Historic Probability Distributions

Historic Probability Distributions

In financial markets, probability distributions are used to gain insights into the likelihood of future returns. In this video, Abdulla constructs a historic probability distribution based on actual market data, and highlights the advantages and disadvantages of using this model.
Overview

The historic distribution is often used in financial markets due to the advantages of plotting exactly how the market has behaved in the past. While this technique will never be 100% accurate, it can provide a good baseline of possible expectations.

Key learning objectives:

  • Understand how the historic distinction is applicable to financial markets

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Summary
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Expert
Abdulla Javeri

Abdulla Javeri

Abdulla’s career in the financial markets started in 1990 when he entered the trading floor of the London International Financial Futures Exchange, LIFFE, and qualified as a pit trader in equity and equity index options. In 1996, Abdulla became a trainer for regulatory qualifications and then for non-exam courses, primarily covering all major financial products.

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