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

Discussion in 'Trading' started by etfarb, Apr 29, 2013.

1. ### etfarb

I get it there both forms of gambling but can someone give me some direct examples of how the two are similar

The majority lose, the house usually wins.

3. ### etfarb

That make sense

But how can you make a comparison between people comparing horse stats and trading stats...?

4. ### Maverick74

Probability. You'll get quizzed in it if you ever go in for a job interview at a trading firm. Knowing how to calculate conditional probability.

You need to know the odds for the exacta, trifecta, superfecta, quinella, boxed bet, etc.

5. ### etfarb

Maverick,

Thank you!

Can you give me some examples in trading specifically on how conditional probability applies (in a certain situation)

6. ### 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.

7. ### oldtime

when you go to the track, you are betting on a horse to win

when you buy a stock you are investing in anticipation it will increase in value

See the difference?

8. ### 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

9. ### 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

10. ### Maverick74

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

#10     Apr 29, 2013
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