Making Money with Math

Asad Dossani
Do you ever remember sitting in math class thinking when I am ever going to use this stuff in the real world? Well, here's your answer...

But first, let's take a step back. What determines the market's next move? It is the combination of each and every action of each and every market participant. Some buy, some sell, others do nothing. Market prices reflect the sum of everyone's decisions.

We can't observe what everyone is thinking. For this reason, we can't design a trading strategy with this starting point. Too many variables are involved.

We can observe prices. But if we simply analyze prices, most movements appear random. Neverthless, predictable patterns are there. We just need to find them.

My approach to trading is simple: Apply statistics to filter out the randomness and find the patterns. This approach has given me great success for three reasons.

The first is objectivity. A statistical approach is based on data. Hard numbers. No opinions or rumours. Just the facts. An objective trading strategy means you keep your emotions out of the process. You trade when it's in your favor, and you stay put otherwise.

The second is discipline. An objective, system-based strategy ensures discipline. It ensures that you get out of losing trades at the right time. It ensures that your losses are kept to a minimum. It keeps you humble.

(This is especially important for new traders. Early on, it is very easy to succumb to temptation. Imagine that your trade loses money and hits the stop loss. But you're so convinced it will recover that you hold on to that trade. My approach to trading means you'll never have this problem. It saves me a lot of stress, and improves my returns in the long run.)

The third is that it plays to my strengths. My skills are mathematics, statistics, computer programming, and data analysis. I know that I can apply the most sophisticated and cutting-edge statistical methods to identify profitable trading opportunities.

Playing to your strengths is incredibly important. It's what gives you an edge over the competition. When designing your own strategy, you should think about what you're good at and what you enjoy doing.

For example, if you are more visual, you may prefer analyzing charts. Alternatively, a statistical approach to trading is great for people who are good with numbers.

I've spent the last few years working on and designing a statistically based trading system. One that is objective, enforces discipline, and plays to my strengths.

But the best part is its ease of use. My approach is designed so that anyone, no matter their background or experience, can use it successfully. If this sounds like your cup of chai, then I encourage you to learn more.

Do you enjoy working with numbers? Let us know in the Club or share your comments here.

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5 Responses to "Making Money with Math"
John.Jayachandran
24 May, 2016
mathematics is mother of science.The scientific approach to investment will really bringforth fruits.Science never fails. Analysing numbers will produce good numbers.Guide me please.Like 
Deepak
18 May, 2016
Explain reading chart for trading purposes.Like 
jayanand
18 May, 2016
sir i am an small employee. interested to invest some money for monthly return. It will help me to lead my family expenses. can you guide me.Like 
shakil
15 May, 2016
please share good stategy that can play making money with maths or numbersLike 
himangshu das
14 May, 2016
i am n retd employee. i am interested to invest up to Rs.2.00 lacs to earn profit on monthly basis to earn my bread. How can u help me?Like (1)
We request your view! Post a comment on "Making Money with Math". Click here!