Thread: Baisc probability/odds

Hi there I am new to this forum and I am working on a study that involves working with stocks/shares/commodities and currency markets.

We want to calculate the probability of entering a succesfull trade and how the odds will work in spreading the risk to create the best system for trading at peak performance.

I am developing a system that works on the theory of chaos meaning that markets can go any direction at any time without any notice . So if you were to enter a trade there would be a 50/50 % chance of that trade being succesfull.

I am hoping to get together a nice team of mathematicians to try and crack the puzzle and create the ultimate trading system as all of you might know traders is by far the highest paying profession in the world so there is somthing in it for everyone.

So what I need to figure out is how to spread risk properly and enter in the right amount of trades to manage the risk properly.

I am currently working on a system that trades as many markets as possible but keeps the risk the same by keeping the total position size the same for example:

1 trade @ $1000
2 trades @ $500
4 trades @ $250

and so forth...


I would also like to find out the probability if I were to enter 10 trades, what would be the probability that all 10 will be bad trades...

All this we can piece together bit by bit a good system and see how it does in the markets.

Thanks a lot
Armand Strauss
Xlr8ed Trading

If the trades were independent and the probability of failure in each single one is .5 you would mulitply these probabilities together which gives 0.0009765625. Still i'm not convinced this is going to be a money printing machine.

Im not here to convince you its a money making machine im here to solve a mathimatical problem thank you