1.) Can randomness in the continuous flow of spins be read?

[VLSroulette]

Moving forward into randomness debate. Results appear after you have voted. If possible, please backup your choice.

[smiley=dankk2.gif]

[sniper]

Hello Friends,

If we were to plot 3 charts, one based on stock prices, one based on financial market movements and the other based on random outcome by tossing a coin, I strongly believe it would not be easy to tell which is which. Even an expert would find it difficult to tell them apart. This is just my opinion. Please forgive me if I am wrong.

Regards

sniper

[VLSroulette]

Hello Friends,

If we were to plot 3 charts, one based on stock prices, one based on financial market movements and the other based on random outcome by tossing a coin, I strongly believe it would not be easy to tell which is which. Even an expert would find it difficult to tell them apart.

Curious you mention this, in roulette the covered amount of numbers used in bet selection is what really counts for charting. For instance, when any even chance is coverted to anything binary, say "1" and "2", you wouldn't be able to declare what even chance does it come from, or even if that is from a layout-based or disc-based distribution.

This takes apart the myth if you divide the wheel in two, there will be longer streaks rather than for instance an "interwined" distribution, say, red/black.

Same applies for dozens/columns, double streets, etc. basically when charting, you are charting results for X or Y amount of numbers covered.

Victor

[gizmotron]

Look what Arte found: For discussion only, link to original provided here.

"Learning to Become a Successful Trader "

nolinks://eminiplayer.blogspot.com/2009/06/learning-to-become-successful-trader.html

The following was posted as a comment by Ziad in reply to a post on Michael Brenke's Blog, but I'm posting it here (with Ziad's permission) because I believe it contains extremely valuable and genuine insights coming from a very disciplined and successful trader. I would also like to include the following quote by Dr.Brett Steenbarger

"Too many traders are looking for setups, when in fact they're the ones being set up."

----------------------------------------------------------------------------------------------


"Hi Michael,

I've been reading your blog for quite a while now but haven't commented yet. However, I feel I need to comment now.

If you don't mind I'm going to be very straight forward, and blunt even, but I hope you'll take it from a spirit of sincerity and genuine desire to help. It's going to be a long comment, so I'm going to break it up into 2 or 3 comments.

Here's the situation as I see it: For the last few months, and possibly much longer, you've just been spinning your wheels while thinking that you are getting somewhere. The reason for this is that you are going about learning how to trade in the wrong way, in my opinion. I say this because I've been trading much less than you, a little over 2 years now, and yet because of the way I went about learning and what I focused on, last year I netted $150k while nearly quintupling my account, without a single losing month, and while only risking a very small portion of my account on any single trade. Now there could be many reasons for the difference in performance, but I think one of the main reasons has to do with what you are focusing on and how you are going about the learning process.

To try to put it as succinctly as possible, in my view traders that are focusing all their attention on "set-ups" and finding out which combinations of indicators work are never going to become profitable. They are trying to follow the advice of trading books that say trading is simple and psychology is everything. So they search for set-ups that 'work', and that can take the guess work out of trading. They want to be "disciplined" and have simple rules that guide all their actions. But there's a few problems with this. Namely, while psychology is HUGE, it's not everything. And while trading is all about simple principles, actually having an edge is NOT simple. It's a myth that you can have a couple simple price or indicator set-ups and make money consistently if only you are disciplined. That's a load of crap. It keeps the dream alive for wannabe traders who never realize what it's truly about. Well let me tell you what it's truly about...

Trading is about being okay with ambiguity. It's about tolerating confusion. It's about sitting with discomfort and being at peace with it. It's about not having an exact script of when to trade or not to trade, or what's really a high odds trade, and being okay with that. It's about exceptions to the rules. It's about contradiction. It's about uncertainty.

And yet traders left and right want to make it simple. They want to reduce it to a few simple set-ups to trade with discipline. And yet the market is not simple. The market is all about uncertainty, and complexity, and ambiguity. Simple set-ups could never capture that, and they can never give you a true lasting edge.

