It just is. It is how the trader deals with uncertainty that is either good or bad.
Steve Nison vs Al Brooks (who's the best marketer ?)
- Thread starter TurtleLearner
- Start date
So, if they lean towards certainty is that good or is that bad for a trader?
"Balance of probability" is not quite the same as probability. There is no numeric specificity upon which you can hang your hat with any certainty. Uncertainty is the ugly cousin of probability.
That would be inserting the psychological strenght or weakness of a trader into the situation. I am referring to the market itself and the benefits/advantages or cons/disadvantages of its leanings for a trader especially in terms of potential profitability.
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My perhaps-simplistic first reaction is that that's good, because it produces enough behavioral duplicability for some statistical edges to be both possible and viable.
So is uncertainty the product of probability or is probability the product of uncertainty?
With true uncertainty, you do not have a legitimate probability distribution. Trading does not offer a true probability distribution, and you should not mistake a frequency distribution of past trades or market behavior as giving you numeric specificity of future probabilities. Uncertainty is more murky than probability. It requires a wider berth.
So there is a false uncertainty and a true uncertainty? False uncertainty would offer true probability? And frequency distribution of past trades cannot indicate future probability? So are we at 50/50 on all trades? Anyone agree? If so, how do we arrive at 50/50? Through a frequency distribution of past trades or past market behaviour?
I once heard “price is the best indicator of price” Is that true? If so, does that make price a leading indicator?
I also heard “volume is the only leading indicator of price.” Is that true?
How do you, as a trader..investor...calculate balance of probability if not by frequency distribution of past trades, price action, and market behaviour?
"Balance of probability" is not calculated with numeric specificity. It is roughly estimated with a wide margin for error based in part on the frequency distribution of past market behavior. If you can legitimately get more accurate than that, as with a genuine probability distribution, then you must be a savant.