Tuesday, 13 November 2012

Trading is all about Probabilities

Trading is all about probabilities.

We have pictures that have a high probability of disclosing momentum and order flow in certain directions. But these are only probabilities because it only needs a very strong hand to do the opposite of what the then order flow is showing.

But this is the best we can do. If our pictures are correctly described and we have backtested them up the wahzoo then we will have the statistics of the probabilities.

Calculation of probabilities is done in many endeavours including weather forecasting and electioneering. This is a link to a very intereesting article from the Sydney morning Herald on probabilities being used to forecast the recent U.S. presidential elections.


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