Statistics for Traders

Statistics is one of the most misunderstood and abused subject in mathematics (and science). The reason is something we can all easily understand – statistics is something we can all sort of relating to but counter-intuitive when applied in event by event situations.

Our brains are wired that way so that our ancestors can survive in nature. Since human has not evolved into any better forms for quite some time, yet our civilization is advancing in such a pace that even our computers are outdated every year or two, our minds are not that cooperative when it comes to making decisions that are drastically different from the ones that our ancestors faced. The ability to adapt our minds in making proper trading decisions boils down to our ability in applying logical thinking and statistical analysis properly.

It all sounds so complicated but in reality all you have to do is to take time understanding some basic concepts in statistics, then utilize the distilled rules and concepts to make better trading decisions, as oppose to relying on our gut feelings.

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How to Compute the Point of No Return Boundaries  member only

I have introduced the concept of Point of No Return some time ago here. It is not a complex concept but many traders find it difficult to apply the concept in their own trading. I will try to explain how point of no return is calculated in general an ...


Emini S&P Afterhours Behaviour Part 5 - Time of Day Statistics

When we look at Emini afterhours trading activities, it is important to remember that the US stock markets is not active during that time. Hence Emini S&P500 moves mainly as a proxy with the active markets trading in the world at the time. Emini ...


Poker vs Day Trading.
5 Similarities Between Profitable Day Traders And Professional Poker Players

I was having fun talking to an old friend who has been playing poker professionally for many years. He is one of those players who consistently making money from playing in poker halls and tournaments but seldom show up in the final tables. During ou ...


Survival Guide To Trading The Stock Market Month Ends

End of month trading is different from other trading days because several classes of market participants would join the game during this time. Long side only funds often make adjustments to their portfolios during the last three to five trading days ...

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Range Based Look Back Technique

Indicator traders and trading system designers often use stock indicators from their trading platforms to construct their trading engagement methods and trading models. There are two problems when approaching the markets this way. First, you are usin ...


Minor Change In A Game

Lately, Canada's national lottery game Lotto 6/49 increased its price per entry from $2 to $3. Promotional materials suggested that to compensate for the necessary change there is now a guaranteed price draw of one million dollars every draw. Well, s ...

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Intraday Bias: Emini S&P S2 And Beyond (Signal ID - S2 Day)  member only

Statistics on RTH days where ES open below pivot, never traded at or above pivot and breakdown below S2. There is a good reason why I often tell newcomers not to pick bottom hastily . This is one of them. (Member-only content follows) [DTBMember ...


Intraday Bias: Emini S&P R2 And Beyond (Signal ID - R2 Day)  member only

Statistics on RTH days where ES open above pivot, never traded at or below pivot and breakout above R2. There is a good reason why I often tell newcomers not to fade a strong market without compelling reasons. This is one of them. (Member-only conte ...


Another Reuters Special Treat For Traders: The University of Michigan Surveys Of Consumers

Time and again I mentioned in my real-time chat that the University of Michigan Surveys of Consumers is not a public economic report. A proprietary research report is something owned by a private company. It has the rights and discretions to disclose ...


ES TRIN Driver_20130529_211324
The TRIN Bearish Bias Play  premium content

TRIN bearish bias is different from its bullish bias for the same reason that bull market behaviour is different from bear market. Short term overbought condition in TRIN has more requirements than its counterpart. First, net gain from day trading t ...

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