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Random Coin Toss Trading System for Stock Market


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#1 TechMan

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Posted 21 May 2015 - 03:19 PM

Just a new thread to keep track of my experiment with the coin toss system. :=)

Accuracy: 0.67% (2 for 3)

https://www.random.o...usd.0100c-adams

For tomorrow: UP


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Batting 1 for 2 (50%)

Coin Toss For tomorrow: UP


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Using the SPX as the market index, the coin toss system has hit 1 for 1 (100%).

The call for tomorrow is UP.


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Heads = Up
Tails = Down.

https://www.random.o...usd.0100c-adams

Tails today, so here's the call for tomorrow: Down. And I'll vote accordingly.

Every period's different. While the long term trend's still up, the VST outcome of this market from one session to the next appears to be random. We should keep track of the coin toss at 4:00 pm everyday to see if that's the case. Let's also see if it outperforms the daily poll.


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Edited by TechMan, 21 May 2015 - 03:23 PM.


#2 andr99

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Posted 21 May 2015 - 04:29 PM

..........We should keep track of the coin toss at 4:00 pm everyday to see if that's the case. Let's also see if it outperforms the daily poll.


I can anticipate you the final result of your ''experiment''......when you have large numbers.....it will end up.....flat......unless you bought the coin in southern ''italy'' where anything is possible.....even that a coin falls always on the same side :lol:

BTW...did you loose faith in TA ?

Edited by andr99, 21 May 2015 - 04:31 PM.

forever and only a V-E-N-E-T-K-E-N - langbard


#3 TechMan

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Posted 21 May 2015 - 05:19 PM

BTW...did you loose faith in TA ?


You can't have "faith" in probabilities. Trading is not about TA, it's about risk management.

#4 arbman

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Posted 21 May 2015 - 10:17 PM

I respectfully disagree, trading is about odds AND risk management. I read somewhere that the odds of an up day any given day is about 51%, so your coin toss is not necessarily any worse method. :D

#5 TechMan

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Posted 22 May 2015 - 02:20 AM

I respectfully disagree, trading is about odds AND risk management.


"Odds" are optical illusions. Risk is the only real hing you have control over.

#6 andr99

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Posted 22 May 2015 - 02:27 AM

BTW...did you loose faith in TA ?


You can't have "faith" in probabilities. Trading is not about TA, it's about risk management.


Well, if you toss a coin four or five times at all, it may happen that the coin falls on the same side all the times. But if you toss the coin one thousand times what you will see is a 50% on a side and the remaining 50% on the other side. That's why I said the experiment will end up ''flat''. Trading success would result flat as well and such a thing to tell the truth, would be an achievement for most traders that I know who tend to loose money in the long term. This flat result doesn' t change even in a large time interval such as 50 years or more because you will have a flat result in the up years (which will be on the whole many more...as the bull lasts much longer than the bear) and flat result in the down years.....and flat result in sideways years too. In a time interval of 50 years or more another strategy that one might consider would be going each day, just long on an index, profiting from the fact that in the long term bullish years are many more than the bearish ones. But really such a strategy is madness because implementing it at the start of a bear market such as the one which we are close to in my opinion, would mean being broken in few days and much before the next bull starts. The only strategy I know (which I apply to stocks but I could apply to whatever I wanted to trade) is this one : let's suppose I want to enter short on a stock....the first thing to look at is if possibly the stock has a wall of resistances just above its head and a long way to fall before finding the next support. This I call risk management. It's not enough though. I need to have a bearish pattern on he stock and the indicators confirming the bearish pattern. This is the part that I call probability because there's no pattern or indicator that is right 100% of times. Well, such a strategy works just in the right hands obviously......because trading is a RISKY BUSINESS and it's not for all (95% of traders loose and just 5% win). That's all.
There are obviously other winning strategies....such as those implemented by the guys who hedge......but I never tried that.

Edited by andr99, 22 May 2015 - 02:28 AM.

forever and only a V-E-N-E-T-K-E-N - langbard


#7 TechMan

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Posted 22 May 2015 - 03:16 AM

let's suppose I want to enter short on a stock....the first thing to look at is if possibly the stock has a wall of resistances just above its head and a long way to fall before finding the next support. This I call risk management.


That's not risk management.

#8 andr99

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Posted 22 May 2015 - 04:00 AM

let's suppose I want to enter short on a stock....the first thing to look at is if possibly the stock has a wall of resistances just above its head and a long way to fall before finding the next support. This I call risk management.


That's not risk management.


well....it's risk/reward.......coupled with the right stop loss placed slightly above the resistance area....it can provide you a small loss probability in front of a big gain one

Edited by andr99, 22 May 2015 - 04:03 AM.

forever and only a V-E-N-E-T-K-E-N - langbard


#9 viccarter

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Posted 22 May 2015 - 09:43 AM

It's well known that 3 to 1 reward vs. risk is profitable on coin flip odds. Nice to use as an example. Few traders have the discipline to pull it off in real life.

#10 TechMan

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Posted 22 May 2015 - 10:58 AM

Just to make sure, this "coin toss system" is more of a mockery than a real trading system. Like I've mentioned, every period's different. I just happen to find little bearing between sessions lately. Market's been taking a "random walk" down the Street. This could by all means change anytime.