Basic Probability

So, based on what you think it currently is trendie, if you were offered the opportunity to take part in a high-stakes wager where you win on the first occurrence of two consecutive Heads in a maximum 4 coin tosses game, what would your Aw:Al ratio have to be for it to become marginally positive enough for you to consider participation?

Guys, probabilities make sense in your examples only as relative frequencies. There is a lot of debate about the relevance of of limiting probabilities to single or few step decision making processes.

I do understand what you're saying IDB, but where we don't get the luxury of deciding or debating or limiting probabilities to a single or few steps decision making process, we do need something to work with.

The entire purpose of this thread is to investigate what many have always (I'm guessing) used for their probabilistic decision making processes and compare that with what is currently believed to be more useful and which more closely mirrors the reality we encounter – especially when we trade.

Next you're going to start spouting on about "probability pressure"

It's 19.

2^N + N+1 (Havil, J. Gamma: Exploring Euler's Constant. Princeton, NJ: Princeton University Press, 2003. )

But who gives a toss. LOL












note to brain: don't bother with anyhting like this again. let's find the equivalent of page 3 for traders - they'll all like that....

I don't think you have specified the question too well. That list of 16 isn't a sensible list of outcomes with regard to the experiment you're interested in. But before I get into this more
What exactly are you saying here? Your formula above has an 'n'. If you take the 'n' to be the coin tosses (you didn't define 'n') then you would not have the answer you gave, right?

Got distracted on the FTSE closing the gap from the 1st April , so only just finished editing above

Yes, N is the number of coin tosses (4).

What did you get for 1-(F(n+2)/(2^n))
where F(n+2) is the (n+2)th Fibonacci number
and where N=4?