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Not that I say much these days, but Mickey is not all that wrong. The
central limit theorem is a key theory in probability. So using a fair coin,
the odds are 50 - 50 of getting a head or a tail. The theory, and I want to
underscore the theory, states that as the coin is flipped indefinitely and
approaches infinity. The result will be a 1 in 2 chance of being heads. But
the actual event of flipping the coin can produce subsets that contain a
long string of tails or heads. If a long string of tails occurs, then the
central limit theorem would then require that the frequency of heads would
need to increase. So as you look at the raw data the outcomes {H,T} is only
50 - 50 in the limit. And as one member H or T increases in frequency. The
other must eventually increase in frequency. The problem is that we don't
know when.
Not to speak for Mickey, but this is the observation that I understood he
was conveying.
However, one question I have is. What distribution are you using to build
your statistics? Poison, Gamma, Normal, etc.?
Harley
----- Original Message -----
> Rubbish, Mickey.
> While you still have a bankroll, buy a roll of pennies and start flipping
> :o)
>
> Bob
> -----Original Message-----
> From: owner-metastock@xxxxxxxxxxxxx
> [mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of Michel Amelinckx
> Sent: Thursday, April 13, 2000 11:10 AM
> To: metastock@xxxxxxxxxxxxx
> Subject: RE: Money Management Stops
>
>
> Sorry but I by this "every time you have a losing trade the odds of your
> next
> trade goes up" I meant the PROBABILITY of next trade goes up. You always
> have 50% odds.
>
> > If the success rate is 70%, it's true that there is about a
> > 99% chance of
> > having 4 losing trades in a row. However, once you've
> > already had 3 losing
> > trades, the chance of the next trade being a success is still
> > only 70%.
>
> No I don't agree, a system 70% prof. and having 3 consecutive losing
> trades - the probability that the next trade will be a successful is 99%.
> If you have a system that is 55% correct of the time. If you wait for 4
> consecutive losers you have almost an 95% probability that the next trade
> will be successful.
>
> Same thing with roulette, they hate me in the casinos because if I play
> roulette I play on red and black. I wait till red (black)past 3 or 4
times
> in a row and then play on the other colour. And the longer you wait, like
5
> or 6 times on red (black) the higher the probability the next will be the
> other colour. Although 6 times the same colour is very rare. And this they
> don't like in casinos.
>
> Greetings
>
> Mickey
>
>
> > -----Original Message-----
> > From: owner-metastock@xxxxxxxxxxxxx
> > [mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of Randy Harmelink
> > Sent: donderdag 13 april 2000 17:24
> > To: metastock@xxxxxxxxxxxxx
> > Subject: Re: Money Management Stops
> >
> >
> > You can't use statistics that way. An increase in
> > probability only occurs
> > if the events are dependent.
> >
> > For example, suppose you are trying to draw an ace of spades
> > from a deck of
> > cards. If you continue to draw and discard cards that aren't
> > the ace of
> > spaces, your probability of drawing the ace of spades
> > increases on each
> > draw. But if you put each drawn card back into the deck and
> > reshuffle, your
> > probability of drawing the ace of spades on a given draw will
> > never change,
> > no matter how many times you fail to draw it.
> >
> > If the success rate is 70%, it's true that there is about a
> > 99% chance of
> > having 4 losing trades in a row. However, once you've
> > already had 3 losing
> > trades, the chance of the next trade being a success is still
> > only 70%.
> >
> > Otherwise, it would be easy to develop a system to beat a
> > roulette wheel.
> > <G>
> >
> > ----- Original Message -----
> > From: Michel Amelinckx <Michel.Amelinckx@xxxxxxxxxx>
> > To: <metastock@xxxxxxxxxxxxx>
> > Sent: Thursday, April 13, 2000 7:58 AM
> > Subject: RE: Money Management Stops
> >
> >
> > > And because you have such a great number of profitability,
> > did you know
> > that
> > > every time you have a losing trade the odds of your next
> > trade goes up.
> > > 70% prof - after 2 consec losing trades - probability next
> > trade will be a
> > > winner is 91%
> > > 70% prof - after 3 consec losing trades - probability next
> > trade will be a
> > > winner is 97%
> > > 70% prof - after 4 consec losing trades - probability next
> > trade will be a
> > > winner is 99%
> >
> >
> >
>
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