The Enigma of it all?

Post Reply
User avatar
rinconpaul
Posts: 112
Joined: Wed Dec 03, 2014 10:39 pm

Much is made of successful trading/betting strategies, but there's one mysterious thing that can happen to the best formulated strategy and that is that history doesn't necessarily repeat! You can historically backtest a strategy on past data or just record all past trades/bets and plot the outcome. It might look like the top left graph of profit after a series of trades/bets.

"Eureka" you cry, "I'm on a winner with this method!"

Unfortunately for many, those good days may never happen again? Monte Carlo simulation will sober you up to what you could expect going forward, might be more profit, losses or a rough patch that will shake many out of the tree as soon as they experience sustained losses? From the attachment, I've simulated 6 times the very same series of bets in random time order, and guess what, it's not all roses! :(
You do not have the required permissions to view the files attached to this post.
User avatar
Euler
Posts: 24701
Joined: Wed Nov 10, 2010 1:39 pm
Location: Bet Angel HQ

I think that any strategy in a trading market probably has to think about the market's response to it. If a goal has no goalkeeper in it, it's easy to score but with one in there, it's going to be a little harder if you kick the ball in the same place all the time.

I had this discussion with somebody recently when I mentioned that I swap automated strategies frequently so it's harder to work out what they are doing. Either that, or it's just good old paranoia.
User avatar
rinconpaul
Posts: 112
Joined: Wed Dec 03, 2014 10:39 pm

Considering the forthcoming new year I should be more uplifting, and respond that everything in this game has an associated risk, BUT? Once you have a monte carlo analysis, it's only a few more mouse clicks to create say 1000 iterations and then work out your % chances of loss vs profit. In the particular case I offered as an example, there was a 2-4% chance of a final loss, over 1000 re runs! You then work out the % for different profit outcomes. Now all you need, is patience and nerves of steel....lol

Hope you all have a profitable 2018. :D
User avatar
ShaunWhite
Posts: 9731
Joined: Sat Sep 03, 2016 3:42 am

...so you get your wallet out, watch the ball fly round the wheel....and the damn thing lands on double zero.

Sorry, that's not a great attitude, pass some of those uplifting tablets over this way Paul. ;)
Post Reply

Return to “Australian”