A High Probability Trade Can Still Lose Every Time

A high probability trade can still hand you a run of losers, and that gap between implied and realised probability is what number of occurrences is about. Mike works through it with a coin flip and a poker hand, then shows why it changes how he sizes a position. His argument is that occurrences matter more for defined risk than for undefined risk, because a defined risk trade leaves you almost no defence beyond rolling it out in time. An undefined risk position can be adjusted, rolled down and repositioned, so the sizing question looks different. Education, not a recommendation. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 What number of occurrences means 00:56 Why it matters for defined risk 01:27 The coin flip example 02:04 The poker version of it 02:39 How he sizes defined risk 03:17 What defence you actually have 04:07 More flexibility in undefined risk 04:38 Rolling out and down 05:29 What that does to risk 06:14 Why defined risk is different 06:52 Losing streaks happen anyway 07:27 Patience instead of forcing trades #tastylive #optionsinaction #positionsizing #probability #optionstrading #riskmanagement #definedrisk #optionseducation #tastytrade #trading tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.