So what's the solution? Is the problem in the simple set-ups themselves? No, it's in how they're being used. The bottom line is, every trader needs to learn to READ the markets. This means that simple rules will not do. There has to be a synthesis of different elements (whether they be price action, indicators, inter-market themes or whatever), and real-time interpretation must take place. It has to be all about CONTEXT. Once you can read the markets, and don't fool yourself it is a very complex process, then you can choose to employ "simple" set-ups to enter and exit. But the real work will be in interpreting the market to see when you should use which kind of set-up. Seeing a hammer or whatever near a support means nothing unless you've identified the broader picture and gotten a sense of the kind of tactics you should be using, and what the odds are for different scenarios unfolding.

Now I know you, and most traders do this to a certain extent, but your main focus is on the set-ups. It's not on reading the market from minute to minute, hour to hour, figuring out the odds of it doing this or doing that, adapting dynamically, and thinking of trade ideas from all your observation as the day unfolds. Rather, it's waiting for some simple set-up to pop up and then taking it.

Now is it easier emotionally to have clear set-ups to wait for and trade in this simple manner? Absolutely. But who said 'easy' would make you money. If I've learned anything, it's that the market rewards what is hard to do. It's hard to have ambiguity surrounding your market reads. It's hard being uncertain. It's hard dealing with competing and sometimes conflicting signs. And yet, this is what it's all about. You have to stop trying to avoid this by needing things to be clear cut. And is it hard to be disciplined when there's so much uncertainty about what is the right trade to make? Of course. But instead of trying to avoid the uncertainty by looking for simple set-ups, or some straight-forward method, train your mind to be able to deal with the uncertainty.

As for the learning process of how you go about doing this, it's all about being constantly engaged with the markets, trying to figure things out and learn from experience. For me, for instance, what I did was each and every day take notes in a journal all about market action and what I think it means, and how I should trade, and what is working and what's not. I didn't write a journal describing the trades I took, or what my emotions were during the day. It was all about market action. And it was all my perception and interpretation. Day after day, week after week, making mistakes, wrong calls, being clueless as to what was going on, not knowing how I should trade, not knowing if my views made sense or not, and yet I continued taking notes and learning. Then I would view charts and combinations of historical intraday charts, and I'd note certain behavior. For example, I'd study trend day after trend day and try to notice what they had in common and how I could have picked up on it in real time. Then I'd study range days. Then I'd study a price chart of the ES versus the Advance decline line and see what the relationship was across many different days. Then I'd do the same with the ES and TICK chart. And on and on. Over time, this gave me a feel for the markets, and a certain understanding of how certain days differ and many subtle signs and tells for each type of environment and context.

As for set-ups, I didn't use any predefined ones. I just formed trading ideas and then tried to get in at good trade locations. Even this, which is the art of execution, is quite complicated and not straight forward. I started realizing that in some environments it's best to wait for pullbacks, in others I need to get in at market or I'll be left in the dust. In some markets I can buy low and sell high, in other markets the opposite is in order. And so on.

I became consistently profitable in a timeframe of a few months by doing this. But of course before that I had read 30 or 40 books and so I had all the technical background. I had also worked a lot on my psychology and personal issues. But all of this was in conjunction with a method of learning and trading the markets that was mostly in opposition to what the general wisdom says about simple set-ups and exact rules.

Now of course you might say that everyone has their own style, some discretionary and some not. Absolutely. But even the purely mechanical traders are very adept at reading markets, and are aware of all of the complexity and ambiguity inherent in it. Their system might end up being simple, but it will come about through a very deep and complex understanding of markets. And usually this system will take the market environment (i.e. context) into account. It wont just be simple mindless set-ups.

In the end, all of what I am saying is meaningless unless you come to a personal realization. Take a look at your trading career thus far. Do you truly believe that if you just learn to focus and take all of your set-ups then your equity curve will reverse and you'll be a consistently profitable trader? Why would the world's top institutions spend millions and billions on R&D when a few simple set-ups could make them all of the money. This doesn't mean that to make money you need extremely complex mathematical models. Far from it. What it does mean is that you need extremely complex mental maps that take time and experience to develop, and that will never develop if you spend the whole trading day simply waiting for set-ups to materialize. That just won't cut it.

