Convergence of Probability and Optimal Expected Value

• Posted by Robert Sinn
• on June 26th, 2012

During the last week I have noticed a lot of new bloggers have popped onto the scene in addition to many of the people whom I follow on Twitter suddenly deciding to blog more actively. I love reading other bloggers (I read about 20 blogs each day and try to read more if I have time), particularly those who are thoughtful and hungry with new thoughtful insights to share.

Patrick Ambrus has been one of the most thoughtful traders on my Twitter stream for well over a year now – his tweets are always well conceived and sharp edged. I had the pleasure of meeting Patrick a few months ago in West Palm Beach along with another well known Twitterati @NoDoji. Patrick impressed me with wisdom beyond his years and his desire and willingness to listen and share market related ideas. Without further ado let me introduce Patrick: “Elimination of the Aesthetic and Pragmatic Concepts of Trading”

“Only through Falsification can we know which method of interpretation is correct.  Thus, my analysis now utilizes multiple scenarios.  Typically, I map out 2-3 of the most probable scenarios using EW, Fibonacci, harmonics, fractals, and analogies.  After obtaining the ‘road maps’ I then look for the convergence of most the probable scenario with the best risk/reward.  This approach allows me to trade aggressively in one direction or another while adhering to strict risk management principles and always preserving my capital.  Through this approach, even if I am wrong, my loss is small and I am rewarded the opportunity to await further confirmation and re-enter the market using a better road map after eliminating the weak prospects. To date, this system has proven to be Robust and profitable.”

 

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