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 target 3 on 22 for a possible profit of 16 ticks.

What is the relationship of probabilities of the two targets and how do we determine them?

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 target 3 on 22 for a possible profit of 16 ticks.

What is the relationship of probabilities of the two targets and how do we determine them?

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