Blueprint Remastered: Implied Odds in Trading

Introduction

• Overview of today's topic: importance of implied odds in trading.
• Emphasis on the presenter's use of implied odds for trading success.
• Discussed the concept of PA, RA, and CA (before, during, and after trade analysis).

Three-Lane Trading System

• PA (Before the Trade): Procedural analysis of pre-trade events.
• RA (During the Trade): Execution and ongoing analysis of the trade.
• CA (After Trade): Post-trade analysis that cycles back into the next PA.

Evolution of PA (Procedural Analysis)

• Old definition: Meta reports, technical markings, pre-market preparations.
• New definition: Expanded to include procedural events before trade decisions.
• Emphasis on considering procedural cues before making decisions.

Concept of Implied Odds

• Origin: Concept borrowed from poker; relates to potential profit from a trade.
• Example in Poker:
  • Pre-flop scenario: Ace-Ace or Ace-Jack hand.
  • Estimation of potential pot size based on expected calls and bets.
  • Calculation example: Initial $10 bet implying a total pot of $175.
  • Resulting implied odds: $75 spent for a potential $175, yielding an implied ratio of 2.3:1.

Applying Implied Odds in Trading

• Importance of measuring risk and potential profit in trades.
• Risk Assessment (RA): Identifying high-risk levels and points of polarity.
• Example: Weekly levels with high risk needing thorough RA.
• Polarity Points: Vital for identifying crucial support/resistance levels.

Practical Example

• Scenario: Weekly level knife catch example.
• Implication of high risk and necessary RA.
• Using text tools for better visualization.
• Establishing levels with trends and creating sub-categories.

Bankroll Management Lessons from Poker

• Splitting funds into smaller increments (e.g., 40 entries from $1,000).
• Allowing for consistent growth while minimizing risk.
• Comparison to trading strategies and bankroll management.
• Implied Trading Profits: Evaluating potential profits relative to risks.

Strategic Thinking in Trades

• Game Theory Optimization (GTO) in trading.
• Making optimized decisions by looking ahead and assessing potential outcomes.
• Comparing poker hands to trade scenarios (e.g., pocket aces vs. weaker hands like 6-7 suited).

Example Analysis

• Scenario Breakdown: Five-minute level example and subsequent hourly level.
• Evaluation of multiple potential entry points and assessing risks.
• Importance of marking levels: three-minute, five-minute, and using trends.
• Elements to consider: lower time frames, higher risk points, and polarity considerations.

Summary

• Continuous process of assessing procedural, risk, and post-trade analysis (PA, RA, CA).
• Importance of implied odds for measuring potential trade outcomes.
• Consistent evaluation and adaptation of trading strategies for successful results.

Final Notes

• Understanding implied odds for better risk management and trade decision-making.
• Using poker strategies and analysis to enhance trading effectiveness.