How advanced mathematics and gaming theory can help you as a trader

Welcome to futures.io.

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:

We work extremely hard to keep things positive on our forums.

We do not tolerate rude behavior, trolling, or vendor advertising in posts.

We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.

We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help? 1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first. 2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses. 3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make. 4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance. 5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers. 6) Help using the forum? Watch this video to learn general tips on using the site.

If you want to support our community, become an Elite Member.

The following user says Thank You to Big Mike for this post:

I use Andrews pitchfork. Many dont like this kind of stuff but as it is all i have really learnt I love it, Its funny how when ever i see a chart some one posts price seems to just fly all over the indicator but with forks everything looks like its bouncing in the right place.

When I was trading in an office I remember listening to the squack. Here you can hear when Goldman Sachs makes a move. Many times I notice that they buy and sell at key points that i also use just they do so more selectively.

Your charts seem to disprove what i think fat tails is saying.

From my understanding Fat tails suggests that every toss is independent of the previous one. Yet he says that the odds of having 3 tails in a row is .5 x.5x.5

Maybe i havent thought about enough but it seems that as the string gets longer the "chances of having another head after a streak of heads is getting slimmer.

the chart where there is an increased bet placed after a string shows that it favours profit. from what i remember the negative was 2000 but the max positive was 3000, this could be luck but who knows. Even that one line that goes to the 3000 dollar line can be some thing that can be played. If you were to bet a chart like that over and over and favoured the buy side you'd end up really happy i think. In esence its a the "slight edge" we may all look for in trading. But yes it could be a big anomaly but in general there anomalies are wiped out over many runs.

also the other (i think last chart) shows something similar to my previous mentioned card flipping idea. and that is that there is a maximum to how big a string can get. which means that there is some form of "memory" as you call it.

Seems to me, some one who sah not really looked as deeply in to this as yourselves that you are backing up 2 opposing theories.

1. the odds decrease as strings go on (seen mathamatically) .5 x .5 x .5 = less then .5
2. solid objects dont have memory ?

and the second theory is where your logic seems to come from. There is no math or science there, the word memory was just used for lack of a better word and this makes it even more believable as only living things can have memory.

If things are not dependant on previous flips there would be no reason to revert back to the 50 50. if we do revert back to the 50 50 over many tries this indicates that previous flips must be accounted for in order to get back to the 50 50. That is to say the coin must keep a memory in order to revert to a certain percentage.

now again, i haven't really learnt all about this stuff, this is just my opinion which is usually wrong and not from any research. I'm sure some math genius has figured this all out. but untill i read it (when i have time as im very focused on trading right now) and i truely understand it then and find that the words used in the conclusion match the math ( this is usually where there is an issue in science) then Ill be happy to be better informed

randomness (50-50) can be charted and the randomness disapears as seen on your charts. step back they all look very symetrical (except the one where bet was increased).

I'll probably change my position on this as the convo goes on or i read past posts/links im sure

To arrive at the chance of three heads in a row you multiply .5 three times. If you now want to calculate the chance of 4 heads in a row you just extend the string by *.5. this proves that the single event has got a .5 chance in order to give the 4 heads in a row event the chance of .5*.5*.5*.5

yes but the last flip is a single event. even though it is part of the string. I imagine that the falasy would say state that the last flip has in a string has a 50 50 chance. the fact that the we mutiply the odds togeteher to get a smaller the 50 50 i would imagine is common sence?

I cant even tell what side your on.

the question should be.

if a coin is fliped 3 times , and 2 heads show up, what are the chances that the next flip comes a head also.

since the last flip has not been made, do we just assume it is an individual flip at 50 50 or do we look at the previous flips and say that it is .5 to the power of 3 ?

In order for it to be a falasy it should go against common sence to some respect and common sence would state that the last flip is not a 50 50.\

if you believe the last flip is a 50 5o, then all flips are 50 50.

if that the case then why do we even quote the formulae .5x..5 x .5 ?

maybe im just unclear on what side you are on or maybe im not understanding something here

All tosses are .5, and that is not my belief, it is the very definition of a fair coin toss.
If the last toss was not .5 how could we then calculate the exact probability of the string by .5^n?
Doesn't this clearly prove that each individual coin toss is .5? Otherwise the calculation wouldn't work.

The charts do not disprove independency. The odds for having 3 tails in a row are .5 x .5 x .5 = .125, because the tosses are independent.

This is a fallacy. There is no maximum. However, the probability for a long string is inferior than the probability for a short string. If you want to get 10 tails in a row, the probability calculates as 1/1024. This means that statistically you need to run 1024 experiments of tossing a coin 10 times to observe the event "10 tails in a row" once. Even with 1024 experiments, it is not sure that you will observe the event, as there are random elements that contribute to the outcome.

The odds do not decrease, the odds for a single toss remain at 0.5. The calculated probability for three tosses in a row is larger than the calculated probabilibty for 4 tosses. This means that the probability depends on the number of consecutive tosses, but it does not decrease.

Objects do not have a memory,. If you have somebody who cheats when throwing the coin - consider that guy has a memory how he manipulated the previous toss - then there may well be a dependency between 2 consecutive events.

The following 2 users say Thank You to Fat Tails for this post: