Triumph of the Counter (Win Rate 85-97%)
Were the financial world predominantly one of mere uncertainty, the greatest financial successes would come to those individuals best able to assess probabilities.
That skill, often claimed as the domain of Bayesian decision theory, would swamp sophisticated optimization as the promoter of substantial returns.
I had discussions about the significant advantages of the methodologies highlighted in Inversion Investor over blackjack card counting in several key areas. Firstly, it offers more frequent opportunities for high-probability trades, with win rates often exceeding +80% across various timeframes, compared to the limited favorable situations in blackjack where even a strong hand of 20 only occurs about 38% of the time.
Our approaches also allows for dynamic position sizing based on setup strength, a flexibility not available in blackjack where bet sizes cannot be changed after seeing one's hand.
Furthermore, our approach can take advantage of multiple setups across different timeframes and markets simultaneously, whereas blackjack is confined to a single game or table with fixed rules.
Perhaps most importantly, our methods has greater potential for continuous improvement and scalability. It can be refined based on new data, adapted to changing market conditions, and even enhanced.
In contrast, blackjack card counting techniques remain relatively static and are limited by table limits and the risk of detection. These factors, combined with more sophisticated risk management techniques available in trading, make our approach a more sustainable and a profitable paradigm in the long run.
More importantly, we have liberated ourselves from the confines of the controller and freed ourselves from the shackles of the tasteless. It is one’s taste that will draw them towards what they may be akin to. Consider the atypical financial modeler sifting through spreadsheet after spreadsheet, data mining over second-deviation causality in an attempt to explain the uncertainty. Is that really the formula for investing greatness?
Is that the best?
There is always a market for the best of anything, because the people who appreciate quality always seem to have money. That is as true of stocks and bonds as it is of real estate and antiques.
Strike Zone
Earlier I said the following:
it offers more frequent opportunities for high-probability trades, with win rates often exceeding +80% across various timeframes, compared to the limited favorable situations in blackjack where even a strong hand of 20 only occurs about 38% of the time.
One of the most popular baseball investing analogies is that the beauty of investing lies in the luxury of time to wait for the perfect pitch to come to us.
The fallacy of that idea is that the pitcher is intentionally trying to get you ‘out’. It is a mere unforced error on the pitcher’s part to give you a perfect pitch.
We invert that line of thinking by suggesting that the strike zone is our strength, and the entire strike zone is a perfect pitch.
The Pitch for Today
The setup for today demonstrates the scale of win rates above 85-97% across various time frames, which we choose to select as our strong hand.
We shall do this…