Successful Trading - Probability Theory (Video)
Watch only about the mat. waiting is the first 10 min, I disagree with the rest. New York stock exchange from Aleksey Sokolov on Vimeo.
Probability theory
Thoughts on the expected value
Let's try to apply a bit of theory, taking the average results, and see what we can achieve by observing only the Expected Value in our trading system, no super deals. Initially, we have a 10C stop in the stock, but taking into account the average slippage of 12С, we set the commission 0.006С. The profitable trade is 45С. The ratio is about 1 to 4 it turns out Position in 1000 shares with us Consider 2 Options : BUT) First 3 our trades are always minus 12C on 1000 shares this 120$ with commission 132$. Fourth deal plus 45C always. B) First 2 our trades are always minus 12C on 1000 shares this 120$ with commission 132$. Third deal plus 45C always. Suppose that on average we do 10 deals per day.