I came across this method of evaluating how successful a prediction may be in a book called "The Gift of Fear" by Gavin de Becker. Even though it's not a trading related book, since it is about fear, some parts of it actually could be applied to trading. Has anyone else read this book ??? The method can be applied to any type of prediction, although the focus of the book is to predict violence. For now, I will just try to explain the method from the book here, since it is kind of long. Then later I will add some comments relating the method to trading. You start by answering the following 11 questions, then each is given a point value & the points added up to see how successful your prediction may be. 1. Measurability of outcome How measurable is the outcome you seek to predict? Will it be clear if it does or does not happen? 4 - obvious, clear 3 - discoverable & shared definition 1 - discoverable, but fluid or inconsistent 0 - not measurable / undiscoverable 2. Vantage Is the person making the prediction is a position to observe the pre-incident indicators & context? 3 - direct observation / perspective view 2 - indirectly through some medium / proxy view 0 - obstructed or no view 3. Imminence Are you predicting an outcome that might occur soon or at some remote time in the future? Ideally, one predicts outcomes that might happen while they are still significant. Events happening sooner rather than later have fewer intervening influences & conditions. 4 - imminent 2 - foreseeable 0 - remote 4. Context Is the context of the situation clear to the person making the prediction? Is it possible to evaluate conditions, circumstances, relationships & events? 3 - fully revealed 0 - concealed 5. Pre-incident indicators (PINs) Are there pre-incident indicators that will reliably occur before the outcome predicted? Ideally there would be several reliable PINs but they must also be detectable. 5 - several, reliable, detectable 3 - few, reliable, detectable 0 - unreliable or undetectable 6. Experience Does the person making the prediction have experience with the specific topic involved? It is better to have experience with both possible outcomes of the prediction. 5 - extensive with both outcomes 3 - with both outcomes 2 - with one outcome 0 - elemental / partial / irrelevant 7. Comparable events Can you study or consider outcomes that are comparable - though not necessarily identical - to the one being predicted? 4 - substantively comparable 1 - comparable 0 - not comparable 8. Objectivity Is the person making the prediction objective enough to believe that either outcome is possible? People who believe only one outcome is possible have already completed their prediction. 2 - believes either outcome is possible 0 - believes only one outcome or neither outcome is possible 9. Investment To what degree is the person making the prediction invested in the outcome? 3 - invested in outcome 1 - emotionally invested in outcome 0 - uninvested in outcome 10. Replicability Is it practical to test the exact issue being predicted by trying it first elsewhere? 5 - easily replicable 2 - replicable by sample or proxy 0 - impractical or not replicable 11. Knowledge Does the person making the prediction have accurate knowledge about the topic? 2 - relevant & accurate 0 - partial & inaccurate Scoring 22 or lower - not reliably predictable, a matter of chance 23-27 - low likelihood of success 28-33 - predictable 32 or higher - highly predictable I welcome your comments about this method as it relates to trading, or just in general.