240: Thinking In Probabilities & Risk

About this episode

This episode explains the importance of understanding probabilities and risk in trading for long-term success.

Markets rarely behave as predicted by mathematical models, and extreme events occur far more frequently than traditional models anticipate. This episode explains why understanding probabilities, fat tails, and risk is essential for long-term success. We also explore how traders can build more resilient systems by focusing on recovery time, appropriate position sizing, and avoiding strategies vulnerable to black swan events. Discover why win rate alone can be misleading, and how expected value...

People in this episode

Host: Kirk Du Plessis

Topics covered

• probabilities
• risk management
• trading strategies
• black swan events
• long-term success

Keywords

• probabilities
• risk
• trading
• fat tails
• position sizing
• black swan
• win rate
• expected value

Mentioned in this episode

Organizations: Option Alpha

Places: Markets

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