Modules / Module 04

Probability & Statistical Literacy

The mathematical foundation every trader needs

Master probability, Bayes' theorem, expected value, the Kelly criterion, calibration metrics like the Brier score, and the fallacies that trip up even experienced forecasters.

Chapters

  1. Basic Probability: Definitions and Axioms
  2. Conditional Probability and Bayes' Theorem
  3. Converting Odds to Probabilities (Decimal, Fractional, Moneyline)
  4. Expected Value (EV): The Trader's North Star
  5. Variance and Standard Deviation in Betting
  6. The Kelly Criterion: Optimal Position Sizing
  7. Understanding the Brier Score (Calibration Metric)
  8. Logarithmic Scoring Rule: How Markets Reward Accuracy
  9. Correlation Between Events: Joint Probabilities
  10. Common Probability Fallacies (Gambler's Fallacy, Base Rate Neglect)