Laser Vision in Trading: Projecting the Value of Your Account
It's quite common to see profile pictures of traders using visual metaphors like "laser vision" to convey the idea of focus, precision, and determination in their operations. These representations often symbolize the trader's ability to identify opportunities and make decisions quickly and accurately in the financial market.
However, beyond intuition and instinct, which reduce laser vision to a graphic metaphor, nonexistent in the real conditions of trading, there's a fundamental tool that acts as the true "laser vision" of the trader: the expected value of returns.
The expected value of returns is a measure representing the average return expected from a series of operations based on a trading system. It's like projecting the future value of our own trading account, allowing us to focus on a fundamental aspect of trading: growing our accounts.
Let me ask you a question: what's more important to you, being able to project the price of an asset in the future or being able to project the value of your own account in the future?
A novice trader may think that knowing the price of bitcoin in a month is more important, but this approach quickly runs into the reality of trading. No one has the ability to predict the future and completely eliminate uncertainty, making this option impractical in practical terms.
In contrast, the second answer, anticipating the future value of our account, is possible thanks to statistical inference, being the only correct answer to the question posed. Not only is it the most viable answer, but it's also the most important one, as all traders are in the market with the goal of growing their accounts, not of predicting the value of an asset in the future.
The true laser vision that a trader yearns for is not a metaphor but a real ability to anticipate the behavior of their trading system and project the value of their own account into the future.
This is the key to making informed decisions and achieving success in the world of trading.
And let's remember, to accurately calculate the expected value of returns, it's necessary to have, as a foundation, a repetitive trading system—a set of rules that are always applied strictly and disciplined. These rules form the basis for correctly conducting statistical inference, as explained in previous posts. It's the aggregation of many individual events over time that ultimately allows for probabilistically inferring the mean value in the future.
However, beyond intuition and instinct, which reduce laser vision to a graphic metaphor, nonexistent in the real conditions of trading, there's a fundamental tool that acts as the true "laser vision" of the trader: the expected value of returns.
The expected value of returns is a measure representing the average return expected from a series of operations based on a trading system. It's like projecting the future value of our own trading account, allowing us to focus on a fundamental aspect of trading: growing our accounts.
Let me ask you a question: what's more important to you, being able to project the price of an asset in the future or being able to project the value of your own account in the future?
A novice trader may think that knowing the price of bitcoin in a month is more important, but this approach quickly runs into the reality of trading. No one has the ability to predict the future and completely eliminate uncertainty, making this option impractical in practical terms.
In contrast, the second answer, anticipating the future value of our account, is possible thanks to statistical inference, being the only correct answer to the question posed. Not only is it the most viable answer, but it's also the most important one, as all traders are in the market with the goal of growing their accounts, not of predicting the value of an asset in the future.
The true laser vision that a trader yearns for is not a metaphor but a real ability to anticipate the behavior of their trading system and project the value of their own account into the future.
This is the key to making informed decisions and achieving success in the world of trading.
And let's remember, to accurately calculate the expected value of returns, it's necessary to have, as a foundation, a repetitive trading system—a set of rules that are always applied strictly and disciplined. These rules form the basis for correctly conducting statistical inference, as explained in previous posts. It's the aggregation of many individual events over time that ultimately allows for probabilistically inferring the mean value in the future.