Coin Flip Strategy !!

Since trading off on Saturday and Sunday, I have googled on the topic and found some amazing stuff !!

A simple coin flip gives a hit ratio of 50% on a fairly long trials, say 100 or so.

I have checked on banknifty the following strategy using coin flip strategy. For coin flip i have used this LINK.

The game starts at exactly at 10 AM when the bar closes. Flip the coin. If "Heads" go long with a stop loss of 30 points and a target of 50 points. Wait until either of them hits. Risk to reward is fixed throughout the game.
When one of them hits, now wait for immediate next hour close. Say first trade closed at 12:05 PM. So, the next hour will be 1:00 PM. Now, flip the coin. If "Tails" this time, go short immediately on next bar open. Again wait for target or SL hits. Donot open a new position after 3:00 PM.

The bet on this game is simple. On a fairly large trails(say 100), the hit rate should be around 50% ie 50 times. So, the winners should fetch 2500 points. The loosers should shed 1500 points. Gain of 1000 points minus brokerage, taxes etc.

The probability of loosing streak is also limited. Check yourselves.

Enjoy the game !!!

Insights are welcome.

hi

the idea is good and would give very good results with one precondition.
'each time you put a trade, bnf is gauranteed to move in one direction by at least 50 points'. you are not taking into account the times when bnf moves by 25-30-40 points and then reverses. since your sl is 30 points and target 50, there will be more occasions when your sl will get hit and target not achieved.

regards

Our own market judgement will definately be correct more than 50 % of the time. Use judgement instead of coin flip . I have seen many successful traders trading on their judgement....no chart, no calculations.But in their mind they are very clear that Reward to Risk and the success rate of their judgement will make money for them.

Smart_trade

Very good point Anuragji, I was about to say this. Other option is instead of taking call at 10 am, do so at pivots! It will break or fail, but at least 50 forward points will be guaranteed in that case of break success. :thumb:

BTW Linda Raschke trades this way with millions of dollars....so you not alone .....:thumb:

Regards,
Gaur_Krishna

I have an AFL which marks fractals both up and down on the chart. Considering them to be pivots, I have tested on Nifty this series on the following conditions.

1. Entry with 2 lots on break of fractal with a stop loss of 10 points and initial target of 20 points. First lot to be booked at fixed target of 20 points. Then bring SL of 2nd lot to breakeven. Keep the SL of second lot at breakeven until the price touches 40 points profit target or breakeven or eod which ever happens first. If it touches 40 points exit second lot. If it retraces on touches breakeven, exit the trade. If either of these conditions occur then exit at eod.

2. Second entry will be close of both lots of first entry. Now look for fractal break again. This time fractal need not be immediate. Whichever fractal breaks first that will be entry. Again, follow same rules as above.

A total of 21 trades resulted in this series on Nifty till today. Scored 237 points. Brokerage, slippages, taxes are to be excluded. I donot actually trade Nifty, so unable to guess what could be net of charges.

I am giving below example of today chart depicting the trades and fractals.