The Great Coin Toss Experiment II Message Board

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Strategies & Market Trends : The Great Coin Toss Experiment II

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To: Sojourner Smith who wrote (176)	6/17/2003 1:42:34 PM
From: bbgold	Read Replies (1) of 188

Hi SS, I will post a reply over here as WLD seems to not want to be bothered with the coin flip. I was just curious if your coin flip calculations would have been the same whether you had bet on either heads or tails? That is one of the problems with stocks or the markets, they can indeed put together a trend that can last for a considerable amount of time. There is also the phenomenon of reaching an exhaustion point and finally changing your bet from heads to tails and the coin continuing to flip against you. I am not sure if it was Jorj but someone had a board on SI a while back that had the coin as one of the competitors for picking the daily market direction. I think that the coin did indeed beat many of the pickers over the course of the competition. Hopefully using some TA will help a bit in determining which way the stock flip might land. When the markets and charts show uncertainty it is often no better than a coin flip though, maybe. Having Good money management is indeed one of the keys to maintaining some capital for when the market is trading against you. Position sizing, stop limits and hedging are all parts of that money management. I am not sure that I would be following the 'double up' theory you are using with the coin flip but limiting your losses to 1% of your portfolio would indeed offer enough limited risk so that you could maintain some cash and hopefully have some of the 'flips' be in your anticipated direction. If the coin-flip method was indeed foolproof then it would have returned the same amount for heads or tails. You cannot bet both sides of the coin and win, that is unless you trade options, then you can bet both sides of the coin and lose <GG>. Enjoy the Day SS! :^)

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