DislikedEurusdd, I'm glad to see you here. I've been thinking lately probabilities. And if we have the right thought, whatever the time we get to trade, we can make a profit. I hope not wrong. Your suppose an example of a rare event. We call "H" to hight and "L" for low. So if we have a set in H4, "{HHHHH}", we assume a rare event. I was reading discrete time and discrete processes. The drawback I find is that indicate independence of the variables. I think it is wrong, but something else these processes differ. In a discrete process we have the variable...Ignored
For example, the probability everyone will die is 1!!!!! Sure event. that does not mean you should NOT wake up tomorrow when you hear the bell. All you have to do is assume that tomorrow is not your day!!!
So, it really does not matter if the coin toss is independent or not!!! If I toss a fair coin 100 times, I am not expected to see 99 consecutive tails. Therefore, from the very start, if I have enough money, I can chase head 100 times and "EXPECT" a win!!! It does not mean that 100 tails is impossible; it is not expected!!!!
That is the power of expectation!!!
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