Probability calculator
Hi guys:
I just made this calculator. But there is an assumption base on Normal Distribution of price movement. I just want to hear comments about this idea, please don't really use it for your trading. All comments are welcome.
I like the approach, an online application based on Flash. Good job.
Hi ,
Thanks for sharing your Calc .
Can you explain what is it's logic?
Hi ,
Thanks for sharing your Calc .
Can you explain what is it's logic?Assume the prices appeared in a time period are normally distributed. Then we can model the probability that a price goes over the take profit line. On the other side of the distribution is the probability a price goes below the stop lose line. The offset is to specify skewness of the distribution lean toward the take profit side. If the offset is 0, this means probability of movements to either directions are distributed equally, and we really just have 50/50 chance on either side.
The swf file is still on my site working fine. And another illustration. Assume the prices appeared in the next 4 hours based on historical data are normally distributed. And the next 4 hours bar tall on average is 30 pips, the the movement range is 30pips. To calculate the offset, we can sum up, in a long period time of historical data, the ups and downs in that time frame, movement toward to the side we going to buy is positive, and movements toward to the losing side is negative. Then if the summation is positive we know there is a tendency the market move to the winning side, vice versa. And divide the summation with number ups and downs or bars we used for summation. Then we have an average tendency, that is the offset.
hi
thanks a lot , it's useful for risk ratio calculation 
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This is quite interesting. At first I couldnt understand why the probabilities didnt sum to a value of one, but I assume its due to the setting of the movement range, so at an extreme, if you set a target and stop of 100 pips, but only specified a 20 pip movement range, you'd end up with zero probability of either being hit. That's pretty neat
I also like the mean offset bias feature
Now I'm going to have to spend the rest of the day brushing up on stats and reverse engineering this thing 
This is quite interesting. At first I couldnt understand why the probabilities didnt sum to a value of one, but I assume its due to the setting of the movement range, so at an extreme, if you set a target and stop of 100 pips, but only specified a 20 pip movement range, you'd end up with zero probability of either being hit. That's pretty neat
I also like the mean offset bias feature
Now I'm going to have to spend the rest of the day brushing up on stats and reverse engineering this thing Sum of the two horizontal bars in the chart do not up 1, because they are not covering all the possibilities. There are three possibilities in trading, first price goes over tp; second price goes below sl; and the third possibility is price stays in between the movement range doesn't reach either side. I decided not to show the third possibility on the horizontal bar chart.
Where is your site
where is your site
The swf file is still on my site working fine. And another illustration. Assume the prices appeared in the next 4 hours based on historical data are normally distributed. And the next 4 hours bar tall on average is 30 pips, the the movement range is 30pips. To calculate the offset, we can sum up, in a long period time of historical data, the ups and downs in that time frame, movement toward to the side we going to buy is positive, and movements toward to the losing side is negative. Then if the summation is positive we know there is a tendency the market move to the winning side, vice versa. And divide the summation with number ups and downs or bars we used for summation. Then we have an average tendency, that is the offset.
where is your site
Just click on the picture of the first post of this thread. There is a hyperlink linking to the calculator.
Cheers
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Hi guys:
I just made this calculator. But there is an assumption base on Normal Distribution of price movement. I just want to hear comments about this idea, please don't really use it for your trading. All comments are welcome.