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Understanding trading outcomes through the lens of probability theory

Reviewing trades offers the opportunity to unpack the impact of random probability upon a sequence of trading events. An extremely simplified view of probability theory relative to trading goes something like this: A prolonged sequence of futures (or FX, equities, cryptos – pick your poison) trades with a fixed $1000 profit target and a fixed risk of $1000 (normalized for underlying trends) should produce profits in 50% of the trades. A net loss would occur over time due to trading…

ABX Could be Leading Gold

I have  featured ABX in recent Factor updates as a possible proxy play on Gold.   The monthly chart exhibits a 28-month falling wedge. Remember that a falling wedge is a diagonal pattern and subject to less reliability and trickier breakouts.     The daily graph on ABX (Barrick Gold) displays a possible 7-week continuation H&S pattern.  Price broke out of this H&S on Friday, triggering a potential target on ABX of $18.14.       Factor Membership . Peter…