Teach me how to make money. - page 2
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Why are you so quiet, theorists?
Didn't you expect to trade by looking not at the PRICE chart but at the INCOME STATISTICS chart?...
And that you have to open not "up" or "down", but "BY" or "AGAINST" signals from the TS?...
Well, keep quiet, keep quiet....
Why are you so quiet, theorists?
Didn't you expect to trade by looking not at the PRICE chart, but at the INCOME STATISTICS chart?...
And that you have to open not "up" or "down", but "BY" or "AGAINST" signals ...?
Well, keep quiet, keep quiet...
Ok, let's talk a bit (although I am not a theorist). :)
Often the situation - "for today" TC statistics is good (variant 1), we open by it.
For a certain period of time it gives profit on the average. But (almost certainly) the moment comes,
when it stops working. But while we will understand it, we will lose the profit or at best, break-even.
In other words, the profitable TS may turn into a losing one, using which one must trade in the opposite direction.
Same with the 2nd and 3rd options.
How to determine the moment of inadequacy, of "reversal"?
Actually, the key to success is not how to open, but how to close an open position...
Whenever you close your positions, you will always get a STATISTIC of the ACHIEVEMENTS of all your trades. That's what you can "ride" on.
OK, let's talk a bit (although I'm not a theorist). :)
Often the situation - "as of today" the TS statistics are good (option 1), we open on it.
For a while it gives a profit on average. But (almost certainly) the moment comes,
when it stops working. But while realizing it the programmer will sink or at best breakeven.
In other words, a profitable TS may turn into a loss-making one, with the help of which one must trade in the opposite direction.
The same with the 2nd and 3rd variants.
How to determine the moment of inadequacy or "reversal"?
And I specifically "emphasized" - there are three possible types of charts.
And if your graph is ascending (since you said "... open on it ..."), then the pullback you successfully use to your advantage.
And if you "fear" the pullback, then your lack of confidence in the "ascending" type of chart is obvious.
And there are two possible ways out: either you continue to COLLECT STATISTICS until you figure out its type, or you force it to a certain type. (e.g. "multiplying" any type of statistic data by a random sequence turns it into a "random", almost horizontal type (see Wikipedia. "Player's Ruin Problem"))
And I specifically "stressed" that there are three types of charts possible.
And if your chart is ascending (since you said "... open on it ..."), then you successfully use the pullback to your advantage.
And if you "fear" the pullback, then your lack of confidence in the "ascending" type of chart is obvious.
And there are two possible ways out: either you continue to COLLECT STATISTICS until you figure out its type, or you force it to a certain type. (e.g. "multiplying" a statistic of any type by a random sequence turns it into a "random", almost horizontal type (see Wikipedia. "Player Ruin Problem"))
I don't understand about how to successfully implement rollback to the plus side.
More details, please.
And that's what I said about the three types.
And about the fact that all of them "at any moment" may change their character.
For example, we see a TS with increasing deposit on the ascending part of the parabola (assumption).
At the beginning we had no statistics, there was no sense to work.
Suppose that in the middle (assumption!) of the ascending part we started working "by" the TS.
However, let's assume that in reality it was not in the middle, but in the peak.
And then it went downwards.
But perhaps it was not a parabola, but a local pullback of the deposit.
That is, TS temporarily went in the drawdown, and then went in the plus again.
How to trace this and minimize losses of such cases?
And also, how do I force the TS to a random view?
I don't understand how to successfully implement a rollback to the upside.
Could you elaborate on that, please?
And that's what I said about the three types.
And about the fact that all of them "at any moment" may change their character.
For example, we see a TS with increasing deposit on the ascending part of the parabola (assumption).
At the beginning we had no statistics, there was no sense to work.
Suppose that in the middle (assumption!) of the ascending part we started working "by" the TS.
However, let's assume that in reality it was not in the middle, but in the peak.
And then it went downwards.
But perhaps it was not a parabola, but a local pullback of the deposit.
That is, TS temporarily went in the drawdown, and then went in the plus again.
How to trace this and minimize losses of such cases?
And also, how to force the TS to lead it to the random form?
You and I seem to be thinking about different things.
I am referring to the "statistics of EXHIBIT" of trades made on the TS. And you seem to be talking about the BALANCE curve of the trading account.
Right?...
(EXHIBIT stats", in my case, does not contain information about position volumes. Playing with volumes, in my case, is one of the tools that allows you to profit from a specific STATISTICS)
You and I seem to be thinking about different things.
I'm referring to the "STATISTICS" of the trades made on the TS. And you seem to be talking about the BALANCE curve of the trading account.
Right?...
(EXHIBIT stats", in my case, does not contain information about position volumes. In my case, playing with volumes, is one of tools that allows to profit from a specific STATISTICS)
Balance and outcome statistics are certainly not identical, but they are close, imho.
As a rule, the balance decreases with each negative outcome.
Therefore, the outcome curve and the balance are probably similar in shape.
If this is not the case, please demonstrate.
Is volume play essentially Martingale? Or something more clever.
I have my own development that allows by managing
volume positions to nicely break even. At the same time (perhaps
but not necessarily) replacing the TS "on the fly". But even if this "new"
TS has so far yielded profits, the risks are seriously increasing.
And even random series can have many "negative"
events in a row.
By the way, how can one bring a series to a "pure" random one?
Everything is not clear with the outcomes. If there is a profit but minimal
- is it good? Or vice versa, is a minimal loss a good thing?
Balance and outcome statistics are certainly not identical, but they are close, imho.
As a rule, the balance decreases with each negative outcome.
Therefore, the outcome curve and the balance are probably similar in shape.
If this is not the case, please demonstrate.
Take, again, the "Player Ruin Problem" from Wikipedia.
Zoom in and take a closer look at the bottom right graph (at 1000 trajectories).
And now, tell me, don't you think of any seemingly obvious actions that would result in the BALANCE chart of the trading account being "close" but INCLUDED OVER the HOUR by 25...30 degrees?
By the way, how do you get the series to be "purely" random after all?
You take the statistics of your trades... and multiply each value BY A LITTLE RATE (one, or minus one). The results you get, you put them on a new chart... and, voila - you have a RUNNING LEVEL. Now, you can work with it in peace
Take, again, the "Player's Ruin Problem" from Wikipedia. Zoom in and take a closer look at the bottom right graph (at 1000 trajectories). And now, tell me, don't you think of any seemingly obvious actions that would result in the BALANCE chart of the trading account being "close", but INCLUDING the OVERHEAD by 25...30 degrees?
It's not clear to me what the obviousness here is, what the implication is.
From the wikipedia description, it appears that when a player is playing unfavourably, he has a better chance of raising the bet.
But only to "get out of the corridor", that is (in his own words) to "overcome the deposit of the other player".
Will this allow to beat the market? The justification will be considered with interest.
Besides, in the problem the coin always has the same asymmetry (at least during one game).
In the real market the asymmetry floats. For example spread, monetarypolicy, emergence of large rates, natural factors, etc.
If we're talking about missing out on some unfavourable (or conversely favourable) outcomes, then again asymmetry is volatile.
Or does none of that matter? Decipher, pls.
You take the statistics of your trades' OUTCOMES... ...and multiply each value BY THE LOSS (one, or minus one). The results you get, you put them on a new chart... and, voila - you have a RUNNING LEVEL. Now, you can work with it in peace.
Why not use a random sequence straight away then?
Like take a coin, flip it, heads - buy, tails - sell? :)
But seriously - why not apply?