Tennis Trading : False edge? Am i fooled by variance?

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jimibt
Posts: 2591
Joined: Mon Nov 30, 2015 6:42 pm

Mon Jun 29, 2020 12:28 pm

Jukebox wrote:
Mon Jun 29, 2020 12:22 pm
offlimit88 wrote:
Mon Jun 29, 2020 10:57 am

If you toss a coin 120 times, what is the chance that you have 70% heads and 30% tails?
A way to find out:
First set up a spreadsheet with the 1,329,227,995,784,915,872,903,807,060,280,344,576 different possible outcomes of 120 consecutive single coin tosses 'P' - then count up the number of of those outcomes that have exactly 84 heads 'n'. Then simply calculate n/P
OR... you could use statistical calculations (if you don't want to wait for excel 2050) :D

https://www.universalclass.com/articles ... tcomes.htm

offlimit88
Posts: 68
Joined: Mon Feb 25, 2019 2:29 pm

Mon Jun 29, 2020 2:35 pm

Wow this is going to be interesting :D
Is there anyone smarter than me who can figure this calculation out? :D

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jimibt
Posts: 2591
Joined: Mon Nov 30, 2015 6:42 pm

Mon Jun 29, 2020 2:53 pm

offlimit88 wrote:
Mon Jun 29, 2020 2:35 pm
Wow this is going to be interesting :D
Is there anyone smarter than me who can figure this calculation out? :D
lol - if you read the article i linked, then the 2nd or 3rd worked example is almost exactly what you're after

https://www.universalclass.com/articles ... tcomes.htm

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ruthlessimon
Posts: 2014
Joined: Wed Mar 23, 2016 3:54 pm

Mon Jun 29, 2020 2:56 pm

ShaunWhite wrote:
Sun Jun 28, 2020 4:37 pm
If you see an anomaly in the data then without a real world reason it's a prime candidate for reversion.
Hence why modelled strategies are powerful. If it works long-term (good sample) & the drawdowns are manageable, the real world reasons come for free.

https://financial-hacker.com/build-bett ... d-systems/

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ShaunWhite
Posts: 6188
Joined: Sat Sep 03, 2016 3:42 am

Mon Jun 29, 2020 4:53 pm

ruthlessimon wrote:
Mon Jun 29, 2020 2:56 pm
ShaunWhite wrote:
Sun Jun 28, 2020 4:37 pm
If you see an anomaly in the data then without a real world reason it's a prime candidate for reversion.
Hence why modelled strategies are powerful. If it works long-term (good sample) & the drawdowns are manageable, the real world reasons come for free.

https://financial-hacker.com/build-bett ... d-systems/
Nice link.
Perhaps if people spent as long learning about this stuff as they do reading TiTZ, they wouldn't need to read TiTZ. It's more related to another thread but top traders don't struggle with psychology, not because they're mastered their mind but because they've mastered their craft.

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ruthlessimon
Posts: 2014
Joined: Wed Mar 23, 2016 3:54 pm

Mon Jun 29, 2020 5:21 pm

ShaunWhite wrote:
Mon Jun 29, 2020 4:53 pm
Perhaps if people spent as long learning about this stuff as they do reading TiTZ, they wouldn't need to read TiTZ
I thought that was a porn mag for a sec :mrgreen:

offlimit88
Posts: 68
Joined: Mon Feb 25, 2019 2:29 pm

Mon Jun 29, 2020 6:47 pm

I give up. Waiting for reversion
lol

offlimit88
Posts: 68
Joined: Mon Feb 25, 2019 2:29 pm

Mon Jun 29, 2020 6:52 pm

ShaunWhite wrote:
Mon Jun 29, 2020 4:53 pm
ruthlessimon wrote:
Mon Jun 29, 2020 2:56 pm
ShaunWhite wrote:
Sun Jun 28, 2020 4:37 pm
If you see an anomaly in the data then without a real world reason it's a prime candidate for reversion.
Hence why modelled strategies are powerful. If it works long-term (good sample) & the drawdowns are manageable, the real world reasons come for free.

https://financial-hacker.com/build-bett ... d-systems/
Nice link.
Perhaps if people spent as long learning about this stuff as they do reading TiTZ, they wouldn't need to read TiTZ. It's more related to another thread but top traders don't struggle with psychology, not because they're mastered their mind but because they've mastered their craft.
Titz are two, easy math, i love titz

jameegray1
Posts: 329
Joined: Wed Nov 21, 2018 6:16 pm

Tue Jun 30, 2020 12:46 am

jameegray1 wrote:
Sun Jun 28, 2020 8:41 pm
ShaunWhite wrote:
Sun Jun 28, 2020 5:32 am

Problem is James that charts are like fractals, you don't know what zoom level you're looking at. That dip might be almost invisble after a year, and you might not know what happened before it started. How does it look if you put a trendline on that? origin zero. I'm guessing it's still +ve.
Crazyskier wrote:
Sun Jun 28, 2020 7:28 pm

Reversion to mean can indeed be a bitch!

LOL. I've set it running again on lowest possible stake. Will keep you informed ;)
Calling ShaunWhite. Can I stop it now? ;)
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gazuty
Posts: 1692
Joined: Sun Jun 26, 2011 11:03 am

Tue Jun 30, 2020 1:01 am

Jukebox wrote:
Mon Jun 29, 2020 12:22 pm
offlimit88 wrote:
Mon Jun 29, 2020 10:57 am

If you toss a coin 120 times, what is the chance that you have 70% heads and 30% tails?
A way to find out:
First set up a spreadsheet with the 1,329,227,995,784,915,872,903,807,060,280,344,576 different possible outcomes of 120 consecutive single coin tosses 'P' - then count up the number of of those outcomes that have exactly 84 heads 'n'. Then simply calculate n/P
https://stattrek.com/online-calculator/binomial.aspx
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