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September 3rd, 2008, 10:02 PM   #1
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Probabilty of consecutive heads/tails in weighted coin toss

Hi,

Can someone please help with this. I keep getting different answers to this from different people.

Supposing you have a weighted coin which lands heads up 70% of the time and tails up 30% of the time.

Q. What is the probability that it lands on tails 20 or more times in a row if I did this 1000 times?

*Also could I have the equation on how you worked this out so that I can change the weighting, number of trials etc (I need to know this for my business!!!)

Thank you very much.

Zak
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September 4th, 2008, 06:22 AM   #2
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Re: Probabilty of consecutive heads/tails in weighted coin toss

Just curious ...What business is that?
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September 5th, 2008, 05:05 PM   #3
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Re: Probabilty of consecutive heads/tails in weighted coin toss

Quote:
Originally Posted by Dave
Just curious ...What business is that?
Hi,

The business is basically currency speculation. I think I might be able to do this full-time, but I need to understand drawdown of the trading account if I am to be profitable in the long run. E.g. if I have $1000 to start with and that goes to $500 (50% loss), in order to get the balance to the original amount ($1000) it will take a 100% gain.

Therefore the drawdown should not really exceed 25 or 30%, which is managable. Thats why I wanted to know that if I trade a number of times with a system that worked say 30% of the time (with winners being bigger than losers) what are the chances of having X losers in a row over a number of trades. I was told in the other post to go to: http://mathworld.wolfram.com/Run.html but I don't think I will be able to understand this. Oh well, for now I'll just risk max of 3% of my account per trade, which I hope will not cause too many problems ::fingers crossed::
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