Recent content by eventive

I think the interesting part of the question is that let's say we have entered a trade in which we have positive EV. How do we choose the best target to maximize this EV. Eventually a target can be selected with which our initial edge would be lost, for instance a stop of 4 ticks and a target of...

Difficult: "we are short 1 contract on 38" ;)

ordinaryguy76, the question is not the exact probability of the targets, but the relationship between them. We took the trade believing it had a positive expected value, but with what target do we maximize our potential profit? There are indeed far too many variables to calculate an exact...

Well segutor, that depends on the probability of hitting that larger target. For instance, it is better to have a 30% chance on a profit of 7 ticks, than a 10% chance on 16 ticks.

Fellow traders, I like to start a discussion about probability and maximazing your expected value in a certain situation. See attached chart, we are short 1 contract on 38 (level 1). Our stop is 4 ticks. Question is which target we are going to use, target 2 on 31 for a profit of 7 ticks or...