Understanding Game Theory For Stock Traders

Are you a bull or a bear? Best be both. Game Theory is essentially picking favorable outcomes when there are different factors involved, each with a different goal. Is it preferable to be a bull or a bear? Well, actually neither. Utilizing game theory will help you realize that sometimes it is preferable to be a bear and sometimes it is preferable to be a bull, and sometimes it is better to be a duck, just kidding, no ducks here. 

However, putting all the jokes aside, if you have been following our blogs, by now you have an established trade plan and a detailed journal of your past trades. Using game theory, look at your journal and your trades and visualize the future probability of your future trades based on their history. Assign unmistakable probability of success and have a mind of your own. Using these tools and not being married to a title of a bull or a bear will optimize your strategy and place you in an optimal situation.

At YellowTunnel, three out of four trades are successful. Remember, you cannot control the market, but you can control your response to it. Stick to your trading plan. Journal your target gains and your target losses. Recognize your thoughts and, even though losing happens, don't be too tough on yourself and enjoy your wins.