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Showing results for tags 'probability'.
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Was it the right conclusion? Is any losing trade necessarily a bad trade? The answer is no. No matter how well he executed his trade, there will be losing trades because we are playing a probability game. Trading is a business based on probability. And probability means that sometimes we...
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These conclusions reveal how maximum profit and loss are calculated and aid in deciding which strategies are good fits for your risk tolerance. Does risk level justify the trade? That is where most options traders begin to address probability. But most often overlooked in selection of an underlying...
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The author explains, “I analyzed five major CME option markets – the S&P 500, eurodollars, Japanese yen, live cattle and Nasdaq 100 – and discovered that three out of every four options expired worthless.” The inaccuracy of this statement is explained easily. The actual statistic is that 75% of...
