 | Re: puzzling probability and roulette a la Mark Brown |
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wouldn't go near gambling. there's no edge to be exploited other than >perhaps in draw poker. well that's not quite true - the house has the edge >and they most certainly do exploit it. of course, the house hates card counters @ blackjack, but then...
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| | Re: puzzling probability and roulette a la Mark Brown |
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to: "bill wynne" <tradewynne@xxxxxxxxxxx>, <alexander@xxxxxxxxxxxxxxxxx>, <mr_bond@xxxxxxxxx>, <omega-list@xxxxxxxxxx
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| | Re: puzzling probability and roulette a la Mark Brown |
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likwise >from: "mike higgs" <moongateca@xxxxxxxxx> >to: "bill wynne" <tradewynne@xxxxxxxxxxx>, <alexander@xxxxxxxxxxxxxxxxx>, ><mr_bond@xxxxxxxxx>, <omega-list@xxxxxxxxxx> >subject: re: puzzling probability and roulette a la mark brown >date: mon, 3 dec...
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| | Re: puzzling probability and roulette a la Mark Brown |
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god, i hope not! systematic trading is so much fun and a joy that i'd hang it up in a heartbeat should it become dull and boring. each day i leap out of bed and run to the office (15 feet, puff, puff :)) because i enjoy trading so much. it's not just a...
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| | Re: puzzling probability and roulette a la Mark Brown |
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references: <001b01c17b7d$4ca38d80$a0ecb440@xxxxxxxxxxxxxxxxx> <3c0abcc2.ef629b7f@xxxxxxxxxxxxxx> <064401c17bab$5c944710$6401a8c0@xxxxxxxxx
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| | Re: puzzling probability and roulette a la Mark Brown |
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o -- john on tue, 4 dec 2001 multitrak@xxxxxxxxxxxxxxxx wrote: > come out 7, baby needs a new pair of shoes! :-) > > mt > > >imho, those getting emotional thrills out of "rolling the dice" while they > >trade are looking for disaster, and fully deserve...
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| | Re: puzzling probability and roulette a la Mark Brown |
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now what might be interesting from all this, is to examine whether such a pattern hunt is more valuable during "chop" and should be turned off as "randomness" fades? best regards, gene pope
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| | Re: puzzling probability and roulette a la Mark Brown |
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gary up'n sez: > the problem with applying this logic to trading systems is that you > assume each trade is totally independent from the previous ones. > many people say that's a valid assumption -- e.g. monte carlo testing > is based on that...
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| | Re: puzzling probability and roulette a la Mark Brown |
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on sun, 2 dec 2001 14:04:22 -0800, you wrote: >now in my mind, these two different probabilities are measuring the *same >event*. not exactly. the probabilities apply over very large numbers of events, but not over very few events. think about this...
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| | Re: puzzling probability and roulette a la Mark Brown |
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that is a different question. you're initial question was "what is the probability of getting 5 consecutive heads in 5 flips?" the answer is 1/(2^5). the question in this comment is "what is the probability of getting at least 1 heads in a total of 5...
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| | Re: puzzling probability and roulette a la Mark Brown |
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he said that my > betting system wasn't valid because each bet was an event independent of > previous events and that my next bet would therefore always have a 50/50 > chance of going my way. yet when i asked him what the odds of one color > coming up...
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| | Re: puzzling probability and roulette a la Mark Brown |
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in other words, if at any point you asked "what are the chances of > the next 5 spins being black?" the answer would be 0.5^5. but if you > get 4 blacks in a row, and ask "what are the chances of the next 1 > spin being black?" the answer is 50%. so...
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| | Re: puzzling probability and roulette a la Mark Brown |
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references: <20011203170909.71477.qmail@xxxxxxxxxxxxxxxxxxxxxxx><5.0.2.1.0.20011203120156.02b0c980@xxxxxxxxxxxxxxxxxxxxxxxxxxx
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| | Re: puzzling probability and roulette a la Mark Brown |
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so, what this tells me is, forget waiting for the 4 of one color > in a row to happen -- that is irrelevant. but if you then just > start from 0 and bet the same color each time, shouldn't your > chance of winning at least once over "the next 5 bets" then...
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| | Re: puzzling probability and roulette a la Mark Brown |
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tom, > but i am a little shocked. all of you traders responding but i don't get the > impression that any of you are actually gamblers. are you? any craps players > out there? wouldn't go near gambling. there's no edge to be exploited other than perhaps...
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| | Re: puzzling probability and roulette a la Mark Brown |
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i believe you may be mistaking a gaussian distribution for a probability. probability theory does not say that every flip of 100 coins will yield 50 heads and 50 tails, only that there will be a gaussian distribution of yields (in the real world), in which...
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| | Re: puzzling probability and roulette a la Mark Brown |
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apologies mike, i wasn't clear... ;) of course we've got black/scholes etc. i was opening the discussion up to measures other than classical that take into account the non-gaussian tails of market distribution. unless we assume that in the case of ltcm...
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| | Re: puzzling probability and roulette a la Mark Brown |
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yes!!!! what a fascinating thread! it makes sifting through the other 250 deleted emails all worthwhile. like a good trend on a choppy day. but i am a little shocked. all of you traders responding but i don't get the impression that any of you are...
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| | Re: puzzling probability and roulette a la Mark Brown |
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yet when i asked him what the odds of one color : coming up, say, 5 times in a row, he said that the chance of that happening : was about 3% (.5 * .5 * .5 * .5 * .5). : : now in my mind, these two different probabilities are measuring the *same : event...
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| | Re: puzzling probability and roulette a la Mark Brown |
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references: <20011203170909.71477.qmail@xxxxxxxxxxxxxxxxxxxxxxx> <5.0.2.1.0.20011203120156.02b0c980@xxxxxxxxxxxxxxxxxxxxxxxxxxx
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| | Re: puzzling probability and roulette a la Mark Brown |
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nope! i'd rather spend time exploiting market tendencies where the rules are not constantly changed when i consistently win. i've got the edge with my system or systematic method. but casinos stack the deck in their favor and can close the table...
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| | Re: puzzling probability and roulette a la Mark Brown |
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gary, > the problem with applying this logic to trading systems is that you > assume each trade is totally independent from the previous ones. > many people say that's a valid assumption -- e.g. monte carlo testing > is based on that assumption -- but in...
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| | Re: puzzling probability and roulette a la Mark Brown |
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come out 7, baby needs a new pair of shoes! :-) mt >imho, those getting emotional thrills out of "rolling the dice" while they >trade are looking for disaster, and fully deserve the disaster that >they're looking for
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| | Re: puzzling probability and roulette a la Mark Brown |
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we know that flipping a coin will create a "tendency" over time to revert to a mean. we know that the stock market can "overshoot" more than flipping a coin before the same reversion over the same time. my question is... what is the "factor", probability...
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| | Re: puzzling probability and roulette a la Mark Brown |
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i have to sympathize with mike here. i enjoy the research, mathematics and intellectual challenge, just like any other science. emotion should not (and better not) have anything to do with trading. you clock in, do your job, and clock out. imho, those...
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