You're not predicting the future!
If you were to go to a properietary trading firm for an interview they would be looking for some kind of trading record in order to assess how good you are as a trader. How could they do this?? You wouldn't just hand over a print record of all your trades. Instead they would want to look at your trading statistics and one of the figures prospective employers would look at amongst other things is expectancy. Obviously you would need to have a good trading history to calculate this. If they are going to give you money to trade they need to do this!
Expectancy isn't a figure that accurately tells you how you're going to perform in the future but it will tell you well roughly how you will do as a trader.
Its like working out the probability of a head manually by tossing a coin. You just need lots of events or tosses to calculate it. The more you have the more accurate the probability will be to 0.5.
In the same way as long as the trader is using pretty much the same methodology the expectancy will be quite accurate in predicting how well the trader will do.
Quantt
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This is not the same as knowing how much you are going to loose with proper risk management, so I don't find the "guess work" worth debating anymore...
Lee Shepherd
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Hi Quantt,
Hope you're well. I won't get into a debate with you here but for spectators: would you agree that the weather forecasters aka predictors of weather, get it right more than they do wrong. If people answer yes then they are on the same page as traders.
Lee
Quantt
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OK, last comment, my point was that you can predict very well how much money you can lose, but not even close how much you can make... for longer time frames, no one can predict with any certainty if you can make or lose money in 2018 for example, it is all one big guess...
! Give up mate!
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