistically it will take a long time before you spin 37 times heads in a row and twice as long after that if you do. You can't eat your cake and still have it.

[G_V_V]

Try tossing a coin 10,000 times then record how many times they fall in a row at each level, you will see that they falls on average very close to the formula I have posted here. The more you record the events the more correct the formula becomes and starts to build a pyramid structure with a a wide base of one's at the bottom, half the amount of two's as one's, half the amount of three's as two's and so forth until you reach one high number of times you span the coin in a row at the top.