Money management system and Dollar Cost Averaging

[the_mathman]

A questions:
Can we use The "Dollar Cost Averaging" principle and apply it in our betting money management system ?

Have you some link or reference about this argument?

Or it is a bad idea borned from my dead mind?

[bztips]

Here's a link to a prior post I made about this topic. Just my opinion of course:

http://forum.sbrforum.com/handicapper-think-tank/584615-risk-ruin.html#post6063795

(Post #14)

[Numbnuts]

Interesting read, thanks.

[Thremp]

Great post bztips. DCA is seen as a free lunch among laypeople, but only has selective application. In reality you'll DCA your Kelly BR into whatever as you extreme future production for actual production (like those years of chattel slaver your progeny comprise become actual money once sold into child slavery. Or when you work your job and get paid.)

People get confused with DCA as its easy to mistake things that look like it (A person investing the same amount each month due to not having more money. For example money taken out of a check) from actual DCA (keeping money idle).

In short, no.

[the_mathman]

Here's a link to a prior post I made about this topic. Just my opinion of course:

http://forum.sbrforum.com/handicapper-think-tank/584615-risk-ruin.html#post6063795

(Post #14)

thank you for this reference :-)

[BeatingBaseball]

Here's a link to a prior post I made about this topic. Just my opinion of course:

http://forum.sbrforum.com/handicapper-think-tank/584615-risk-ruin.html#post6063795

(Post #14)

When it comes to the market, I can't agree that plunging in with your whole stake is a good strategy unless you have extraordinary discipline to stop yourself out if the trade goes against you.

Most professional traders scale into positions. They see it as arrogant and the hallmark of an amateur to think you can't be wrong. Pros know better than anyone that there is no such thing as a sure thing.

Fundamentalists will add to a position and DCA down if the play comes back in. Momentum traders will only add to a position that is working. Either way, they keep some powder dry and give themselves more than one shot at a profit.

[bztips]

When it comes to the market, I can't agree that plunging in with your whole stake is a good strategy unless you have extraordinary discipline to stop yourself out if the trade goes against you.

Most professional traders scale into positions. They see it as arrogant and the hallmark of an amateur to think you can't be wrong. Pros know better than anyone that there is no such thing as a sure thing.

Fundamentalists will add to a position and DCA down if the play comes back in. Momentum traders will only add to a position that is working. Either way, they keep some powder dry and give themselves more than one shot at a profit.

I don't disagree with you. But the point of my post was not to suggest that you should actually "plunge in with your whole stake". It was a limit-type argument against the conventional argument that DCA is a good idea because you "buy more shares when prices are low and less shares when prices are high".

If you really believe that the stock (or other investment) is going to rise in value during your investment horizon even though it will have ups and downs (and why else would you invest in it), then on average you're likely to do better by putting more in at the beginning rather than spreading it out.

[BeatingBaseball]

Looks like the difference in perspective on this goes to the very real distinction between "investing" and "trading."

[Thremp]

How exactly would you apply that idea of what professional traders do (I would argue most are incredibly incompetent at risk management) to sports betting?

[BeatingBaseball]

How exactly would you apply that idea of what professional traders do (I would argue most are incredibly incompetent at risk management) to sports betting?

I was not suggesting any direct correlation whatsoever. I was simply responding to the post in the link to which bztips directs us in post #2 here. In that post he discusses DCA in the context of the stock market and his take that it is a bad strategy.

If you're saying we got off topic, I agree. The one take away that I'd say is common to both, however, is that one should never make the play you have to win - should not over bet a given play - and should always keep some powder dry, some bankroll alive. But I expect most of those in the tank who are pure "black box" modelers who follow very disciplined, formulaic staking such as Kelly don't have to deal with such questions.

[fminc]

When it comes to the market, I can't agree that plunging in with your whole stake is a good strategy unless you have extraordinary discipline to stop yourself out if the trade goes against you.

Most professional traders scale into positions. They see it as arrogant and the hallmark of an amateur to think you can't be wrong. Pros know better than anyone that there is no such thing as a sure thing.

Fundamentalists will add to a position and DCA down if the play comes back in. Momentum traders will only add to a position that is working. Either way, they keep some powder dry and give themselves more than one shot at a profit.

