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The entry and exit is random, but the market tends to have a bias. If I was flipping a perfect coin I would agree that the results would be ranged evenly around an average. But a random entry / exit test will show a profit in the majority of cases, at least in the Aussie market over the last 10 years.

I guess that point to the exercise is that if a system can't soundly beat random entry and exit then it's not worth trading it.

MichaelD's argument is along the lines of the discussion in the book "Fooled by Randomness". It goes along the lines of - "I have examined 2000 swans and none of them are black. Therefore there are no black swans." Then someone discovered Australia and found black swans.

So - "I have examined a couple of thousand breakout systems and the entry doesn't help the results. Therefore breakout entries don't work." Maybe if 10000 different entries were tested one of them would work. But of course there are time limitations to such work.

<blockquote data-quote="stevo" data-source="post: 288290" data-attributes="member: 2970">The entry and exit is random, but the market tends to have a bias. If I was flipping a perfect coin I would agree that the results would be ranged evenly around an average. But a random entry / exit test will show a profit in the majority of cases, at least in the Aussie market over the last 10 years.I guess that point to the exercise is that if a system can&#039;t soundly beat random entry and exit then it&#039;s not worth trading it. MichaelD&#039;s argument is along the lines of the discussion in the book &quot;Fooled by Randomness&quot;. It goes along the lines of - &quot;I have examined 2000 swans and none of them are black. Therefore there are no black swans.&quot; Then someone discovered Australia and found black swans.So -&nbsp; &quot;I have examined a couple of thousand breakout systems and the entry doesn&#039;t help the results. Therefore breakout entries don&#039;t work.&quot; Maybe if 10000 different entries were tested one of them would work. But of course there are time limitations to such work.</blockquote>

[QUOTE="stevo, post: 288290, member: 2970"] The entry and exit is random, but the market tends to have a bias. If I was flipping a perfect coin I would agree that the results would be ranged evenly around an average. But a random entry / exit test will show a profit in the majority of cases, at least in the Aussie market over the last 10 years. I guess that point to the exercise is that if a system can't soundly beat random entry and exit then it's not worth trading it. MichaelD's argument is along the lines of the discussion in the book "Fooled by Randomness". It goes along the lines of - "I have examined 2000 swans and none of them are black. Therefore there are no black swans." Then someone discovered Australia and found black swans. So - "I have examined a couple of thousand breakout systems and the entry doesn't help the results. Therefore breakout entries don't work." Maybe if 10000 different entries were tested one of them would work. But of course there are time limitations to such work. [/QUOTE]

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