Tag Archives: trading basics

To trade well, we can’t get bogged down in things that don’t matter. Instead, we must focus on the relevant factors. Some statistical quizzes can help clarify this for us. Then, an understanding of how markets move can provide us with the relevant factors to focus on. In Probabilities in Trading – How Your Mind Is Tricking You, I introduced some errors people make in regards to probabilities–namely, availability bias and assuming increased probabilities if…

Probabilities explain the chance of something happening. Probabilities in trading are often discussed, but humans have an abysmal capacity to understand and calculate probabilities. Our minds are just not hard-wired for it. We love to assign probabilities though, but the probability assigned to an event is often grossly inaccurate, or based on inaccurate/wrong presumptions.  Are there more six-letter words in the English language where the 5th letter is an n, or more six-letter words in…