045: Jack Litle – Global Macro Trading, the Nature of Probability, and When to Place ‘Big Bets’
Chat With Traders
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The Importance of Understanding Probability and Expectancy
understanding probability and expectation is more about understanding how markets work. When you understand the nature of probability it actually changes the way you trade and the way you think about trades so for example one thing that a lot of traders don't realize is the incredible prevalence of the 90 10 ratio in terms of profit distribution. So when you understand something like that a light bulb goes on and you say hmm there's something probability driven here about how the market distributes profits, then that influences your expectation and your psychology and a whole bunch of other things.
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