This translates to project management as well. The possibility of correctly selecting the orientation of the flips is now down to one-in-four or 25%. Let us extend that further by considering we must predict two flips of the coin. The probability of picking the correct outcome from the flip would be one-in-two or 50%. Consider the flip of a coin you can pick heads or tails. Often not considered are the compounding implications of risks. There is risk associated with how we arrive at the decision. The last version, we make the duration up due to our stakeholder’s desired project introduction date, the level of risk is much higher. We rely upon the expert’s knowledge and past experience, we trust they are not jaded or wear overly rose colored glasses. The expert opinion is probably not as sure as a measured set over time. We know it can happen the way it has happened in the past. Historical data is measured and provides us with some risk mitigation. Those three methods of estimating, perhaps, do not have the same risk probability, the specific risk being the late delivery of the task to the schedule.
What about when we generate a date from expert opinion? What about when we need the task to take a certain length due to the end delivery date of the project? In those cases, the later especially so, we may just injected some additional measure of risk into the project. If our duration estimates fall within that range, we can perform some evaluation on the probability of successfully achieving that date. If we have used some historical data specific to that task then perhaps we already know the possible range of distribution for that specific task. Contingent upon our estimating methods that risk probability can be quite high. However, even our desired events, for example the completion of a task on the critical path at a certain time, have an associated probability. When we are looking at risky event, we are in essence establishing or assessing the probability of some undesired event coming to fruition.
But most of the time, if I read the market correctly it gives me a great risk reward.A discussion of risk would not be completed without a discussion of probability and severity. this result if market starts to range that i am stop out very fast, even if i am trading in the right direction. So my question is, Do I read his words correctly or am I missing something? And does this also mean that I should be more focused on a fixed lot size instead of fixed percentage? So that I am risking more money with a high probability, in this for example 300 usd instead of 100 usd? As I scalp the market my stop is often below or above the previous candle, depending on what direction I am trading. So in this case the risk is the same on every trade but the probability changes. I have to calculate it every time I enter the trade, but I have an EA for that. so the lot size will be every time different. If I go into a trade I risk 100 usd (1%) where ever I enter the trade or place my stop. I am a bit confused about this explaination because does this mean that I should use a fixed lot size and that means that my risk would variate for example between 0.5n to even 5 % per trade?Īs example I use a 10 000 usd account and a fixed percentage of 1% per trade. As I am risking a fixed percentage for every trade I do, instead of a fixed lot size. I have a question about what Al Brooks explain as a small risk but small probability and high risk with often high probability.