"One such statistic shows that a negative break thru a 5% stop...

  1. 652 Posts.
    "One such statistic shows that a negative break thru a 5% stop will continue downwards 84% of the time so gambling on the 1:5 is a sure bet to the poor house."
    Assume this is correct. It still is insufficient information to base a strategy on.
    For that We need the expectation. Probability without expectation is only half the story.

    Let say for an example that 84% continue downwards but that the 16% that do not Produce a gain that is 6 times higher on average than what is lost on the 84% .
    Negative probability , but a positive expectation.
    Probabilities alone mean nothing. You can not assume the payoffs are symmetrical they rarely are.
 
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