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13113119 No.13113119 [Reply] [Original]

Zero risk strategy?

If you trade and make a buy at $30. Then set your target at $35 and set a stop loss at $30 it means the most you can lose is $5 and the most you gain is $5. If you do this for every trade (and vice versa for shorts) then randomly make buys/sells at random times, over the course of a few thousand trades, your balance should not have changed right? It's just statistics.

So provided you do this strategy an only use 1% of your stack, you should never lose money.
But if you have a slight edge, you will make money.

>> No.13113134

>>13113119
brap
sniff

>> No.13113169

>>13113119
Yeah retard you are a genius. I guess why fund manager and banks who trade full time havent come up with this zero loss only upside strategy yet.

>> No.13113280

>>13113169
explain why it wouldn't work

>> No.13113302

>>13113280

You're right.

You're onto something profound.

Go try your big brained discovery with all your cash and become a millionaire!!!

>> No.13113312

>>13113119
>what are trading fees and spread
op you dumb nigger kys

>> No.13113323

It took me 5 years of paperless trading to figure this out OP. You will make it; just dont commit more than you can afford to lose on any given asset.

>> No.13113330
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13113330

>>13113312
>Being this poor and discouraging those around you
>Posting unironically

>> No.13113333

>>13113302
explain why it wouldn't work or fuck off cunt.

>>13113312
on bitmex you have rebate for being a maker. It balances out. If you are a maker on both sides of the trade (if it goes right) or a maker on one side of the trade and taker (stop limit gets triggered) if it goes wrong. Spread is not an issue with bitcoin. The markets are so liquid for anything less than 200 bitcoin it's inconsequential.

>> No.13113336

>>13113280
what makes you think your IQ can handle the explanation?

>> No.13113340

wouldnt it makes sense to learn coding for bot? This strat seems like a waste of time

>> No.13113344

>>13113340
I can code. Why would a bot do anything different? It's much easier to just look at the chart than code all the parameters in. Only need to make like 3-5 trades a day.

>> No.13113590

>>13113344
highly doubt you can code considering you're complete devoid of logical thought.

>> No.13113616
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13113616

>>13113344
>code
Coding is for girls. Real men program

>> No.13113627

I'm not OP, and I'm new to trading.

Could someone explain why this wouldn't work?

>> No.13113630

>>13113616
real men dont arent autistic enough to give a fuck what its called.

>>13113590
oh look its another person calling me a retard. either explain why im wrong or gtfo

>> No.13113666

>>13113627
Mainly fees and bid/ask spread.

>> No.13113682

>>13113666
did you not see the other post i made? bid/ask is not a factor because of maker rebate. and spread is not a factor either consiering how liquid bitcoin is. spread on bitcoin probably only affects less than 0.1% of this entire board.

>on bitmex you have rebate for being a maker. It balances out. If you are a maker on both sides of the trade (if it goes right) or a maker on one side of the trade and taker (stop limit gets triggered) if it goes wrong. Spread is not an issue with bitcoin. The markets are so liquid for anything less than 200 bitcoin it's inconsequential.

>> No.13113695

>>13113682
meant fees not "bid/ask"


these are the fees if it goes right;
+ 0.025% for entering. +0.025% for exiting.

or if it goes wrong;
+0.025% for entering. -0.075% for exiting (stop tiggered and market close).

>> No.13113736

>>13113630
>either explain why
why would I do that?

>> No.13113742
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13113742

Because prices fluctuate too much for your stop loss. I mean I guess if your time is worthless you can sit there and keep executing the trade, but then you're gonna need to have 25k to avoid being marked a pattern day trader.

There's no point unless you're booty blasted about the thought of losing a few bucks. And if you are, just buy index funds and be done with it. Like I hate to be this guy but I shouldn't have to explain something so intuitive.

>> No.13113758

>>13113742
>Because prices fluctuate too much for your stop loss
what do you mean?

>you're gonna need to have 25k to avoid being marked a pattern day trader.
what does this mean as well? Why do you need 25k?

>> No.13113792

>>13113758
And here is why nobody wants to explain why it won't work, you clearly are green.
>buy stock at 10 dollars
>goes up 1 cent
>stop loss of 10 dollars
>will more than likely go down 1 cent that same day
>stop loss executes
Investments fluctuate a LOT when the market is open. They don't just go up. As far as day trading goes, it means that you can only buy and sell the same stock 4 times a week, if you get marked as a pattern day trader, then you can't do this at all unless you have 25k in your account.

>> No.13113806

>>13113792
what? that's not what i'm saying at all. If the price went up by 1 cent then you would have exited with profit because that's where your sell order is.


>, if you get marked as a pattern day trader, then you can't do this at all unless you have 25k in your account.
how new are you to this board? nobody is talking about legacy markets here.

>> No.13113822

>>13113806
Jesus you're some low IQ retard.
>>13113336
this, sincerely.

>> No.13113830

look at all the fucking retards in this thread calling me a brainlet yet not one of you has explained why this wouldn't work.

>> No.13113843

>>13113806
Your sell order isn't at 1 cent retard that's not how limit order works. You set it at 35 dollars in your example. It's not gonna execute at 30.01. Also I see you're one of those crypto retards or whatever the big meme is today so that's enough of this. I'm going back to /smg/. To echo everyone else...

Go on OP you clearly understand the market better than anybody else! Just try it dude! Polite sage

>> No.13113848

>>13113830
Fees.

>> No.13113859

>>13113843
what in the fuck are you talking about. you clearly haven't understood the example in the OP.

>buy at $30
>stop at $25
>sell at $35

there is no "1 cent" stop limit. I was just going by what you said.

