Reworded the question for clarity (see edits for original post):
How can one knowingly foresee where a 50/50 prediction model will be profitable?
For previous posts: I understand that if I have a 50/50 chance of winning the grand prize for a lottery, it should take two ticket purchases to win (assuming the there is a pattern from an algorithm that hasn't changed between purchases). Obviously this is not a realistic scenario.
I am assuming that each movement is independent of the last, so the only way I see a 50/50 model as profitable is when predicting large moves is successful half the time and stop losses are implemented to cap the losses. A 50.1-60 / 49.9-40 can be profitable if transaction costs are low, but only under in a high-frequency environment... Although it takes a long time to get from London to Paris taking 6 steps forward and 5 steps back.