How do you calculate/evaluate the probability of your trade?

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luckyvictor
125
luckyvictor  

How do you calculate/evaluate the probability of your trade?

Is there any actual systematic or defined structural method to do it?

luckyvictor
125
luckyvictor  
anyone can give some thoughts?
Marco vd Heijden
Moderator
8167
Marco vd Heijden  
Which probability are you referring to ?
Carl Schreiber
Moderator
7083
Carl Schreiber  

You can print the trade history into csv-files for an analysis by EXCEL:

https://www.mql5.com/en/articles/651
https://www.mql5.com/en/code/13885

I found it by using the lens top right - there is more sto find for you!!

MQL5 Cookbook: Writing the History of Deals to a File and Creating Balance Charts for Each Symbol in Excel
MQL5 Cookbook: Writing the History of Deals to a File and Creating Balance Charts for Each Symbol in Excel
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When communicating in various forums, I often used examples of my test results displayed as screenshots of Microsoft Excel charts. I have many times been asked to explain how such charts can be created. Excel offers ample features for creating charts and there are lots of books on that subject. To find the required information in a book, one...
luckyvictor
125
luckyvictor  
Marco vd Heijden:
Which probability are you referring to ?

When you put on a trade, how do you systematically calculate the probability of this trade winning?  

luckyvictor
125
luckyvictor  
Carl Schreiber:

You can print the trade history into csv-files for an analysis by EXCEL:

https://www.mql5.com/en/articles/651
https://www.mql5.com/en/code/13885

I found it by using the lens top right - there is more sto find for you!!

It is good for reviewing performance, but when you put on a trade, at that moment, usually you mentally would know that the probability of winning is greater than losing, this is why you would put on such trade. So how do you actually qualify this probability?

Marco vd Heijden
Moderator
8167
Marco vd Heijden  
luckyvictor:

When you put on a trade, how do you systematically calculate the probability of this trade winning?  

Is that even possible ?

Or necessary ?

Can you please explain why you would want to do that ?

I like to know how much i can lose and that's quite easy to decide upon.
Anthony Garot
1845
Anthony Garot  
luckyvictor:

It is good for reviewing performance, but when you put on a trade, at that moment, usually you mentally would know that the probability of winning is greater than losing, this is why you would put on such trade. So how do you actually qualify this probability?

I don't know of any way to ascertain the probability of a specific trade "at the moment."

What you do is determine the probability of any trade within a system using statistics.

Start with a largish sample size. For example, I have tell-tales that warn me if I am not analyzing enough trades:

        msg = ( m_totalTrades > 500 )?"Hey: A good number of trades!":"";
        msg = ( m_totalTrades < 110 )?"Warning! Not enough trades":msg;
        msg = ( m_totalTrades < 37 )?"Alert! Not even statistically significant!":msg;

If your strategy has a trading edge, you will know from various metrics calculated in the optimizer. That's the probability you want to know.

But probability of winning is only one metric. We're not flipping coins here. You need to know about drawdown, shape of the equity curve, expectancy, and a host of other metrics that let you know if the trading strategy is worth a damn.

luckyvictor
125
luckyvictor  
Marco vd Heijden:

Is that even possible ?

Or necessary ?

Can you please explain why you would want to do that ?

I like to know how much i can lose and that's quite easy to decide upon.

I am trying to quantify a trade, because for sure when we enter a trade, we have done the maths in our head and the result must be "Probability of winning is greater than losing", so I want to know people in here whether they may have quantify this thought.

So how do you calculate how much you can lose? if I enter and exit based on technical indicator, then i can not really know the distance of my exit as it is calculated in the future by the technical indicator.

luckyvictor
125
luckyvictor  
Anthony Garot:

I don't know of any way to ascertain the probability of a specific trade "at the moment."

What you do is determine the probability of any trade within a system using statistics.

Start with a largish sample size. For example, I have tell-tales that warn me if I am not analyzing enough trades:

If your strategy has a trading edge, you will know from various metrics calculated in the optimizer. That's the probability you want to know.

But probability of winning is only one metric. We're not flipping coins here. You need to know about drawdown, shape of the equity curve, expectancy, and a host of other metrics that let you know if the trading strategy is worth a damn.

Thanks for your reply.

you are quite right, probability of winning is not the only metric to look at. 

I actually started trading manually for a while, had a good time and a lot really bad time, so now I want to sit down and actually do it in a very systematic way, I feel like I lack of some proper process.

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