Which trade setup has the higher Expected Value

This feels like some sort of Math quiz! :sweat_smile But I’m curious to see which one’s the correct answer. :sweat_smile:

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If 50/50 = 50% probability, the rest can be figured out. It’s something I wish I knew first.

So far… two votes for the 50/50 and stop at BE when +25.

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I originally thought the +50 profit would obviously be the one with the higher value. :sweat_smile:

I personally like the plain 50 SL 50 TP

So do I - but I don’t understand why any of the things you listed would have a higher/lower EV than any of the others.

Think I must have misunderstood the question, oh well. :neutral_face:

We can only determine EV if we know what the probabilities are and we can only determine probabilities with reference to your system and it’s results, preferably a large sample size.

PS-eg. If system churns out a a lot of 2/1 winners and makes more money than 1/1 then it would have a higher EV

Yep! All exactly the same.

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Correct. I did the maths and they all have the same exact expected value. I’ve left my beast CPU running simulations of these for days and all are same.

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Really interesting finding.
Phil Bull, founder of Timeform (horseracing form book), wrote a book ‘The Mathematics of Betting’. He was a mathematician and very successful bettor of horseracing. Anyway, he postulated - that no fancy staking system could beat or improve ‘level stake’ betting’. Obviously, you can compound but that’s a different matter. Your research would seem to confirm this.

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Some people (possibly including your Mr. Bull?) would say that compounding IS actually “level stake betting” in that the level stake should be defined in terms of a percentage of the size of the account at the moment each stake goes on. I think it’s probably a very sensible view, isn’t it?

(Was there also a Mr. Bear, writing at the same time, to give the opposite perspective to that of Mr. Bull?)

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Whats compounding? Is it like martingale-ing?

No, just defining the “stake” as a percentage of the “bank”, so betting a bit more as the account grows a bit.

Example 1:
With compounding: bank $10,000, stake $100 (1%) at evens, winner, bank now $10,100, next stake $101

Example 2:
With compounding: bank $10,000, stake $100 (1%) at evens, loser, bank now $9,900, next stake $99

So, you can compound after every bet (trade) or daily or weekly or monthly, or after 5% or 10% growth of the account, or however you want to define it. It’s all “compounding”.

(Excuse the crude examples above without commission, etc., but “you see what I mean,” doubtless?)

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Ya agreed. It’ll be the same stake betting when betting a % of the account.

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And to complicate even further - you can also have ‘differentional level staking’, whereby you have a strict band and grade the bets on probability A B C having more A and less on C depending on probability but always staying in the ‘level band’.
Just to throw a spanner in the works - would A cancel C or vice versa and bring us back to B ‘true level’ stakes?
I’m not a maths person but it seems logic to me. :face_with_monocle:

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Can you give an example of how that would work in a trading scenario(s)?

Maybe not, but you’re a horse-racing person, so you have a load more understanding of “staking” than most forex traders, many of whom don’t quite realize that what they’re doing is betting but imagine that they’re actually “trading,” and that currencies are actually changing hands when they open a position!!

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Here is an extremely good video that explains a lot - It is part of a series by SMB Capital
SMB are a real proprietary trading firm and all their videos are priceless - something to watch over Easter.

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Lol… nevermind. Next your going to show me Anton Kreil

I am not going to show Anton Kreil - infact, I am not going to show you anything further - your response is nothing but ignorant and goddam rude - so f… off!

do you think this guy was rude? :wink: , check his answer to my post

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