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Thomas:
I haven't played the game, but I visited the web site and read the rules
for the High Five game. The High Five game is a good example of the use of
expectancy. You have 5 stocks from which to bet that will give you the highest
percent increase tomorrow. If you win, you get 3 times your bet. Now, the
probability of winning is 0.2 (1 chance out of 5). So, your expectancy is E=
0.2*3 - 0.8*1 or -0.2 (negative 20%). You have a negative expectancy
system, so in the long run you will lose. However, if your trading system
increases the odds above 20% due to your edge, then you can have a positive
expectancy system. To break even, your system of picking the right stock has to
increase your odds to 25% winners (E = 0.25*3-0.75*1 = 0). So, you haveto have
a system that is right more than 25% of the time to win consistently over
the long run.
To implement MM into the game, you can start out with $100,000 equity and
bet only 1% on any one day ($1,000). If you win, you now have $103,000, so
your next bet is $1,030. If you win, your new equity is now $106,090, so your
next bet is $1061. Etc. If you lose on your first bet, your new equity is
$99,000. So, your next bet is reduced to $990. This is an anti-martingale MM
strategy. If, over the next few bets, you increase your equity to, say,
$120,000, you can begin taking higher overall risks by betting the market's
money plus your own. So, you could bet $1,200 of your own equity (still 1%)
plus, say, 5% of the $20,000 winnings ($1,000). So, your next bet would be
$2,200. If you win, you add $6,600 to your equity (rather than simply 3*$1,200
or $3,600). So, MM has increased your winnings by 83% on this bet without your
risking any more of your own money.
Thanks for the post. If I have time, I might try playing some of the games
to practice MM. Of course, I first have to have a good trading system, which I'm
still working on.
Al V.
----- Original Message -----
<BLOCKQUOTE
>
<DIV
>From:
Thomas Zmuck
To: <A title=amibroker@xxxxxxxxxx
href="">amibroker@xxxxxxxxxxxxxxx
Sent: Saturday, October 26, 2002 4:52
AM
Subject: [amibroker] Has anyone tried <A
href="">http://www.stockbets.com/ ?
<FONT face=Arial
size=2>Hello,
<FONT face=Arial
size=2>
Has
anyone experience with <A
href="">http://www.stockbets.com/
<FONT face=Arial
size=2>
It looks very
interesting.
<FONT face=Arial
size=2>
With the "High
Five" game, you can make 200% /day.
But there are also
other games.
<FONT face=Arial
size=2>
What isgood? What
is bed?
<FONT face=Arial
size=2>
Works all
correct?
<FONT face=Arial
size=2>
<FONT face=Arial
size=2>
Every comment is
very appreciated.
<FONT face=Arial
size=2>
<FONT face=Arial
size=2>ThomasPost
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