Technical investment analysis methods applied to roulette

[Colbster]

I am not surprised at the lack of bets.  The trend would need to be severe to get up to the extremities.  That is why I like the gradual direction.  6 out of 10 vs 5 out of 10 can make us a LOT of money if we identify it.

[amk]

As long as 10% goes to a charity........

[Nickmsi]

Previously reported:               Stop Bet when trend Ends
Under 3 in a row losses:  25          38
4 in a row losses     20                  16
5 in a row losses      9                   6
6 in a row losses      12                 0
7 in a row losses       0                  1 
8 in a row losses       1                  1
9 in a row losses       3                  0

Here is the revised figures based on stop betting when the trend ends.  Much less severe.

Thanks again for posting this moving average method.

I think there is a lot more here than people realize.

[Bayes]

Come on, were the real markets random, on a "random walk"... no one would  be playing those, which would have collapsed more than a few times since the big one.

Well, the "Efficient Market Hypothesis" says that markets are essentially random, although not everyone agrees with it. It's certainly the case that if you take small time frames, outcomes ARE random, but over longer periods there may be underlying trends which reflect the economic and political climate.

However, crashes actually point to the market being NON-random (a bit like getting 100 reds in a row in roulette).

[Colbster]

And, random or not, there are certainly regular patterns that we can use to exploit whatever underlying trends and influences there are.  By using moving averages, we can witness the exact same trends of peaks and valleys as a market.  I have attached a very brief example of the visual dynamic I am speaking of below, based on the opening spins of Bayes' BV NZ spins file.  I have plotted the average number of "High" spins over the past 10 spins.  Notice the rhythmic ups and downs, and especially the support/resistance lines.  Anyone who has ever looked at stock charts will find these very familiar, and therefore, able to be useful with any of the charting tools we might use in other endeavors.

[GARNabby]

It's certainly the case that if you take small time frames, outcomes ARE random... 

Ever hear of "micro-trading"?  No name dropping, or hypotheses involved.  Only the certainty that if you have the fastest hardware and software, then you are able to make your trades before the existing trends can reverse.

However, crashes actually point to the market being NON-random (a bit like getting 100 reds in a row in roulette).

And more crashes would point to it being a "random walk", as i noted.  And only the largest players can effectively ride out the crashes.  No randomness there either.  Unlike the casino-games, though those aren't really random either, where there are NO such "market forces".

[amk]

If there were no corruption in the markets and nobody was allowed to use software which was faster then 99% of the competition then the markets would be more "random". I say this because if this was the case the markets would fluctuate differently.

Definitely benefiting everyone

[GARNabby]

Please share with us. Your insights would help greatly. I am sure they will not enter the trash bin.

Flattery will sometimes get you everywhere.

Straight-up "random walking" is about the fact that if you wait long enough playing an even game, then one side will be up a given number of wins.  That will yield a very-small percentage, generally less than the HE, when it does happen for the player betting that side.  But eventually, it will swing the other way to the point that all such gains will be lost, and you'll be starting over again but less the full-HE amount.  (For any given number of wins, one could review all of this backwards from such a starting point to the same number of overall losses which were "balanced out".)

Regardless of the HE being slightly- positive, or negative by the advantage strategies, those sorts of casino-games revolve primarily about the remainder, the 50-50.  After you've figured out how to beat an even game, by how far to extend your BR, by which slight progressions to nest when, egs, then you can start to get fancy with the straight-up RW stuff.

Of course, other types of 50-50 approaches must be considered.  In baccarat, the game on which i'm focused, the shoes almost-always end up in a solid mixture of P's as well as B's.  If you bet only B, then you will will be right close to half the time; if you bet both ways, on average, then you've likely created the small chance that you will have a lot right, or a lot wrong.  There are some other things you can do here, but the objective is to avoid the back-and-forth outcomes, where you're only paying the commission, to crowd your strategies to beat the game head-on against a lot of wins, or a lot of losses... where those strategies can do the most good.  (In baccarat, the L/W's will exactly even out over-and-over-again over the long run if an even combination of P's and B's have been played.)

