How can i calculate the probability of sucess between 2 strategies?

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Mrluck07
426
Mrluck07  

If someone has 2 strategies with 70% win rate each one, and they have very different time entries , what's the probability of having 2 loss trades at the same sequence of trades?

example

sequence of trades:

 X  I   I   I  X  I   I  I   I     strategy 1

I   X  X   I   I  I  I   I   I   strategy 2

What's the probability of something like  X X loss in both strategies at the same sequence,to happen?

thanks for any help

Amir Yacoby
1219
Amir Yacoby  
Mrluck07:

If someone has 2 strategies with 70% win rate each one, and they have very different time entries , what's the probability of having 2 loss trades at the same sequence of trades?

example

sequence of trades:

 X  I   I   I  X  I   I  I   I     strategy 1

I   X  X   I   I  I  I   I   I   strategy 2

What's the probability of something like  X X loss in both strategies at the same sequence,to happen?

thanks for any help

If you make 10 trades in each strategy and you ask what is the probability to get the 9th trade in the sequence lost in both of them then:
1st strategy - each trade loss probability is 30 pct, i.e. 1/3
2nd strategy - each trade loss probability is 30 pct, i.e. 1/3.
For the 9th trade to lose on both is 1/3×1/3 which is 1/9
zerocash
25
zerocash  

0,3*0,3 = 0,09 = 9%

If you assume that, historic data = future data

https://www.youtube.com/watch?v=5NMxiOGL39M

Mrluck07
426
Mrluck07  
thanks for answer,  this is also valid for the all the 1,2,3.. trades in the sequence or just the 9th?
Amir Yacoby
1219
Amir Yacoby  
Mrluck07:
thanks for answer,  this is also valid for the all the 1,2,3.. trades in the sequence or just the 9th?
Since eah trade in both strategies is 30 pct loss, this will be the answer for any consecutive two losses, and it does not matter from which strategy. 
Meaning 1 and 2 from 1st strategy
Or 1 and 2 from 2nd strategy
Or 1 from 1st and 1 from 2nd
Or 5 from 1st and 7 fron 2nd etc..
All of these 2 loss series (any 2 loss series) are 1/9 probability.
Mrluck07
426
Mrluck07  
Amir Yacoby:
Since eah trade in both strategies is 30 pct loss, this will be the answer for any consecutive two losses, and it does not matter from which strategy. 
Meaning 1 and 2 from 1st strategy
Or 1 and 2 from 2nd strategy
Or 1 from 1st and 1 from 2nd
All of these 2 loss series are 1/9 probability.
Ok so does it mean that if you combine two 70% win strategies you can increase the winning by 90% chance? I mean, if you lose in one side, you recover on the other strategy
Amir Yacoby
1219
Amir Yacoby  
Mrluck07:
Ok so does it mean that if you combine two 70% win strategies you can increase the winning by 90% chance? I mean, if you lose in one side, you recover on the other strategy
No.
Strategy 2 does not know you just lost in strategy 1.
Same as you wont increase the odds in one strategy after a loss
Mrluck07
426
Mrluck07  
Amir Yacoby:
No.
Strategy 2 does not know you just lost in strategy 1.
Same as you wont increase the odds in one strategy after a loss
ok thanks for explaining
Amir Yacoby
1219
Amir Yacoby  
Mrluck07:
ok thanks for explaining
Lets say you gave me strategy 2 but you kept for yourself strategy 1.

I trade by strategy 2, and dont know about strategy 1. Do you think that just because you did a trade according to another strategy and lost, this will increase my chances?

I wish :)
Mrluck07
426
Mrluck07  
Amir Yacoby:
Lets say you gave me strategy 2 but you kept for yourself strategy 1.

I trade by strategy 2, and dont know about strategy 1. Do you think that just because you did a trade according to another strategy and lost, this will increase my chances?

I wish :)

Yes i think it would increase if i tell you that i lost

Correct me if i'm wrong,

A If you have 2 strategies with 70% wins, the chance of lose trades in the same sequence, on both strategies is only 9%. So that means 1 in 10, right?

B If the chance is only 1 in 10, that means 9 in 10 times, there will be lose trades, but only in 1 strategy, and the other one on the same sequence will win, is that correct?

C So you have a 90% win strategy, because you just need to 1 strategy to lose money, and trade the next one, because you know the chance of lose that trade will be only 1 in 10.
Marco vd Heijden
Moderator
8151
Marco vd Heijden  

Some people think trading is high speed money.

But then they discover that a snail moves faster then the trend.

You can combine anything you want, even with a 90% win strategy, a snail can only go so fast.

12
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