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A Time Traveler and a Trade

  #7 (permalink)

North Carolina
Trading Experience: Beginner
Platform: NinjaTrader, Tradestation
Favorite Futures: es
Posts: 644 since Nov 2011

The heart of the question is related to the utility value of money. As stated, the correct answer on questions like this is to find a backer which is a type of insurance. As stated, I would seek to find a backer/insurance and keep it. I presented this question as such lose everything or make 500 million with 90% odds: ask 1,000 people at a beach this and 100 will lose everything even though they had a huge edge. You can also change it around like, win 10 billion at 50% probability or lose everything. Given that most people no matter what they do will never make 10 billion even a coin flip is better then any other opportunity. But whether or not any individual should take the bet is based on their utility value of money and personal situation. Obviously, Bill Gates is not interested in that bet whereas someone in late teens or 20's living at home, with maybe $2500 to his name, well that's a no brainer. This is a sort of reverse insurance question.

Now if you are talking or thinking about a statistical probability event, that gets at a different matter. Obviously it is always better to risk less per trade if you can still have an edge but for most futures traders it is simply not possible because they cannot obtain edge in those spaces.

lax99 View Post
So would you scratch it or keep it on?

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