Right now your learning curve is stagnant because you're not truly studying the markets. Your day is wasted in waiting mode. It's not in observing and absorbing mode. Also, because you fear loss, you aren't willing to experiment. This means that you aren't making mistakes and failing regularly, which is what you need to do to learn quickly.

So to conclude, based on all of the above, my advice to you would be to stop trading and make a mental shift. Realize what you need to do to become successful, and it's definitely not staying on this endlessly unfruitful path being supported by the hope of future profits. You're just running in your place unless you change your focus and your learning method. And if you thought the journey was tough so far, you haven't seen anything yet. Get ready for uncertainty and ambiguity like you've never seen it before. But this shouldn't be scary. It should be exciting, because this is what trading is all about. This is why it's called an ART. And it truly becomes one when you change your focus and your learning process. Then everything, including success, becomes possible. And until then, it'll be a distant dream that keeps appearing to be so close and yet stays so far away.

So you need to re-align with a new thought system and then get on the simulator and trade. Take losses. Make mistakes. Be clueless. Don't be afraid of it. It's okay, that's the only way you'll progress. And trust me, progress you will.

Best of luck to you, and I wish you much success.

Ziad"

[madupz4]

The other day I came across this system which attempts to use randomness and the global result.  However I am having a difficult time making sense of where he says, "the player must compare his global result to the + mathematic losing level (MLL)."  Any ideas?  He says he has never lost in over 300 games and 120,000 hits.  Gizmotron, what do you think?

nolinks://nolinks.freeadultstuff.us/gamble/302systems/WINWITH.pdf

[gizmotron]

All I can do is reflect what the global effect means to me. I see times when streaks run in packs. I see small streaks of reds running with small streaks of blacks. At the same time, when that happens, sometimes the other ECs do the same thing. So the global effect migrates across different tracked groups at the same times. You might say that the global effect has a strength percentage rate to it. A single isolated dominance does not reflect the simultaneous existence of a noticeable global effect. I use the global effect because when it is present it is like a fortune teller saying "go for it you fool."  I find that attacking roulette with the global effect working is like taking free money from an ATM machine.

[Spike]

He says he has never lost in over 300 games and 120,000 hits.>>>

I can tell by looking at it that it doesn't work. The guy has no understanding of random or he wouldn't embarrass himself with such crap.

[potatochips]

He says he has never lost in over 300 games and 120,000 hits.>>>

I can tell by looking at it that it doesn't work. The guy has no understanding of random or he wouldn't embarrass himself with such crap.

Me too, i find Gizmo has no understanding of random and what he writes most of the time is pure crap.

[winkel]

This takes apart the myth if you divide the wheel in two, there will be longer streaks rather than for instance an "interwined" distribution, say, red/black.

Same applies for dozens/columns, double streets, etc. basically when charting, you are charting results for X or Y amount of numbers covered.

Victor

Victor, this has been tested with Hamburg spins. And there is no difference (apart from normal distribution).

br
winkel

[gizmotron]

Me too, I find Gizmo has no understanding of random and what he writes most of the time is pure crap.

People should know that I have suggested that practice, 1000 of hours of it studying systems, methods, including thousands of hours of real playing all contributed to my understanding of randomness as is applies to Roulette. I have never seen a contribution from potatochips that has been helpful to me. So judge for yourself. You don't need his advice. Or... maybe you do.

[Spike]

Gizmo has no understanding of random and what he writes most of the time is pure crap.>>

Potato Chips should hang out with Sausage, he'd be more entertaining.

[The Spiders Kiss]

Sausage are you a Pork or a Beef man?

[The Spiders Kiss]

I thought as much...as i understand it the beefy's knowledge of randomness is so poor that you could only be prime pork!

[lucky_strike]

Yes.

Cheers LS

[lucky_strike]

-