Dumb traders make as much money as smart ones

[Iron]

http://www.youtube.com/watch?v=gx9eg9KJ ... re=related

[mister man]

just skip to 5:30 of the video. imho

the guy on valium voicing the vids is obviously pilled up to numb his pain..

talk about slow, no impact or punch...

anyhow being dumb in gambling terms works for me..

[Photon]

It's called randomness

[mister man]

agreed

[Iron]

The fact that there exist consistently successful traders proves irrefutably that, on one level at least, the market isn't entirely random.

Jeff

agreed

[Euler]

It all depends on how you define random.

I regulary win money off people on social nights out because they think a coin toss is random. Which of course it is, but it isn't in certain circumstances. Nothing to do with weighted coins or anything.

[Euler]

I guess what the original point was, is that people lose money through bad decisions and may perform better at random.

[Iron]

It all depends on how you define random.

What I'm getting at is that, whilst no-one can ever know for sure what the market will do next, certain exploitable patterns appear time and again.

Let's say you had a two player exchange: you vs a computer who offered and took money purely at random, with no strategy. Long-term, there'd be no patterns in the randomness, and therefore no way to beat the machine. So the fact that you can consistently beat Betfair proves that, whilst the market is random on one level, there is also order there.

I regulary win money off people on social nights out because they think a coin toss is random. Which of course it is, but it isn't in certain circumstances. Nothing to do with weighted coins or anything.

You'll have to share this trick with us!

It's nothing to do with the coin landing on its side, is it?

Jeff

[Euler]

It's got nothing to do with the coin, just the way people incorrectly interpret the chance of something happening at random.

[mister man]

at this point i throw into the equation, the law of averages...

[Iron]

Not sure what you're getting at - Can you elaborate please?

Jeff

at this point i throw into the equation, the law of averages...

[mister man]

randomness and the law of averages go hand in hand.

coin toss, in theory its 50/50 i know i know dont start that one about its not...lets say roughly its 50/50 on each toss.

the lottery numbers, the roulette table...

the law of averages, are the counter weight to randomness...

penalties and dodgy decisions that even out over the season (managers say or dont) etc,etc,

33% of favs win, somedays it might be 60%, but you know soon enough it comes back in line...

tbh i think the whole title of the threads wrong anyway, as nobody has defined dumb or smart,nor can they, but only be their own definition...

happy gambling

[Iron]

Mister Man

I agree about randomness and the law of averages, ie if you toss a coin 10,000 times, you'll get about 5,000 heads and 5,000 tails.

I don't see what your point is though. Are you saying that the markets are random, and therefore trading is like betting at odds of 2.0 on the toss of a coin?

Jeff

[Euler]

The law of averages isn't actually a law at all, in academic circles it's know as the gamblers fallacy.

The Gambler's fallacy, also known as the Monte Carlo fallacy (because its most famous example happened in a Monte Carlo Casino in 1913),[1][2] and also referred to as the fallacy of the maturity of chances, is the belief that if deviations from expected behaviour are observed in repeated independent trials of some random process, future deviations in the opposite direction are then more likely.

[Zenyatta]

I guess Peter offers something like tossing the coin twice and asks, which sequence is more likely:

HT [heads, tails] or
TT [tails, tails]

Without thinking, some might say the first sequence is more likely, but of course both are equally likely.