The Student Room Group

Why math is indispensable as a trader?(Citadel trader)

First and foremost, math is a language. We just like using numbers in the basic level and formal proofs in the advanced levels as a way to communicate. More precisely, its a language of thinking, if you can formalize the way you think, then you get math. That is pretty much it. Now how does this relate to trading?
Trading is about decision making, most amateur traders tend to think , making a winning trade means you are good and making a losing trade means you are bad, locally it looks like that, but in real life you have a massive super power that you'd be insane not to take account of, the fact that you can multiple trades over an unspecified time span, this means, with a good enough strategy, you can win in the long term and not lose sleep over the losses of today. Almost everyone with advanced math skills understands this intuitively, because they have trained their mind to only make decisions with good enough reasons, I've seen traders make huge losses but the management gives them a pass, why? the decision making was sound and soon enough they come up with a new strategy that mints the firm millions. What good thinking allows you is making high conviction decisions that most would chicken out of. And hey, an open secret in the markets, if your decisions are solid, the trend following crowds will eventually follow you, because nobody likes being on the other side of a trade without serious conviction behind it, so in a way, its a game of balls of steel, and if money is on the line, you need proper decision makers. It's just that we don't have avenues other than math to teach people this skills, otherwise most people with good training will do well.

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