Coin-Toss Trading Strategy
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Thread: Coin-Toss Trading Strategy

  1. #1
    I came across something interesting this morning.

    Seemingly, there's a trader/investor out there who developed a money management system so effective that he established his entrance on a coin toss. Regardless of the arbitrary nature of the coin toss, the money management consistently made money.

    This is my challenge to you:

    Produce a money management egy that when applied to some reasonable trading platform, can turn into a profit in a year.


    For some brainstorming ideas, here is the above trader did:

    Quote Originally Posted by ;
    We decided the volatility of the market by a 10 day exponential moving average of the Average True Range. Our first stop was three times that volatility studying. The same cease was trailed from the near, after entry occurred by a coin flip. The stop could move in our favor. Thus, the stop moved the markets moved in our favor or volatility shrank. We used a 1 percent risk model for our position-sizing.
    That's it! That's all there was to the machine; a random entrance, and a trailing stop that was three times the volatility, and also also a 1 percent risk algorithm to size positions. It conducted on 10 markets. And it was constantly in each market, either long or short, depending upon a coin exchange. It's a good example of how simplicity functions in system growth.
    When You run a random entry platform, you get different results. This system made money when it only traded one contract per futures market. It made money 100 percent of the time when a simple 1 percent risk money management system was added.

  2. #2
    Quote Originally Posted by ;
    Produce a money management egy that when applied to any trading system, may turn a profit within a year.
    There does not exist any cash management scheme that will develop into a trading system with negative expectancy into a single with positive expectancy.

  3. #3
    Quote Originally Posted by ;
    I came across something interesting that this morning on my way to school.

    Seemingly, there's a trader/investor on the market who developed a money management system so effective that he based his entry onto a coin toss. In spite of the arbitrary nature of the coin toss, the money management made money.

    Here is my challenge to you:

    Produce a money management egy which when applied to any trading platform, can turn a profit within a year.


    For many suggestions ideas, here's what the aforementioned trader did:
    This is a very intriguing concept....thanks for sharing.

    Damon

  4. #4
    Quote Originally Posted by ;
    There does not exist any cash management egy that'll turn a trading system with negative expectancy into one with positive expectancy.
    You're correct, allow me to amend that.

    A REASONABLE trading system I believe should do the job.

  5. #5

  6. #6
    Quote Originally Posted by ;
    There does not exist any money management scheme that'll turn a trading platform with adverse expectancy into a single with positive expectancy.
    You're just perfect.
    The idea which you can money manage a loser into a winner is one of the greatest myths in gambling.

  7. #7
    I saw those, and agree that in a trending market, this system would lose. My query is:

    How can the MM be set so that it at least reduces the loss if not eliminate it, while still taking in more pips in profit, and still remain a non-bias system? Is it possible? Or am I reaching for one more holy grail that is non-existent?

  8. #8
    Why would you need a coin toss? The odds are 50/50. With MM that is great you're blessed to break-even if your lucky. But remember the spread your paying every transaction. Start looking for a few trading systems which will provide you better odds like 70/30 with MM that is great. Why not attempt to simple 5/8 moving ave. cross with great MM. Most EA's are great but not attempt to improve with MM constructed into the EA on one. I really don't do not like telling somebody they cant do something, since anything is possible, nevertheless look for better odds.

  9. #9
    I have numerous systems with greater chances. I coded about all of them, and they all are publicly accessible on this forum.

    My main issue is that I feel like I am leaving too much on the table, and a number of the early systems I coded were near breakeven as it's. A lot of the issues according to additional traders was Money Management. How do I fix that?

  10. #10
    I would find someone on here that will allow you to program MM. Im sure there is.

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