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Hi, can someone explain how this is calculated,mathematically? I get those values logically, but unable to put it into mathematical format.
=1.04^4 * 0.98^6
=1.42^4 * 0.79^6

1st gives 1.036 which is 3.63 percent gain over 1 and 2nd gives 0.988361
40% batting average means what ? Does it mean that out of 100 trades, 40 are winning trades and 60 are losing trades ? If yes, plain math may be misleading by terminological jungle.

Suppose you had Rs. 1 lakh to start with, and entered a series of trades with the full capital, and had 60 consecutive losing trades, and then 40 consecutive winning trades, the math would be totally screwed up. The bottom line after each trade would decide the percentage of profit/loss for each trade.
 
Telecom lines are unreliable.In this case both the telecom lines failed at the same time.VSat is a much better connectivity from NSE to brokers and then brokers can connect to clients on internet lines. Cost of having a VSat line is hardly rs 10 K per month and most brokers can afford both telecom/internet and also VSat connectivity. If there was V Sat connectivity , the issue could have been much smaller. 10 years ago all brokers ( and also some large trader clients ) used to have VSat connectivity but these days internet is so cheap that brokers may not be having VSat connectivity .

My broker in Mumbai had allowed VSat connectivity to me and I used it for 5-6 years and there was not a single instance of connectivity failure. There were 2-3 instances of some software getting corrupt but it was resolved in 1-2 hours max. In past I had used leased lines also and leased line connectivity is at the mercy of road digging,the signal passing through multiple exchanges and the exchange staff maintaining the uptime of these lines etc

Smart_trade
Haven't head that name VSAT for a long time. Maybe it got discouraged after Tata Comm took over VSNL.

Agreed that any wired connection is superior to wireless, but the wireless does have better integrity. Again, it would depend on the ISP connection in the background.

Your suggestion of using both in parallel sounds very good, if seamless switching technology is available (seamless, as in no loss of ping).
 

iwillwin

Well-Known Member
Haven't head that name VSAT for a long time. Maybe it got discouraged after Tata Comm took over VSNL.

Agreed that any wired connection is superior to wireless, but the wireless does have better integrity. Again, it would depend on the ISP connection in the background.

Your suggestion of using both in parallel sounds very good, if seamless switching technology is available (seamless, as in no loss of ping).
I had used vsnl cable net in surat 15 years back....superb experience
 
40% batting average means what ? Does it mean that out of 100 trades, 40 are winning trades and 60 are losing trades ? If yes, plain math may be misleading by terminological jungle.

Suppose you had Rs. 1 lakh to start with, and entered a series of trades with the full capital, and had 60 consecutive losing trades, and then 40 consecutive winning trades, the math would be totally screwed up. The bottom line after each trade would decide the percentage of profit/loss for each trade.
Yes, it means win percent. But whatever the bottom line after each trade, math works out. For simplicity, we can check this, 50% Wins, 100% avg gain, 50% avg loss. This will be breakeven after whatever iterations we do.
 
40% batting average means what ? Does it mean that out of 100 trades, 40 are winning trades and 60 are losing trades ? If yes, plain math may be misleading by terminological jungle.

Suppose you had Rs. 1 lakh to start with, and entered a series of trades with the full capital, and had 60 consecutive losing trades, and then 40 consecutive winning trades, the math would be totally screwed up. The bottom line after each trade would decide the percentage of profit/loss for each trade.
Its not intuitive, with everything same just having large % winners and losers erases the edge.
Just do it in office .. original example below. End result does not change if you do losers first

Image got deleted .. Anyway just do it in excel with x * 1.42 for winners and x*0.79 for losers calculating against previous value. Same end result irrespective of order. Returns combine through multiplication, so order does not matter - a* b * c vs c * b * a
 

travi

Well-Known Member
Yes, it means win percent. But whatever the bottom line after each trade, math works out. For simplicity, we can check this, 50% Wins, 100% avg gain, 50% avg loss. This will be breakeven after whatever iterations we do.
There are better ways of doing it with more real simulations like Monte Carlo Simulation etc

Bcos in theory Batting Avg is like paper avg. but all trades may not be entered as per our liking ( forward test ).
So after you have a system, run it with MC and see how the edge behaves at 70-75% random entry.

And from the image you posted, its evident even without the Math :)
Risk of ruin is very obvious when you have 21% vs 2% loss per trade.
 

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