Why the theory of probability does not work in the market

Many novice traders want to compare price direction prediction with roulette. The dominant factor is the direction indicator and the number of such directions. The analog of roulette is a coin with heads and tails. But both of them don't work for market .

probability theory

If roulette is a bet on color (red/black), then if bet on the same color and at the same time doubling the bet, you can be guaranteed to win. But the casinos calculated this loophole and violated the probability by introducing zero and double zero. Also changed the par value of bets. Removing the minimum, for not being able to play with large sums due to the fact that the initial rate is overvalued.

If we consider heads or tails, in the case of a coin flip, then it works big number theory. But as soon as the center of gravity is shifted, the theory of large numbers will be violated, and heads and eagles will not fall out equal numbers of times. The market is also no exception, it has also changed, warped, this very probability by introducing into the trading conditions spreadas well as unequal swap. How does the spread affect the outcome of a trade position? Spread - is a tool which shifts the probability in the direction of the negative event. As it happens, when we open a position, we do not start from a point zero, but immediately with a negative result. I.e. we get imbalance, as with a coin, when the center of gravity is displaced.

No matter how hard you try, you can't get more than 50% in your direction with stop-losses and take-profits. There are so many EAs already made, and all of them do not work, except for martingale ones, because their main emphasis is on increasing the probability. Many traders and programmers, tried to increase profit of such trading advisors, but the result was always the same - complete loss of money on the deposit.

One hundred percent per annum

It seems that there is only one formula for stable earnings - one hundred percent per annum. All who tried to beat this figure, all turned out to be at the bottom of the barrel. All in fact, everything is simple, for some reason traders do not think that the Forex market can also be calculated and all the loopholes in it have long been calculated, and protection from different combinations, as violation of the order of triggering bets in the casino by falling out of zero and double zero, are put. So, it is not for nothing that indicators at Forex market sometimes stop working, and it is not for nothing that we see no-failure movements or prolonged flatulas, as well as sharp falls, referring to a random mistake made by a trader at the stock market, as it was on May 6.

These are all calculated combinations that do not allow for super profitable trading systems. If there were any, it would threaten the very existence of the financial system and the world economy as a whole, and no one would allow that, so doubling in a year is a decent income, I don't even see the point in trying to squeeze out more, wasting years of my time.

Many of you think that it is impossible to achieve 100% probability in getting a positive result. But for this I want to give such a simple example, if you bought in an exchange office a dollar for rublesIf you are a trader, you can keep it under your pillow at home indefinitely and wait until the rate goes up, the only risk for you is a depreciation of the currency. The moral of this fable is that as long as you are working without leverage, no margin call is a problem, but as soon as you break this rule, you are immediately playing out of your territory.

To increase the probability it is worth working only with a margin of at least 2,500 pointsAs the maximum volume of positions. In turn, this maximum volume of positions is divided into parts, so that you could fractionate, averaging and use a higher volume in refills, apply martingale and other methods, because that unused trading volume allows you to maneuver and use different combinations, without increasing the risks of trade. In turn, the combinations can be both averaging the opening price of the position, and increasing the volume of trading positions in the direction of the movement, which increases profits, but do not forget the rule: the doubling for the year, otherwise in pursuit of profit you will lead your trade to the predominance of the minus over the plus.

In the case of using averaging, you increase the probability of all positions coming out in the plus, in the case of additions in the direction of the movement, your each position is more risky because the probability of market reversal increases. In the case of adds, I see a steady decrease in trading volumes with each successive position. These two steps will lead to the most competent probability work in the Forex market. Again, The main thing is not to break the margin of safety of the trading account And then nothing will threaten your account. And in our business, the main thing is less risk, and then the profit, because whatever we earn is ours, but if we lose, then there is another sign.

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Комментарии ( 2 )

  1. The article is about nothing, some kind of a hell of a set of IMHs and "The impression is formed".
    There is no such thing as "average probability of all systems" or "probability ceiling" There is a system, there is a specific sample of quotes and there is a probability of winning on that sample and system.

  2. Bullshit, 100% it depends on what kind of deposit, if you say 30-50K$ then yes doubling over a year is normal, and if the deposit of 1000-2000, then 100% is REALLY do in 1-2 months, the article itself is nothing

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