The stock market is a chaotic system where it is impossible to accurately predict future price movements. However, probability theory allows:
- Identify statistical patterns
- Identify the most likely scenarios
- Shift the probability in your favor
- Create a system with a positive mathematical expectation
At the same time, 90% of novice investors lose money in the stock market precisely because of the lack of a mathematical approach to trading. The correct use of probabilities can significantly increase the chances of success in trading.
The key point is that trading is not about always being right, but about making decisions with a positive mathematical expectation. Even a strategy with a 55% success rate can be profitable with proper risk and capital management.
Thus, probability theory is a fundamental tool of a modern trader, which helps to make informed decisions and manage risks in conditions of market uncertainty.