March 19, 2020

The Important Concept of Expected Value

Many traders look at their win to loss rate when evaluating their trading.  This is an important concept, if you are right way more than you are wrong, you probably are not going to enjoy much success.  But, many are missing one part of the puzzle, expected value.  Not only IF you are right or wrong, but what happens when you are?  If you are right 99% of the time yet blow out your account on the one time out of 100 that you are wrong, you are still sunk.

Click the video below to see me break down this important topic

Follow me on Twitter: @MikeShorrCBOT

about the author:

Mike Shorr

Since 1994, Michael has been an on-the-floor market maker, Vice-President of Interest Rate Derivatives for Knight Financial Products and Director of Education and Options Instructor at Trading Advantage. He makes the oftentimes complex world of options and trading accessible to the novice and advanced trader alike. Michael has a Bachelor of Science degree in Statistics and Finance from the University of Illinois Champaign-Urbana. He presently is Director, Trader Education at ProsperTradingAcademy.

Read Similar Articles

January 21, 2026

Could Penny Stocks Be The Big Play In 2026?

Written By: Howard Greenberg As everyday traders put their trading plans into action for 2026, penny stocks might not be on many of their radars. It’s totally understandable why penny stocks may not appeal to the more calculated seasoned traders. Their reputations for susceptibility to manipulation, extreme volatility, and low liquidity make them way too […]

Read Article
January 13, 2026

Credit Card Interest Rate Caps: What Traders Could Expect

A high-profile policy debate has re-entered the financial spotlight surrounding credit card interest rate caps. Last week, President Donald Trump called for a temporary national cap on credit card interest rates. He proposed a maximum annual rate of 10% over a one-year period, starting January 20, 2026. President Trump’s proposal would aim to combat the […]

Read Article
December 23, 2025

3 Top Indicators For Day Trading Options

Make no mistake…day trading options can be very profitable, but it can also be very risky. If you don’t know what you’re doing—you will get burned. When I first started day trading options, I learned that lesson the hard way quite a few times, but those experiences made me a better trader and coach. I’ll […]

Read Article

Sign Up to Receive the Latest Trading Tips and News from Prosper

Categories

Most Popular

CONNECT WITH US

Read Similar Articles

https://www.prospertrading.com/howard-shares-his-golden-rule-for-crypto-wallets/Howard Shares His “Golden Rule” For Crypto Wallets
March 7, 2026

Howard Shares His “Golden Rule” For Crypto Wallets

In 2025, over $3.4 billion was reportedly stolen from crypto wallets—a record high. Storage security for cryptocurrency is a growing concern among traders of digital currencies like Bitcoin, Ethereum, and other altcoins. While many developers of crypto wallets are constantly working to stay ahead of the sophisticated capabilities hackers possess, many industry experts fear the […]

Read Article
https://www.prospertrading.com/iron-condor-helps-scott-nail-avgo-trade-idea/Iron Condor Helps Scott Nail AVGO Trade Idea
March 6, 2026

Iron Condor Helps Scott Nail AVGO Trade Idea

The Iron Condor is a neutral options trading strategy that can have bullish or bearish leanings (depending on how it’s structured). It’s designed to profit when the price of an underlying asset moves within a specific tight range (ie, sideways) and volatility decreases. For Scott Bauer, the Iron Condor is one of his go-to options […]

Read Article
https://www.prospertrading.com/volatility-skew-scott-shares-an-intriguing-market-theory/Volatility Skew: Scott Shares An Intriguing Market Theory
March 4, 2026

Volatility Skew: Scott Shares An Intriguing Market Theory

Volatility skew is the difference in Implied Volatility (IV) between out-of-the-money (OTM) calls and puts with the same expiration date. It signals market sentiment by showing whether traders are paying more for downside protection (puts), or upside potential (calls). As a result, this type of trading action creates a “skewed” shape in the volatility surface […]

Read Article