Monday, 3 December 2007


In my last post I mention "Martingale" staking systems (dodgy, dodgy, dodgy!), well I found the definition for an anti-martingale staking system in wikipedia:

"One activity where money management based on an anti-martingale approach has a recognized value [1] is speculation and trading. Many financial markets have some cyclical component to them, and the approach of an individual speculator or trader may only be appropriate for one portion of that cycle. Using an anti-martingale risk management scheme will increase profits during time periods when a trading approach is working well, while automatically decreasing exposure during portions of the cycle where trading is unprofitable. This is believed to decrease the risk of ruin for trading"

Van. K. Tharp, the financial trading guru, talks about anti-martingale systems in his investing rules. Have a look here: Van K. Tharps rules


Anonymous said...

Hi Richard,

I have just discovered your blog. I have also just started trading. I was very interested to read that computers do not generate true random numbers, which lead me to my next point. I have not traded large amounts for real cash and have been experimenting with various markets. There are so many factors that can affect racing, football greyhounds etc.
Therefore I thought what about X games no ouside influence no politics to move currencies an ideal market.Just random numbers or cards. The price swings are unbelievable. I downlaoded a 3 day trial of a bot set up my system. Paper traded a 7% OF £500 compounding bank.
Eureka I thought on the first couple of days it made £5000. This continued for several days.
However the same system NOW makes a loss of £2000 over the same timescale. When I read your articles, I realised that perhaps random cards or numbers are not random after all.


Richard said...

Thanks for your comment. Its true that a computer can't generate random numbers, but there are ways to give a computer access to true random numbers. This is via a device called a RNG. As I mentioned in my other post, "A RNG is a special piece of kit that can be used to generate real random numbers for use by computers, e.g. it doesn't rely on computer formulae to get numbers, it samples white noise levels or other random external events and feeds that back to the computer.". Have a look on Wikipedia for more details of RNGs.