"probability" Posts
Should You Stop Trading When Your Weekly or Daily Profit Goal Is Reached?
Michael Mauboussin: The Success Equation – Untangling Skill and Luck
Ionica Smeets: The Danger of Mixing Up Causality and Correlation
Veritasium: Would You Take This Bet?

Real life experiment with people on rational decision making. Our human nature plays a big part in our lives on the decisions we make. Traders are especially haunted by our bias towards risk aversion as losses of any kind is almost automatically translated into a form of pain or threat. Being able to overcome that […]
Gerd Gigerenzer: Risk Literacy
What a Simple Bingo Game Can Teach Us?
Clarifications to Some Basic Concepts in Probability

I wrote many articles on statistics over the years (Teaching a Grade 4 on Probability, Understanding the Market in a Statistical Way, etc.) and advocate traders to pay more attention to proper application of statistics in trading and model development. I came across this educational video by Peter Donnelly from TED that explains several basic […]
Market Internals Update 2011-05-03
After I posted the breadth bias warning last week. Someone asked for some samples of the potential outcomes from history. Here they are. First one, the one that simply go sideway for a month. Second one, if there is a turn, it should happen quickly in first 2 weeks of May.