October 20th, 2010 01:59 PM

Trading the markets — Probability quetion

I�m trying to analyse my stock market trading strategies.

I have listed the gains (a positive number) and losses (a negative number) that I�ve made on particular trades on the stock market.

I have listed the value of a stock market price volatility indicator (Bollinger Band) at the time of placing the trade.

Just looking at the list I�ve noticed that sometimes I have made a gain when the Bollinger value is low and sometimes high BUT larger Bollinger values seem to give larger gains (sometimes). So I�m hoping some sort of mathematical analysis will help identify a vague trading pattern.

[color=#4000FF]I need to know what is the probability of making a stock market gain at a particular Bollinger value .

For example from the data that I�ve given if I make a trade and the Bollinger reads, say 55 what is the likely numerical gain or loss. Or what is the probability that I will make a gain? [/color]

Is there a formula or method that can be used to work this out using the data I have given?

[color=#FF4000]-20[/color] is the loss I made when the Bollinger read 31

[color=#FF4000]-9 [/color] is the loss I made when the Bollinger read 29

[color=#0000FF]20[/color] is the gain I made when the Bollinger read 28

[color=#0000FF]9[/color] is the gain I made when the Bollinger read 39

[color=#FF4000]-1[/color] is the loss I made when the Bollinger read 39

[color=#0000FF]23[/color] is the gain I made when the Bollinger read 41

[color=#0000FF]15[/color] is the gain I made when the Bollinger read 29

[color=#0000FF]20[/color] is the gain I made when the Bollinger read 58

[color=#0000FF]4[/color] is the gain I made when the Bollinger read 36

[color=#FF4000]-20[/color] is the loss I made when the Bollinger read 62

[color=#0000FF]62[/color] is the gain I made when the Bollinger read 66

[color=#FF4000]-25[/color] is the loss I made when the Bollinger read 80

[color=#FF4000]-12[/color] is the loss I made when the Bollinger read 82

Is it just someting as simple as working out the average value of the Bollinger that gives the winning trade? I’m not a mathematician so avarages is as far as it goes for me. I hope to find a formula that I can paste into an Excel table.