What is the probability of profit of your next trade? (Introducing PredictNow.Ai)
Ernie Chan (noreply@blogger.com)
What is the probability of profit
of your next trade? You would think every trader can answer this simple
question. Say you look at your historical trades (live or backtest) and count
the winners and losers, and come up with a percentage of winning trades, say 60%. Is the probability of profit of your next trade 0.6? This might be a good
initial estimate, but it is also a completely useless number. Let me explain. This 0.6 is what may be called an unconditional
probability of profit. It is the s