"probability" Posts

Essence of Trading: Only Man-made Roads are Straight and Smooth

By Lawrence

Ever observe a tree in detail? From afar, a tree may look tall and sturdy. That is just our impression of the tree. By looking at a tree carefully, you would notice that it is not quite accurate. Its branches are never grown in straight lines. The tree trunk is not a one piece metal […]

SPY Range Expansion Behaviour

By Lawrence
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This is a study on the probability of SPY expanding its range as a multiple of the average range over 10 days period. The study was originally done by our member smilingsynic. I am just reproducing the results here using data from 1993 up to last Friday Feb 25, 2011. First, a comparison based on […]

What to Expect After 2 Down Days?

By Lawrence

One of my favorite daily level Time Map patterns is that Emini S&P dropped for 2 days significantly. It provides something so consistent to work with over the years you have to wonder why no one talks about it at all.

Teaching a Grade 4 on Probability

By Lawrence

Before summer started, my son was learning probability at school and his teacher gave his class some interesting questions to solve. The background is that they’ve just learned fraction, decimal numbers, etc.

Market Bias Detective: S&P 500 Daytrading Time Map Vol. 1

A collection of the time based statistical biases often mentioned in the daily commentary section on trading S&P 500 related instruments (e.g. e-mini S&P, SPY, etc.). A useful reference if you are not already familiar with the time based trading techniques.
by Lawrence Chan Price: $35 Member: $30

Studying Your Data Across All Bar Sizes

By Lawrence
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Have you ever wonder why you like to use 5-minute bars to trade something, and then, all of a sudden, switch into another time frame like 15-minute bar to monitor another instrument. Why we somehow have different level of comfortability with different time frames? Here is an interesting way to study an instrument to find […]

Understanding the Market in a Statistical Way

By Lawrence
SP 45MinRun

Have you ever spent time studying how the market you trade behave statistically? Here is an example showing some interesting behaviour that is ignored by many traders.

Detecting Moving Average Crossover Before It Happens

By Lawrence
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Have you ever wish for the moving averages to crossover earlier? I am going to show you a way to detect moving average crossovers before they actually happen.

An Introduction to Time Distribution Analysis

By Lawrence
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Knowing just your odds with a particular trading setup may not be enough. You need to know the various possible scenarios that may unfold so that you are ready to handle them. Here is a tool that helps you study your trading setups using time distribution analysis.

In Early Stage Of System Development, Avoid Position Sizing

By Lawrence

Many beginners in trading system development like to play with position sizing scheme. It feels great when you get a great equity curve with spectacular performance by simply twisting what position sizing rules to use and experiment with various sizing parameter settings. I have some bad news for you – such system will not likely […]