Probability / maximazing EV

Discussion in 'Trading' started by eventive, Feb 25, 2013.

Which target do you choose

  1. line 2 at 31 for a potential profit of 7 ticks

    1 vote(s)
    100.0%
  2. line 3 at 22 for a potential profit of 16 ticks

    0 vote(s)
    0.0%
  1. eventive

    eventive

    Fellow traders,

    Please take a look at the enclosed chart.

    Lets say we are short 1 contract on 38 (line 1), stop is 4 ticks

    What is the target going to be and why:

    Target line 2 at 31 for a potential profit of 7 ticks
    Target line 3 at 22 for a potential profit of 16 ticks

    What factors would you weigh in the selection of the target, any ideas about the relationship between the probability of hitting target line 2 or 3.

    The goal is to maximize EV / profit, not hitratio.

    I look forward to reading your opinions.....
     
  2. eventive

    eventive

    here is the chart
     
  3. eventive

    eventive

    chart
     
  4. eventive

    eventive

    I can't seem to post the chart, will try again later