Mathematics of Betting: Odds vs Probability vs RRR

Discussion in 'Risk Management' started by OddTrader, Dec 25, 2014.

  1. Sergio77

    Sergio77

    What happens if p =0?
     
    #11     Jun 8, 2015
  2. My guess: A non-existing event! lol

    " http://visual.ly/what-are-odds

    What are the odds that you exist, as you, today? Author Ali Binazir attempts to quantify the probability that you came about and exist as you today and reveals that the odds of you existing are almost zero.
    "
    " http://www.robsworld.org/notime.html

    Probability paths: (See illustration at left)
    What is this probability tree that I mentioned? 'For every action there is an equal and opposite reaction' The reaction to any action is not the only possible reaction. There are many possible reactions to any action. A probability tree is a map of all possibilities for any given event. A probability path is the path followed down a probability tree in order to reach your current multidimensional position (the 'Now').

    Try to envision the probabilities inherent when a coin is flipped. The first node of this probability tree is the point where the coin is flipped. After the coin is flipped three new probabilities (at least three) branch out from the initial node. There are three possibilities with regard to the outcome of the coin flipping (in a simplistic/illustrative sense). Each of these probabilities necessitates the existence/creation of another node. One for 'Heads', one for 'Tails', and one for the less likely result of 'Edge'. "
     
    #12     Jun 8, 2015
  3. heypa

    heypa

    As the little German soldier used to say on "Laugh In " Very interesting ,but confusing.
     
    #13     Jun 8, 2015
  4. LOL

    1. The main theme so far has been about Predictive analytics.

    2. Perhaps further insight could be found on the page 108 of Douglas book.
     
    #14     Jun 8, 2015
  5. Yes, he was lucky. But he also wasn't. Depending on which trade you're referring to. And when he was unlucky, he characteristically exited earlier than when he was lucky. His premise was that moves often continue well beyond the point of reason essentially due to a feedback loop. And if you happen to latch on to the right side of such a move, it behooves you to play it for what it's worth while keeping you eyes wide open.

    There is always an element of luck, good or bad, in an environment of uncertainty. It's how you deal with it that counts. And I think Mr. Soros has dealt with it quite well.
     
    Last edited: Jun 11, 2015
    #15     Jun 11, 2015
    piezoe likes this.
  6. loyek590

    loyek590

    I don't need to read any book or use a computer. Anybody with a 7th grade education in math (before the Department of Education started creating gamblers and traders) can look at a roulette table and realize very quickly there are no bets which make sense for anybody but the casino. That's why they don't have a World Series for roulette players. Same goes for any bracket trader.
     
    #16     Jun 11, 2015
  7. piezoe

    piezoe

    When one considers the Soros record, one is struck by the very low probability that he achieved what he did by luck alone.
     
    #17     Jul 3, 2015
  8. i960

    i960

    I don't think Soros achieved everything by luck at all. He took bets others weren't willing to bet on - that's not luck. It's not like he rolled a set of dice on if he'd short the pound or not.
     
    #18     Jul 3, 2015
  9. loyek590

    loyek590

    what exactly is the "Soros record" and how does it compare to my mother who has held the S&P 500 since 1987?
     
    #19     Jul 3, 2015
  10. zdreg

    zdreg

    your mother and soros are in the same category. neither pays taxes.
     
    #20     Jul 3, 2015