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Hello,
In the slide 2 the formula: z-score = (N * (R-.5) -X) / ((X * (XN)) / (N-1)) ^ 1/2, I guess the red parenthese is mistypo.
Now my doubt is about the formula itself. From my studies of statistics, you can calculate z-score using the mean and standard deviation, that is easily calculate with the samples of your trades.
But with this Al's formula, there are a lot of other variables, like winning or losing streaks. I didn't get the logic of this formula, despite I think z-score is very important in managing risk and backtest.
Someone could explain to me?
Thanks in advance.
Not me! I skipped the formula and the entire section when Al said in one of the first slides that it was not needed for trading...
