The art of trading in financial assets consists in the correct forecast of price movement. Each trader has his own set of tools helping to analyze the market condition and determine points of market entry. It could be technical indicators, fundamental analysis of industry’s economic situation, news about the issuer, or combination of all these analytical tools. No matter how abundant the market analysis toolkit was, conclusions made always have probabilistic character. Experienced traders never say that the price of the selected stock will absolutely precisely reach a certain price level tomorrow. They always add – "probably", or "most likely". Therefore, any forecast always has a probabilistic character that the stock’s price or stock index value will appear in certain price range.

How can a trader estimate probability of the price appearing in a particular range? It is really a complicated problem. It is impossible to solve it without special knowledge, skills, and ability. That is why we offer using our ready-made tool.

e-MasterTrade specialists have developed a precise mathematical mechanism impartially informing about probability of the price appearing in a certain price range.

The figure below displays graphic representation of ProAnalysis.

Figure 1. Probability Forecast.

Possible values of the forecasted parameter are plotted on this axis. If closing price is analyzed, that will be possible future values of the closing price.

Percent probability is plotted on the axis of ordinates.

Different curves indicate their interval of uncertainty range.

Remember the main rule of the probability world - everything is possible, but with different probability. Is it possible that a stock price will be over $1,000,000 tomorrow? Sure it is possible. However, probability of this event is equal to 0. Is it possible to predict the closing price absolutely precisely? Certainly, it is possible. But the probability of this event is also close to 0.
Therefore, when talking about nonzero probabilities, we talk about some possible price value interval. The lesser the interval, the more accurate is the forecast, and the less probability, that it will come true. And, on the contrary, the greater the interval, the less accurate is the forecast, but it is more probable to come true. The figure helps to find ratio between forecast accuracy (interval value) and probability of its coming true, optimal for your purposes.

The sequence of working with the figure is as follows:

• Select any price value p0 on the abscissa axis;
• Mentally draw a vertical line crossing all the curves;
• Ordinate of the point of crossing with the curve corresponding to delta half-interval shows probability that the future price value lies in the range [p0-delta; p0+delta].

We can generate probabilistic forecast for all companies listed on NYSE, NASDAQ, AMEX, as well as for all leading American stock indices.

Do you need to know what stocks should be subject to probabilistic evaluation? You could answer this question with the help of our unique analytical tool.	Probabilistic price evaluation ?	Probabilistic index evaluation ?
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