Trading & Risk · Risk
Probability & expected value for traders
Trading is decision-making under uncertainty. Expected value, variance, base rates and Bayes' rule, and why a positive-EV edge still needs position sizing to survive.
Step 1 of 7 · Overview30 min read ·
Key idea
Prereqs: basic arithmetic and percentages. Next: Position sizing (Kelly). MIT 18.05 / 18.S096 basics; Annie Duke *Thinking in Bets*; Thorp.Next: 1. Expected value