Probability assessment is purely mathematical

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Let's assume I have one point left before the stop profit is triggered.

And 49 pips before the stop loss is triggered.

How do I estimate the probability that the stop loss will trigger? It's something very complicated...

 
TVA_11:

Let's assume I have one point left before the stop profit is triggered.

And 49 pips before the stop loss is triggered.

How do I estimate the probability that the stop loss will trigger? It's something very complicated...

50/50.
 

98-profit

2-loss

 
Tantrik:
50/50.

Supported by
 
If nothing is known about the process, it is impossible to determine the probability. Even if SL=2 and TP=100, even if SL=100 and TP=2. In other words, you have to have knowledge about the regularities of the process under investigation.
 
TVA_11:

Let's assume I have one point left before the stop profit is triggered.

And 49 pips before the stop loss is triggered.

How do I estimate the probability that the stop loss will trigger? It's something very complicated.

You can't estimate it, it's not well defined: there are no statistics;

But in terms of fuzzy logic you can, quite well

 
abolk:

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Then just open 100 times, randomly, with a constant lot. Take a 49 pips TP and 1 pips SL. After you close the 100th, you will get 100 orders closed.

At your 50/50, you will have 50 losses of 1 pip and 50 profits of 49 pips, good luck and no thanks

 
Mischek:

98-profit

2-loss


And if you add the 2p spread, the stats after 100 trades are quite depressing:)

 
joo:
If nothing is known about the process, it is impossible to determine the probability. Even if SL=2 and TP=100, even if SL=100 and TP=2. In other words, you have to have knowledge about the regularities of the process under investigation.

Why, we solve "as it is" and if we add "knowledge about regularities of the investigated process", it will become unsolvable at all.
 

Let's take a simplifying approach.

Let's admit that we have no statistics.

There is a 50% chance that the price will move up or down by a point.

 
Tantrik:
50/50.

The probability in this case is close to 0%. But there is a chance.

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