Not exactly.

Scaling in is no more +ev or -EV, it is what it is.

U buy a mkt at price A, but for quarter stake, for every time it goes A + 1 tick, it goes A - 1 tick.

Without getting complicated (and i can do that, if anyone expresses interest, i do not write well though), what I am trying to say in a nutshell .......... is this ........ and this in a way goes back to the ridic progressive strats u see bandied about all the time ........................................ ...... a money management strategy of any kind, and I mean any kind, will NOT help u define an edge on the mkt.

And as a sportsbettor, if ur trying to BTCL, then ur edge (if u have a working model) is present in a window at that exact moment, so maybe in the sports context it makes no sense to scale in. Im new in this area so please bear with me.

But trading wise, u see people who prefer a scaled in approach, the pros justification is if their original risk allocation was 0.5% they might make a preemptive 5 entries of 0.1%, the chumps obv are martingaling it when they avg down. Bottom line, no one can predict the next 10 ticks or even the next tick, so the times u save money by getting in better will be cancelled by the times you get in worse, or actually miss out. Basically its a myth, position sizing is exactly what it is, getting in two at a time is no worse then a 100, which is no better then 1.

Great forum.

[Thremp]

^ Incorrect. DCA has a lower edge due to lowered exposure to +EV "wagers". Though this doesn't really apply to sports betting.

[That Foreign Guy]

I tend to BTCL. This means on average future lines provide worse returns for me than current lines. Why would I want to bet at a worse price or increase the size of a bad position?

[fminc]

DCA is a money management term, has no effect on ur edge, that is what i meant, sorry for the confusion.
But DCA can be detrimental in the fashion u say, but that is entirely subjective to the singular trade not the overall system (i mean "trading system" here, u get my point), DUCY??

[Thremp]

No. Its hard to understand what you're even saying.

[fminc]

No. Its hard to understand what you're even saying.

money management by itself does not create an edge or eliminate it ...............basic jist

(but u knew tht already).

and what does "No" mean??

[fminc]

One more thing Thremp, i didnt mean the comment above sarcastically, ive bin reading u for three years, so i kinda postulated tht u knew this, the reason i was surprised was the reason i wrote the second post anyway (at you).


basically

DCA has a lower edge due to lowered exposure to +EV "wagers" this is incorrect, period.

DCA does not affect ur edge. ((Look up Hanovers posts on Forex Factory, they contain the most comprehensive explanation, of this common traders myth, that i have seen anywhere on the net)).

Now I do concede, in Sports it might be different, maybe maybe, im pretty sure its not. (basically reminding u, i was talking about the prob of the market going from 94 to 95 as much as to 93 (u see ?), from a trading standpoint, but i dont see the difference, yet.

sorry about the haphazard writing, i really cant help it.

[fminc]

One more thing Thremp, i didnt mean the comment above sarcastically, ive bin reading u for three years, so i kinda postulated tht u knew this, the reason i was surprised was the reason i wrote the second post anyway (at you).


basically

DCA has a lower edge due to lowered exposure to +EV "wagers" this is incorrect, period.

DCA does not affect ur edge. ((Look up Hanovers posts on Forex Factory, they contain the most comprehensive explanation, of this common traders myth, that i have seen anywhere on the net)).

Now I do concede, in Sports it might be different, maybe maybe, im pretty sure its not. (basically reminding u, i was talking about the prob of the market going from 94 to 95 as much as to 93 (u see ?), from a trading standpoint, but i dont see the difference, yet.

sorry about the haphazard writing, i really cant help it.

[Thremp]

My "No" was in response to DUCY.

DCA lowers your exposure to the market. (Get a sheet of paper out and check this out.) If we assume the market is a constant +EV "bet", lowering your exposure will always reduce your total EV (as EV is additive). You are wrong. Please do not "correct" me with ridiculous assertions.

I also looked for Hanover's posts. I couldn't find them. If he disagrees with me, he is incorrect.

[Melloweitsj]

My "No" was in response to DUCY.