>> No.13113871

>>13113859
oh shit my bad. I've just looked at the OP and realised i used the wrong numbers in the OP this is why no one was understanding what i was saying lmao.

>> No.13113891

>>13113871
You're brain dead. Stop doing drugs.

>> No.13113967

>>13113859
So you either win 5 dollars or lose 5 dollars and in any case lose the fees

>> No.13114019

>>13113871
If you mean 1:1 risk ratio and you have an edge so your winrate is >50% then yes you can make money. This is not like making random trades.

>> No.13114033

>>13114019
yeh this is what i was trying to say. here is the correct numbers >>13113859

but even if you just pick entries randomly, and randomly choose to long or short, over time (thousands of trades) the win rate should go to 50% anyway right?

>> No.13114050

>>13114033
But a statistical win rate of 50% means you still lose money overall to fees.

What you are trying to do is basically play roulette at the casino and bet on both red and black, but you will either, on average, come out basically even or at a loss due to the green (in crypto/shares, that would be the fees)

>> No.13114051

You either lose 20% or win 50%
Losing 20% has a higher probability

>> No.13114063

>>13114033
>the win rate should go to 50% anyway right?
https://www.youtube.com/watch?v=kSzk-1ptFzY

>> No.13114068

>>13114050
no it's not true. The maker rebate means that it still balances to zero.>>13113695

>> No.13114099

>>13114068
Also you don't account exchange risk and manipulation risk. Exchange can go bust, owners can exit scam with your money, market can be totally manipulated so the casino always wins, etc.

>> No.13114160

>>13114099
yeh that's true I guess but every trader takes on that risk anyway.
That vid you linked led me to this one as well; https://www.youtube.com/watch?v=pWs1vaxK5rM

Which is interesting. Just by using statistics you can already win even when picking random entries. If you combine it with things like some TA, event based trading etc. it should be much better.

>> No.13114265

>>13114160
>yeh that's true I guess but every trader takes on that risk anyway.
No, all serious traders avoid crypto because its unregulated and the counterparty risk is insane. At least trade on a platform that is fdic insured. I think gemini and coinbase are the only ones. Once crypto hits legitimate exchanges it will change but no serious money want to trade on those shit exchanges. 100% of crypto exchanges are shit. If you put money in a serious brokerage account like fidelity, ameritrade, IB, etc there is a low chance they go bust and even if they do your money in unsured up to several thousands $.
>Just by using statistics you can already win even when picking random entries
Yeah of course you can win but you can also lose. Backtesting doesn't mean it will work live if it was that easy everybody would make money. Market is organic. Your orders have an influence on it.

>> No.13114311

https://blog.quantopian.com/9-mistakes-quants-make-that-cause-backtests-to-lie-by-tucker-balch-ph-d/

>> No.13114319

>>13114311
The past doesn't predict the future? What a shocking piece of information!

>> No.13114326

>>13114319
Im trying to educate OP

>> No.13114502

>>13114265
Bitmex isn't going anywhere. OP is prettty retarded anyway though. Even on Bitmex, orders don't execute perfectly all the time, for example, in a mega dump.

>> No.13114535

>>13114502
bitstamp was the only one i know that was tradable (but laggy) during the insane pump to 20k. I remember coinbase went offline. During the dump from 6k to 3k market orders were disabled that's when I removed all my money. Can't wait to finally trade bitcoin on real exchanges. They are being built right now. Bitcoin futures will come to nasdaq this quarter or the next. Imagine being able to trade bitcoin on your brokerage account: the dream.

And yeah bitmex is a joke. Just a matter of time till it's seized by US gov.

>> No.13114658

ok so after some research apparently using fixed fractional, eventually the result will trend to zero but i'm not sure how.

the forumlae is this;
>1(potential gain or loss) * 0.5 (probability of winning) - 0.5 (probability of losing)
if the result is less than or equal to zero, you should never bet and will always end up losing. I don't quite understand this tho. can you eggsplain pls.

https://en.wikipedia.org/wiki/Kelly_criterion
http://traders.com/Documentation/FEEDbk_docs/2007/08/Abstracts_new/Smart/smart.html

>> No.13114668

>>13114535
see >>13114658

>> No.13114676

>>13113119
You'll get fucked by fees when you keep having to sell at the same price because you're a retard and never pick a winner.

>> No.13114684

>>13113333
I will explain since you have gotten outstanding quads

At bottom, there will always be exchange fees to take into account, some crypto exchanges have super low fees like .02% or whatever but they will always drain your ability to break fully even with this "strategy"

However, as another Anon brought up there is something called spread in the market, wherein there is pretty much always a difference between the top buyer price and the lowest seller price. Thus when you buy it automatically takes away the best seller's offer and the asset will be below the stop loss set at your buyin price.
The only way you could make this work even theoretically is with no trading fees AND a huge seller's order, but the liquidity of these seldseen situations is basically nothing

>> No.13114700

>>13113616
This image, every time.

>> No.13114706
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13114706

>>13113871
Yet still you don't explain in the follow up. You know what, this plan sounds great, spend $100k.

>> No.13114708

>>13114684
read the thread bro i already addressed this.

here;
>>13113695
>>13113682

>> No.13114715

>>13114706
>buy at $30
>stop at $25
>sell at $35

>> No.13114913

>>13114535
I'm not so sure that I want crypto to step outside of its wild west origins and into financially regulated sectors. Kind of gets away from the spirit of what crypto is all about.

>> No.13115102

>>13114913
only path to the moon (100k+) is to become the new gold first and the ultimate store of value. It's a multi trillion dollar market. But for that institutions need to solve custody issues and be able to trade in a safe environment. Bakkt, fidelity, etc.. are coming

>> No.13115120

>>13113119
>>13113280
Transaction costs.