It seems to me that I've come up with a way to almost guarantee that one is a profitable trader. Obviously I'm assuming there is some flaw or it would be widely known as its not that complicated. Imagine thahe only knowledge you can ascertain about publicly-traded, liquid asset with constant price corrections due to market forces, is the price. For simplicity, it is infinitely divisible and there are no fees or spreads that you must overcome. With no other knowledge about the asset, there is a 50% chance it will go up and a 50% chance it will go down. you have $100. Knowing that the asset has a volatile price, you put $25 in hopes to scalp profit from a small upward movement in price. The particular volatility in this market means you will either gain or lose 1% in the time frame you will be invested. Because of the 50/50 odds, this strategy will consistently give you a return/loss of $0 as losses and gains will cancel each other out. When you lose 1%, you put the $50 you have left into the asset realizing that the odds of a 1% increase are now 2/3 in order to bring the probability that the asset will increase back to 1/2. The returns from this second trade over 3 instances: 2*.5=1-(1*.5)=.5 and the returns of the whole $75: 2*.75=1.50-(1*.75)=.75 So the returns of on the assets under both instances would be as follows: +1% -> 25+(25*.01)=25.25 -1% -> 25-(25*.01)=24.75+.75=25.50 The reason that -1% would yield higher results is because more than double is invested on the upswing. Obviously, this theory would not actually work under all market conditions because of how prices tend to continue to go in the direction that they are already going. But in a market in which prices bounce up and down, one can probably come up with even better than a 50% chance of guessing which direction the price will go by using technical analysis (chart-reading) to buy at the established low. I apologize if this doesn't make sense as I'm pretty exhausted right now. but I wanted to get some feedback on this. If need be, I'll come back after some sleep and try to fix it.