DCA lowers your exposure to the market. (Get a sheet of paper out and check this out.) If we assume the market is a constant +EV "bet", lowering your exposure will always reduce your total EV (as EV is additive). You are wrong. Please do not "correct" me with ridiculous assertions.

I also looked for Hanover's posts. I couldn't find them. If he disagrees with me, he is incorrect.

This is correct.

[fminc]

My "No" was in response to DUCY.

DCA lowers your exposure to the market. (Get a sheet of paper out and check this out.) If we assume the market is a constant +EV "bet", lowering your exposure will always reduce your total EV (as EV is additive). You are wrong. Please do not "correct" me with ridiculous assertions.

I also looked for Hanover's posts. I couldn't find them. If he disagrees with me, he is incorrect.

two things

1) DUCY .... r u serious?? ill leave tht to you

2) if u cant find hanover ...... serious? u mean u actually looked up a forum and could not find this poster, this is hard to believe (cause both are searchable, FF being the premier trading outpost on the net, and hanover{a losing trader fwiw, but a brilliant dude, he just outlined the proof very neatly)

3) "you're wrong", thats lol (thanks for the discussion)

4) PM me ur address, Im gonna send u a hooker, obviously (did u read every post of urs, over the past few years??)

i knw tht was four.



sorry think tank


p.s. i was responding to the trading comment, and i also mentioned this might or might not apply to sports, but tht just went up in the air, cause dudes are always right

[fminc]

"Most professional traders scale into positions. They see it as arrogant and the hallmark of an amateur to think you can't be wrong. Pros know better than anyone that there is no such thing as a sure thing."


THIS is what i replied to Sir. (at Thremp)

Not get the f.uck out of my thread.

[fminc]

^ Incorrect. DCA has a lower edge due to lowered exposure to +EV "wagers". Though this doesn't really apply to sports betting.

ok i just noticed, u urself took sports out the eqn.

So u were talking about trading huh?

prey tell me how u quantify ur edge in trading and then how is tht edge hurt with dollar cost averaging??? u brain surgeon u

or for that matter how does DCA help ur edge ...... hint ... it makes no diff

ill allow u the f.uck back in


but plz, dont think saying incorrect is gonna help u, try and provide some reasoning, like i tried (i dunno if i wanted to waste my time actually explaining it to anyone so i refferred u to someone better then me, u couldnt find him lol), im here to gain not lose, and i cut my losses short. i for one think ur a moron who got a lil knowledge somewhere and now needs to get laid bad. any logical person who has read u, will come to tht conclusion 80-20 split. Full kelly on that is 16%.

[fminc]

How exactly would you apply that idea of what professional traders do (I would argue most are incredibly incompetent at risk management) to sports betting?

what % of pro traders u think are incompetent at risk management ? ..... lets say u think X%

how bout percentage of sportsbettors incompetent in risk mgmt, according to you? Y%

Whats is ur diffrential between X and Y??

And Why?

try and answer a question, once in a while. a dude like hanover is ur daddy btw (fwiw he is still a losing trader i think), so before u discredit someone u dont knw .... u get the rest


After comparing X and Y above, why did u ever make this post???

Knowing tht EVERYONE and their mother knows ideas in trading and sportsbetting overlap, why did u make the above post, Socrates?

I know this is nit picking, but im trying to make a point. And the point is this. i like this forum, and i knw like every forum, there will be dic.ks, well my point is ur the One and only D.ick i dont want to hear from. Everyone else is welcome. Why?

U should know why.


for ur sake, i hope u comply. Thanks .... bin real/

P.S. (Hanover might be a losing trader, but he is ur daddy, light years ahead of u, not because of intelligence, ill give u one guess).

[Thremp]

What a mush of thoughts/insults.

I don't want a hooker. My posts are either for my own amusement or to give back to a community that has done so much for me. (Mostly enabling me to have a lifestyle that doesn't require hookers to have sex with a living breathing woman. Though hookers do afford me a chance to experience the opposite.)

What you're doing is including a non-fixed estimate of edge when "averaging in". This isn't DCA. DCA is a choice between a lump sum investment or DCA. The DCA option always has a lower total EV due to a lower amount of exposure. This would also apply to any trade where YOU KNOW YOUR EDGE/TRUE VALUE (and also making the assumption there is some trigger to reach it). Again, basic math and a sheet of paper will prove this to be true.

