A penny doubled every day for a month is $5,368,709.12 after 30 days. The concept of doubling a penny every day may seem simple, but it demonstrates the powerful principle of exponential growth. The idea is to start with a penny and double it every day for a month, which leads to a surprising final …
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3x+1 Concerning the above math problem, Paul Erdös said that “Mathematics is not yet ripe for such questions.” He also offered $500 USD for its solution. Jeffrey Lagarias said in 2010 that this math problem: “Is an extraordinarily difficult problem, completely out of reach of present day mathematics.” Richard Guy has this on his list …
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Understanding the mathematical principles of profitable trading can help a trader understand how to create a positive expectancy trading system with an edge. The understanding of the underlying math can change how you look at your own trading and see what really matters: risk per trade, win rate, losing streaks, drawdowns, positive expectancy, and growth …
Qualitative analysis seeks to understand human behavior from the perspective of the researcher of information. It looks for the dynamic in an integrated reality. Information can be gathered through observation, historical research, and interviews of human behavior. Data is analyzed through descriptions and themes. Data is translated and reported through the perspective of the researcher’s …
In probability theory a normal distribution is a kind of probability distribution with a set value of random variables. The normal distribution formula is: Normal distributions are valuable in statistical analysis and is used a lot in trading to set values on random variables of future distributions that are not known. Normal distribution states that under market conditions over many average …
The Sortino ratio is a way to measure the risk adjusted return of an asset, investment portfolio, or trading strategy. The Sortino ratio is an adjustment to the Sharpe Ratio that filters volatility from upside moves from downside moves. The Sortino ratio only measures downside moves that are below a specified volatility target or return …
Simple interest is only calculated on the original amount of capital inside a set time period. It does not include the compounding effect of returns on new money accrued. Simple interest can be used over any time period but annual returns is the one that is most commonly used. Simple interest is calculated on original principle alone. Compound interest includes the additional …
The rule of 72 is a process for quickly projecting how long it will take for a rate of investment return to make capital double. The number 72 is used in figuring out the answer by dividing the rate of return percentage per period to get an approximation of the number of years in most …
For publicly traded companies and in investment terms the return on equity (Also abbreviated as ‘ROE’) is a way to measure the amount of net profits from a business as it relates to the total value of the equity of the enterprise. ROE is a measurement of how efficiently a business uses its asset value …
Standard deviations are used to measure current price action in relation to the average price of a chosen time frame. The assumption in the use of a standard deviation is that over the long term historical prices are distributed inside a bell curve. Although at times there are ‘fat tales’ or ‘black swans’ in prices …
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