Standard deviations are used to measure current price action in relation to the average price of a chosen time frame. The assumption in the use of a standard deviation is that over the long term historical prices are distributed inside a bell curve. Although at times there are ‘fat tales’ or ‘black swans’ in prices […]
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Opportunity cost expresses the expense of a chosen option among other alternatives in contrast to enjoying the benefit of the other possible choices. The ‘cost’ is the difference in one reward versus another. The opportunity cost is the reward that is not received due to not choosing the other better option. If the second best
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A cost benefit analysis is a systematic process for trying to measure the pros and cons of different options to determine the best path to achieving goals with the maximum return and at the minimum cost in business, trading, investing, economic transactions, and any other activity. It is commonly used when their are multiple things
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The ROI (return on investment) is the ratio between net profit and the cost of an investment. This is measured over a specific period of time by the results of investment returns on money over a point in time. A good ROI is defined by an investment’s positive returns compared to the cost, risk, and
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Profitable trading is not about opinions, not about a prediction, or even great stock tips or picks. Profitable trading is all about math, making more money on profitable trades than you lose on unprofitable trades. How you do this is the details. Trading without understanding the math creates randomness and luck in your process. Understanding
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