The Snow Fight Metaphor by Van Tharp
Stock Market Options Trading
The Average Impact of Snowballs on Your Wall
The impact of each snowball is our snowball equivalent of what I call expectancy in the trading world. In the real world of investing or trading, expectancy tells you the net profit or loss that you can expect per dollar risk over a large number of single unit trades. Let's say that the average impact per snowball is to add 1.1 cubic inches of snow to the wall. If two snowballs were thrown each hour, then your wall will only grow by 2.2 cubic inches per hour. The first scenario has 30 times the impact of the second one.
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