Probability Tracker
Chart Trigger Levels Based on Your Probability Budget
The Probability Tracker offers a quick visualization of trigger levels over time, based on your selected probability level. This tool helps identify possible option implied trigger levels according to your probability budget, providing a clear picture of market expectations.
Key Features
Probability Budget
Set your desired probability level to visualize potential trigger levels. This allows you to understand what exchange rate levels are implied by the options market, based on the probability you are willing to budget for.
How to Use:
Set Probability Level: Input your desired probability level into the tracker.
Visualize Trigger Levels: The Probability Tracker will display the corresponding trigger levels over time.
Example:
If you set a 30% probability budget, the Probability Tracker will show the trigger levels that have a 30% chance of being reached over various timeframes.
Probability Deficit
Indicates the required probability level couldn't be reached using the Probability Map. This means that based on the current market data and implied probabilities, there is no trigger level that matches your set probability.
Example:
If you set a 50% probability budget but the highest implied probability is only 45%, the Probability Tracker will indicate a probability deficit.
Probability Surplus
Indicates the lowest/highest implied trigger level is priced lower/higher than required for up/down triggers. This means that the market is pricing in a higher/lower probability for the trigger levels than what you have budgeted.
Example:
If you set a 40% probability budget and the lowest implied probability for an up trigger is 50%, the Probability Tracker will indicate a probability surplus.
Practical Applications
Informed Trading Decisions
By analyzing the trigger levels based on your probability budget, traders can make more informed decisions about setting entry and exit points. This helps in planning trades that align with market expectations and personal risk tolerance.
Risk Management
The Probability Tracker can aid in risk management by highlighting potential trigger levels. Understanding where these levels lie based on your probability budget helps in adjusting positions to manage risk effectively.
The Probability Tracker is a valuable tool for visualizing trigger levels based on probability budgets. By leveraging this tool, you can gain insights into market expectations and enhance your trading strategies with a clearer understanding of implied probabilities.
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