VictoriaAlgo
Junior member
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Hi Fellas,
Trading can be the same as gambling, but it is not necessarily the case.
The key differentiator is the expected value. The expected value (EV) is an anticipated value of risk adjusted total returns of a trading system at some point in the future. In statistics and probability analysis, the expected value is calculated by multiplying each of the possible outcomes by the likelihood each outcome will occur and then summing all of those values.
The expected value of gambling is always negative/minus/losing. The expected value of trading need not be a minus. The expected value is determined by the trading strategy and other intangibles. The point being: it is possible to calculate a probability distribution of returns when assessing a trading strategy, the distribution allows us to calculate risk. The probability distribution of a gambling scheme always looks the same and the risk always out weights the return.
💖
Vicky
Trading can be the same as gambling, but it is not necessarily the case.
The key differentiator is the expected value. The expected value (EV) is an anticipated value of risk adjusted total returns of a trading system at some point in the future. In statistics and probability analysis, the expected value is calculated by multiplying each of the possible outcomes by the likelihood each outcome will occur and then summing all of those values.
The expected value of gambling is always negative/minus/losing. The expected value of trading need not be a minus. The expected value is determined by the trading strategy and other intangibles. The point being: it is possible to calculate a probability distribution of returns when assessing a trading strategy, the distribution allows us to calculate risk. The probability distribution of a gambling scheme always looks the same and the risk always out weights the return.
💖
Vicky