Below is a quote from Steve Jones at CD Systems
Once you have been at it for a few years you will realise the
insignificance and irrelevance of short-term performance (by short-term I
mean up to and including a month). That's because individual bets don't affect
each other in any way - they are all completely independent of each
other, so a short string of results can be good, bad even with the same
quality of bets. Try spinning a coin several hundred times (it's worth it
just to realise) and record results. 50/50 chance every spin but the
sequences will vary wildly, there's a 50/50 chance of
hitting a losing (or winning) sequence of 9 whilst spinning the coin. Those sequences will be replicated
with your even money bets, so imagine how they are exaggerated with bets
at higher prices. That's why short-term results are totally irrelevant in
the scheme of things. If the scheme of things is right then the long-term
results will be too.
http://www.cdsystems.uk.com/index.htm
Back to me, I cannot let Steve get all the wise words in.
Once I understood sequences, it became the foundation/ under pinned the daily emotional strain.
It simply and rationally places the days trade in to context.
Hi Scot, Sam from The Market Examiner here.
ReplyDeleteJust to say I've been really enjoying catching up with your blog, and am very pleased we're on your "list of ten" so to speak. We'll be doing our very best to keep up our side of the bargain in terms of helping secure those long term gains.
All the best with everything.
Sam