[Bayes]

Ever hear of "micro-trading"?  No name dropping, or hypotheses involved.  Only the certainty that if you have the fastest hardware and software, then you are able to make your trades before the existing trends can reverse.And more crashes would point to it being a "random walk", as i noted.  And only the largest players can effectively ride out the crashes.  No randomness there either.  Unlike the casino-games, though those aren't really random either, where there are NO such "market forces".

Even if your software is fast, it still doesn't give you a crystal ball. Price movements are essentially probabilistic, just like roulette outcomes. True, there's a psychological element which is missing in casino games, which means that movements in the market can drive activity in a certain direction (past prices can affect future prices), but the results are nothing more than the sum total of thousands of trader's opinions, which tend to cancel out (if all traders had the same opinion, there would be much less randomness).

Why would more crashes point to randomness? surely the opposite is the case. Roulette outcomes conform to the normal distribution, but events in the world and opinions aren't necessarily constrained in the same way - the "wheel" of opinion can sometimes become heavily biased!

Unlike the casino-games, though those aren't really random either, where there are NO such "market forces".

So if casino games aren't random either, what IS?

These debates seem to depend on the definition of what "random" actually is, but it's a very tricky concept. How do you know if something is "truly" random? apparently random outcomes sometimes appear to be non-random, and paradoxically, if you don't sometimes get non-random behaviour in a random game, then you don't have "true" random! 

The fact is that short-term trends do exist, and can be exploited, whether you're talking about casino games or trading.

[marivo]

3. Beginning at J3, I started counting how many high spins we had in the previous 10 spins using formula       =countif(A1:J1,"H").  This formula I copied as far as I had copied the formula from step 2.   it should be  =countif(A2:J2,"H"), right?!

4.  Beginning at S4, I took the average number of high spins from the previous 4 results, using formula:     =average(P4:S4).  I copied this formula as far down row 4 as I had the other formulas. it should be  =average(P3:S3), right?!

5.  Beginning at S5, I took the average number of high spins from the previous 10 results, using formula:   =average(J5:S5).  I copied this formula as far down row 5 as I had the other formulas. it should be  =average(J3:S3), right?!

Or am I wrong?

[Colbster]

@Marivo   No, I was trying to visualize on a computer that didn't have Excel installed.  You are absolutely correct.  When I get a chance, I will update the original post and delete your post to reduce confusion for people who are just getting started reading this thread.

Despite my error, this method has only lost once with the session BR of 40 using the 10x1 Labby.  My wife is sick and needy, so I am having to sneak mini-sessions in right now, but it is performing great!  You should definitely run this yourself and give me a note if you have any questions.

Thanks for the clarification!

Colby

[maestro]

@colbster    hi mate sorry being pain but is it possible to get excel tracking tool as i am not able to do one myself just my old brain has big resistance area to such a programs... thank you

[vladir]

Well, the "Efficient Market Hypothesis" says that markets are essentially random, although not everyone agrees with it. It's certainly the case that if you take small time frames, outcomes ARE random, but over longer periods there may be underlying trends which reflect the economic and political climate.

However, crashes actually point to the market being NON-random (a bit like getting 100 reds in a row in roulette).

If you investigate and go deeper in this issue, you will discover the markets are not random, mainly because they are manipulated by big players. And this is not conspiracy theory, a BIG player can and does influence things on many levels.

[vladir]

@Colbester  Just one question mate, why 4 and 10 ? What logic you used to come up to this values?

[Colbster]

The trends in roulette don't last for too terribly long, so I didn't want the high (slow) number to be too high that it would lose it's effectiveness.  10 seems like as good of an arbitrary number as any other.  I originally was thinking of 3 for my fast number, but felt that it would be to susceptible to whipsaws and doubles/triples to be very good.  There is probably someone who is able to optimize these numbers and tell me what the "best" numbers are, but I do not have the first clue how we would do that.

Also, one of the Forex trading methods I have played around with lately used 4 and 10 sessions for the SMA cross-over.  That is what actually got me thinking in this direction.  Don't know that they are the best, but they are certainly very effective from what I have seen so far.