I found hannover at that forum, but not his posts on DCA. Could you link them? I'll gladly point out where he's wrong, if he disagrees with me.

I think most traders are incompetent at risk management because they struggle to quantify their edge. Without an assessment of your edge, you're unable to manage risk. (This should be obvious.) If a trader can't tell me their edge on a position, how can they manage risk? Most sportsbettors I know can tell me within a fairly tight range what their expected edge on a position is.

I'm unsure how this hanover fellow is my daddy. Though I understand really simple math really well. So if he disagrees with me on a basic idea he has to be wrong. Its okay. Sklansky is a great mathematical poker theorist. He's vastly my inferior when it comes to calculating no-vig lines (because I can read Ganchrow's posts and he apparently can't). So... Whether hanover is more capable at many other things is entirely irrelevant.

I'm sorry you're butthurt, but you need to 1) understand what DCA is 2) learn basic math.

[fminc]

What a mush of thoughts/insults.

I don't want a hooker. My posts are either for my own amusement or to give back to a community that has done so much for me. (Mostly enabling me to have a lifestyle that doesn't require hookers to have sex with a living breathing woman. Though hookers do afford me a chance to experience the opposite.)

What you're doing is including a non-fixed estimate of edge when "averaging in". This isn't DCA. DCA is a choice between a lump sum investment or DCA. The DCA option always has a lower total EV due to a lower amount of exposure. This would also apply to any trade where YOU KNOW YOUR EDGE/TRUE VALUE (and also making the assumption there is some trigger to reach it). Again, basic math and a sheet of paper will prove this to be true.

I found hannover at that forum, but not his posts on DCA. Could you link them? I'll gladly point out where he's wrong, if he disagrees with me.

I think most traders are incompetent at risk management because they struggle to quantify their edge. Without an assessment of your edge, you're unable to manage risk. (This should be obvious.) If a trader can't tell me their edge on a position, how can they manage risk? Most sportsbettors I know can tell me within a fairly tight range what their expected edge on a position is.

I'm unsure how this hanover fellow is my daddy. Though I understand really simple math really well. So if he disagrees with me on a basic idea he has to be wrong. Its okay. Sklansky is a great mathematical poker theorist. He's vastly my inferior when it comes to calculating no-vig lines (because I can read Ganchrow's posts and he apparently can't). So... Whether hanover is more capable at many other things is entirely irrelevant.

I'm sorry you're butthurt, but you need to 1) understand what DCA is 2) learn basic math.

Yeah sorry bout tht.
Ill do the needful some other day. exhausted.

[fminc]

That day is today.

And yeah what I meant eight years ago was, and still stands today.

You can't gain an edge from a money management system. Which is what you furiously implied back then.

My writing was haphazard, as I was always in a rush and not really used to forums.You obviously were not content to be theoretically wrong, you started to chide me on my writing skills.

Anyways you wrote some decent stuff, back then at least. But you were very wrong and will always be as far as this topic goes. I also think by now, you know that.

If you need a proper explanation using the basic math that you assume I don't know, post your stand about DCA again, and I'll gladly tear it to shreds. I don't wanna be talking to a ghost, you know. Posting any replies to it right now that are unsolicited would be taking it back to the pre copernican times.

[tsty]

You are wrong

[HeeeHAWWWW]

8 year old thread, that's some quality necro-ing.

[danwinkler]

This MM by betting resource is by far one of the best money management that has been working for me. You can set the max bet % to be aggressive or conservative depending on your roll.

When you use that strategy it is important to create multiple portfolios using the spreadsheet and money management. For examples, if you follow certain capper religiously on a forum, then you create a portfolio with a bankroll allocated towards his picks. And you create another portfolio with a separate bankroll to follow your own picks. If you follow more people, then create a separate portfolio and save the spreadsheet. When a capper only does flat bet on all games, then simply use the max bet % that you have set as each bet size.

This works great for tracking purposes and see who is doing better. This way, i someone that you follow starts sucking, it won't affect the other portfolios.