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P50

We talk a lot about taking 50% of max profit on your trades, this nifty feature will give you the probability of doing just that!

The p50 feature takes the trade you've loaded onto the trade page and runs it through a monte carlo style simulation, and calculates the theoretical probability that your position reaches 50% profit over 10,000 occurrences.

The X Axis simply shows you how many days it took to reach 50% max profit. The Y axis shows you what percentage of the 10,000 trades reached 50% max profit on (x axis) days.

For Example, if the highest orange bar is at 5% on the Y axis and 20 days on the X axis, you know that 5% of the 10,000 trades reached 50% max profit in 20 days.

One cool thing that you'll notice is that many p50 results have a higher number than the actual POP, and they reach 50% max profit well before expiration, showing you proof of concept in terms of the tastytrade research that we've done.

To access this feature, you must first be logged in with you TDAmeritrade brokerage credentials. Once logged in, head over to the trade page, type in the symbol you would like to trade, and put your potential position up on the page. After you have a potential position established, click on the "up" arrow at the center of the score card.

Now that you have found the feature on our platform, here is a little more information about it! The p50 feature takes the trade you've loaded onto the trade page and runs it through a monte carlo style simulation, and calculates the theoretical probability that your position reaches 50% profit over 10,000 occurrences. 

 

The number in the upper right hand corner is your overall percentage chance of reaching 50% max profit on the trade.

The X Axis simply shows you how many days it took to reach 50% max profit.

The Y axis shows you what percentage of the 10,000 trades reached 50% max profit on (x axis) days.

In this example, the highest orange bar is at 14% on the Y axis and 5 days on the X axis, you know that 14% of the 10,000 trades reached 50% max profit in 5 days.

One cool thing that you'll notice is that many p50 results have a higher number than the actual POP, and they reach 50% max profit well before expiration, showing you proof of concept in terms of the tastytrade research that we've done.
 

 

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