Can somone explain to me what horse betting and trading have in common?

[Maverick74]

Quote from etfarb:

lol I see the difference but thats not what i;m referring to

Let says NQ closed at 2860...

Open ats 2858.... how can you derive odds in the opening on that

or

Lets says Nq closes at 2860, opens at 2870 and is at 2895 by 3 oclock, how would you trade it going into the close

see where i[m going with probabilities and trading

If you know the variance you can predict the distribution of prices with corresponding probabilities.

 

[oldtime]

Quote from Maverick74:

That's false. Very few handicappers bet on horses to win. They bet on horses to place or show.

that's why whenever I go to the track, I always bet on the favorite to show

 

[oldtime]

Quote from Maverick74:

If you know the variance you can predict the distribution of prices with corresponding probabilities.

that's why you always need to check how he ran last time on a wet track

 

[gkishot]

Quote from oldtime:

that's why whenever I go to the track, I always bet on the favorite to show

Bookmakers are so good at setting the odds for each outcome so i doubt one can be profitable in horse betting.

 

[etfarb]

Quote from Maverick74:

If you know the variance you can predict the distribution of prices with corresponding probabilities.

Can the variance be derived from OHLC or does one must use 1/5/10 min bars?

 

[mspkash1]

the answer is lot simpler than everyone suggests.. in horse racing, your odds of winning are 1/n where n = number of horses.
In trading your odds of winning are 2/3.. why, when you guy something at a price, the price can only go up, down or side ways.
You lose only if the price goes down and that too you can control how much you want to lose. If price goes flat, you make nothing but if it goes up, you have the option to hold it as high as it goes.

 

[Maverick74]

Quote from mspkash1:

the answer is lot simpler than everyone suggests.. in horse racing, your odds of winning are 1/n where n = number of horses.
In trading your odds of winning are 2/3.. why, when you guy something at a price, the price can only go up, down or side ways.
You lose only if the price goes down and that too you can control how much you want to lose. If price goes flat, you make nothing but if it goes up, you have the option to hold it as high as it goes.

Not true. Only if you are trading commission free. The vig is what kills most traders. All scratch trades are losers.

You need to change your outcomes.

W is a win, L is a loss, B is breakeven and X is your commish.

1) L+X negative outcome from losing trade

2) B+X negative outcome from beakeven trade plus commish

3) W+X negative outcome from winning trade if X is greater then W

4) W+X positive outcome from winning trade if X is less then W

4 possible outcomes. Only is in your favor.

This is why trading has a 90% failure rate. Que EMG!

 

[TILT2]

Quote from Maverick74:

Conditional probability is written as P(A|B). Which says what is the probability of A given that event B has happened.

What is the probability that the S&P 500 will be up Friday given that the jobs number disappoints?

Or you could look at correlation. If AAPL is .90 correlated to the nasdaq and the nasdaq is up 1% tommorow, how much will AAPL be up given that the nasdaq is up 1%.

Here is an article from seeking alpha that goes over some examples.

http://seekingalpha.com/instablog/4...al-probability-and-the-shrinking-sample-space

Quote from Maverick74:

Not true. Only if you are trading commission free. The vig is what kills most traders. All scratch trades are losers.

You need to change your outcomes.

W is a win, L is a loss, B is breakeven and X is your commish.

1) L+X negative outcome from losing trade

2) B+X negative outcome from beakeven trade plus commish

3) W+X negative outcome from winning trade if X is greater then W

4) W+X positive outcome from winning trade if X is less then W

4 possible outcomes. Only is in your favor.

This is why trading has a 90% failure rate. Que EMG!

Maverick74, I learned something from your posts. You have a very good logic thinking and analysis skills. Thank you.

 

[stock777]

Quote from Maverick74:

That's false. Very few handicappers bet on horses to win. They bet on horses to place or show.

===========================================\
Now why would old mav want to come here and make a horses ass of himself with a statement like this?

We know that most ET posters are posers and frauds when it comes to the markets, but they usually limit their ignorance to stocks and options. maybe a little foolish forex thrown in.

This statement proves that the ignorance extends well beyond Wall St,

 

[stock777]

Quote from nutmeg:

I can tell you why trading is better than horse racing.

When you bet that horse to win and it looks like he is going to crap out - there is no way to get your money back before the race ends.

At least if you think you picked a winning stock and it looks like a dud going into the final turn you SELL.

yes well, what u say is true, but you fail to say that you can easily get back 5 or 10 times your money when you win. and 100's to 1 if you play exactas and other exotics,