Yup, pool too. I see trading as a game of skill. "... how do you define and measure PROBABILITY for short term trading..." You know, I don't think it is necessary or even relevant. The skill in trading is to know what conditions favor what outcome. Then, make a limited risk bet with [relatively] unlimited potential for profit. Those are the things a good trader does. He also recognizes there are certain conditons where he does NOT do certain things... for example, "load shorts because stochastic is overbought" as soon as the Fed announces a surprise rate cut. I once designed a trading method which had ZERO losers over 12 years. No kidding. Problem was that it was so restrictive it was out of the market so much it underperformed by a mile. Conclusion: "Zero losses is not a viable objective". When I was trying to talk up my work to get business, I used to keep records of wins/losses, etc. I ran 71% winners for 5 years in mutual fund trading. One September, a client called me up and said, "do you realize we haven't had a loser all year?". I said, "DAMN... kiss of death... and that has been highly unusual... don't expect to see that again". Next trade was a loser. Many say "Don't trade too much [overtrading, they call it]". I say, BALONEY. If you trade well, you profit. Trade poorly, you lose. How often you trade is irrelevant. Trading is a skill.
I am offended by the trading/gambling analogy at least give me credit for being a speculator at worst. lol
The thread seems to be a little off of the title topic, but for anyone truly interested: http://www.houseofodds.com/houseadv.html http://www.houseofodds.com/probabilities.html
As I said it before aside of poker, horse-racing and sports betting i.e. playing any casino table or machine games YOU HAVE NEGATIVE EXPECTATION MATHEMATICALLY How much that percent ? This is a trading forum so I won't do research here and post it. It is out there in books, internet etc. I would like to add this bit however... Interestingly in positive expectation games, however slim the chance may be the 'vig' will kill the game. See: sports betting and horse and dog racing, the house, government etc takes so much out of the 'pot' the only very very few people can beat the game. p.s. it helps to be psychic.... In BJ you can't count anymore, or if they let you - I assure you they cheat!!!!
YOU wish to win USD500 if at the close of the market on 7-Oct-02 Nasdaq Index is worth less than 1200. The cost of this bet is USD376 The odds on this bet are EU:1.33 UK:6/19 US:32 (-303) Your net profit is USD500-USD376 = USD124 which represents a +32% return on your USD376 investment. - - - - Interesting....
This thing blows away all the dinky US brokers with their analist (or is it analyst Are they financially stable ?