Re: When can you be confident that you are a winner?
Going straight by the math we have the following:
ROI = Your Win % / Your Expected Win %
1.1414 = 0.54 / Your Expected Win %
So, Your Expected Win % = 0.47 (47%)
There is a Standard Error in Your Win % that depends on your sample size: err % = sqrt(Win% * Lose% / Sample Size)
err% = sqrt (0.54*0.46/374) = 0.026
So, your Win Percent with Error is 0.540 +- 0.025, while you need a Win Percent of 0.470 to break even.
0.540 - 0.470 = 0.070, a 0.070 difference,
0.070/0.025 = 2.8 Standard Deviations.
Looking this up on the Standard Normal Curve, we see that based on your current performance, the probability you at least break even on another representative sample is 0.997, 99.7%. So, I would state that mathematically, you have established your methods as viable, and if you continue to use them in the same way should continue to win.
50 picks is a small sample, 400 is decent. If you continue, try hard to stick with what you are doing and hang in there.
If you make 50 picks, with a 54% hit rate, you expect to hit 27 +- 4, between 23 and 31 of them, so there is about a 15% chance that your are even or behind after your first 50 money picks.
|