Probability Question
Hello there!!!
I wonder if anyone familiar with the probability theory can help me to clarify the following.
There is trading system which generates a winning trade per ONE stock in ONE month’s time with a probability of 5/12 (0,4166%). If the system trades 10 independent stocks the probability of any number of winning trades occurring out of all of them in ONE month is shown below:
None 0,0046
One 0,0326
Two 0,1047
Three 0,1995
Four 0,2494
Five 0,2172
Six 0,1272
Seven 0,0519
Eight 0,0139
Nine 0,0022
Ten 0,0002
I took these values from a book…I tried to reproduce these values in the spreadsheet that I attached. My table looks as follows:
0 0,0046
1 0,0033
2 0,0023
3 0,0017
4 0,0012
5 0,0008
6 0,0006
7 0,0004
8 0,0003
9 0,0002
10 0,0002
As you see the first and the last values agree but the rest do not. I was multiplying the probability of each of the 10 different trade probabilities by each other and got such small results unlike the author…Do you think you can help me to recreate the logic that the author used to generate his table of the probabilities?
Thanks a lot!!!
I attach the excerpt from the book and the spreadsheet
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