If you don't have trouble waiting for your setups then you have the world by the shorties.
Break a leg!
Probability and Trading
- Thread starter sridhga
- Start date
Break a leg!
You get to figure that out. No one here will answer that question for you.
Are you asking these questions because you want someone else to crunch the data and figure it out for you? Or are you asking how these things are figured out? Figuring it out is fairly straight forward if you have the data and some coding/math skills. You will have to better define the question, of course. Lots of detail has been left out in your questions.
Asking these questions means you want someone else to do work for you "sava".???
Let's say someone says odds are X, what good is that to you? Did they test for it or is it just a hunch?
Do they know you, your trading style, size of your account, your real risk tolerance, etc?
I am just triggering a discussion. I am a successful trader myself.
If you think you need further details, please ask.
Last edited:
Then I think the discussion can be summed up like this: Any set of conditions you can imagine can be tested to see how they historically performed in the market. This is commonly done but rarely done for the benefit of others.
On this internet forum you do not know others and you still chat with them. Like, for example, you are now talking to me.
"Setups" do not form in a vacuum which is why you have to test your own signals given your understanding of the context in which they occur. Bulkowski's stats are meaningless without that context. Before a trader has a chance to put the odds in his or her favor, and yes a skilled and disciplined has the odds in favor, the trader has to fully understand price behavior. There are sources where you can learn what to look for and what they may look like but there is no substitute for the experience of extensive observation of price development and subsequent testing.
Let us now look at it from another dimension.
Mathematics has an interesting topic called 'Chaos Theory' which evolved in the last 3 decades and is still evolving.
Most engineering kind of math is linear. Chaos is non-linear math it talks about random events/variables and is applied to events in nature/society/stock markets etc.
Most of us look at charts in a linear fashion. Like, say for example, we are looking at them from a time frame perspective. But those charts are not dependent on time and so a linear math formula cannot be derived. That drives us to the concept of probability. That's why we draw trend lines and trend channel lines etc. as we assume the distribution of data to be in that range.
With further development in artificial intelligence, the applications of chaos theory can advance further to throw new perspective on stock markets. Then we can see a paradigm shift in our charting methods.
Mathematics has an interesting topic called 'Chaos Theory' which evolved in the last 3 decades and is still evolving.
Most engineering kind of math is linear. Chaos is non-linear math it talks about random events/variables and is applied to events in nature/society/stock markets etc.
Most of us look at charts in a linear fashion. Like, say for example, we are looking at them from a time frame perspective. But those charts are not dependent on time and so a linear math formula cannot be derived. That drives us to the concept of probability. That's why we draw trend lines and trend channel lines etc. as we assume the distribution of data to be in that range.
With further development in artificial intelligence, the applications of chaos theory can advance further to throw new perspective on stock markets. Then we can see a paradigm shift in our charting methods.
Last edited: