Meaning of Probability in context of Strategy Analyzer

[demo166130]

In the simplest way possible, could you explain what a high or low reading actually means. I've looked at the offiicial definition according to NinjaTrader and it isn't exactly registering.

Thanks

[NinjaTrader_JoshG]

Hello demo166130,
Thanks for your post.

What definition for probability are you referring to? The only official definition I see mentions "Student's t-distribution" as what is used to determine probability.

https://ninjatrader.com/support/helpGuides/nt8/en-us/?statistics_definitions.htm#UnderstandingProbability

[demo166130]

I'm talking about the definition you just posted a link to. Can you try and simplify it's meaning by saying 'if you have a high probability it means XYX, If it's low.... Really not fully understanding what it means.

[NinjaTrader_JoshG]

demo166130,

If you have a high probability it means it is more likely to happen. You can read more about Students t-distribution at the following publicly available link.

https://en.wikipedia.org/wiki/Student%27s_t-distribution

[demo166130]

I get the meaning of the word probability. The probability of what happening?

[NinjaTrader_JoshG]

According to the help guide it is the probability that a trade occurs that would return the same PnL as your Avg. trade.

[demo166130]

So a very low number would mean.......

[NinjaTrader_JoshG]

demo166130,

A very low number would mean there is very low probability that a trade occurs that would return the same PnL as your Avg. trade.

[demo166130]

Meaning the types of trade taking place in the period analyzed are outliers?

[NinjaTrader_JoshG]

demo166130, That is correct.

[madb123]

this whole conversations is incorrect.. low probability just means that your trades have largely diversified expected results.. example some profit 20 some profit 100 and some profit 10000..
however if all trades profit consistently 100 .. then your probability will be 100%

its useless KPI to look at in my opinion at least this is how i see it.