🚨I’ll be live at 3:30 p.m. ET🚨
Instead of the usual Closing Playbook session, we’re doing something much bigger today… Join myself, Nate Tucci, Roger Scott, Chris Pulver, Alex Reid and Emily Turner as we discuss how the options market has changed forever and more [tap to join us for today’s roundtable]!
First, don’t forget that we have an exclusive, live roundtable featuring myself, Nate Tucci, Roger Scott, Chris Pulver and Alex Reid at 3:30 p.m. ET today, hosted by the great Emily Turner!
We’re discussing how the options market has changed forever and more!
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Let’s get something straight right out of the gate…
A gamble is where you just take a shot and hope for the best. That’s it. No framework, no math, no repeatability — just hope dressed up as a strategy. And if you’re being honest with yourself, a lot of what passes for trading out there is exactly that.
Real trading starts where gambling ends. An edge means you have a positive expected value, and it’s high enough that it’s actually worth your time, effort and capital. Without that, you’re not building a disciplined process — you’re engaging in a slightly more sophisticated version of guessing.
3 Requirements You Can’t Skip
In order to have what we call an edge, you need a positive expected value — and it has to be high enough that it’s worth your while. An expected value of $1 per trade isn’t going to cut it. A thousand trades is going to take at least a year, if not three to five or even 10 years, so if you’re grinding through thousands of trades for a dollar each, you’re wasting your most valuable resource: time.
The expected value has to be significant.
To get there, here’s what the framework demands. First, your odds must be known and calculated to a precise value. Not a feeling. Not intuition. A calculated, verified number.
Most people fail on just the first one already — they don’t know the odds to the point where it’s calculated to a precise value. They feel like the odds are in their favor, so they trade. But if you don’t know and calculate it, then you’re gambling — because you’re just guessing and hoping that it’s in your favor.
Second, the odds must be in your favor. That sounds obvious, but without step one done correctly, you have no way of knowing if this is even true. You need to know for a fact, to a calculated value, that the edge is real before you put capital to work.
Then there’s the third requirement — and this is where it falls apart for nearly everyone.
Where Almost Everybody Fails
Almost assuredly, 99.99% of the time, when traders say “This isn’t working” or “I’m not making any money” or “Everything feels like a gamble” — they’re failing to repeat. They’re not executing the system with enough consistency and volume to let the math do its job.
You need several months to evaluate, at the very least, if your systems are any good. Anything less and you’re reacting to noise instead of measuring real performance.
Here’s the misconception that destroys most traders…
If you have a system that tells you you win 70% of the time, most people think they have a 70% chance of winning the next trade. The answer is no. You absolutely do not. In fact, if you just won 50 trades in a row and your statistic is that you only win 70% of the time, the odds of winning the next trade are actually really, really low.
Why? Because the Law of Large Numbers only works when you give it room to breathe. After just two trades, you can only produce a 0%, 50% or 100% win rate — none of which are close to 70%.
You need enormous repetitions before the actual statistics reveal themselves. People quit after five, 10 or 15 trades — either declaring it a miracle system or a scam — without enough repetitions to experience the true statistics.
If you want a simple example, look at the casino. They’re not losing a massive amount of money because they operate with a known edge and enough volume for the math to guarantee their outcome.
They don’t panic when someone hits a big win because they understand that over thousands of hands, their edge always asserts itself. Traders need the same discipline, the same patience and the same respect for scale.
Market conditions shift over time. You might run a long win streak in one environment, then hit a rough patch in another, and eventually revert toward your known statistic. That’s not the system breaking — that’s the system working exactly as designed across a large sample.
The only way expected value actually materializes is if you stay disciplined enough to repeat the process at scale.
So before your next trade, ask yourself these questions…
- Have I actually calculated my odds?
- Are they in my favor — provably, not just intuitively?
- And am I committed to repeating this long enough for the math to work?
If you can’t answer yes to all three, you’re not trading with an edge. You’re gambling.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. This New Weekend Trading Opportunity Stunned Me!
Thanks to a shocking anomaly in the options market, we can now target double-digit returns over the weekend!
Join Roger and me at noon ET on Thursday and you’ll get the details…
Including how you can join in on the very next opportunity.
