Probability of Touch vs Probability of Profit | Kunkafa

Suppose a market starts at 100 and a forecast gives it a 70% probability of reaching 102 within seven days. Does that mean buying now has a 70% probability of making money? No. The forecast describes a price event. Your trade also has an entry, an exit, costs and a sequence of events between them.

Kunkafa helps you think through market scenarios by showing Kunkafa’s confidence in reaching movement levels within a duration, in both directions. Keeping that definition attached to the percentage makes the forecast more useful. Here is how to read it without turning a market probability into a promise about a trade.

What probability of touch measures

For this example, “touch 102 within seven days” means the observed market price reaches 102 or higher at some point during that window. It does not require the price to remain there or finish there. A closing-price forecast would ask a different question: where is the market at the end of the period?

The market, movement level and duration belong together. A probability of reaching +2% over seven days cannot be carried over to +2% in the next hour. Nor does it describe a position entered later at a different price. Kunkafa's market forecast methodology and definitions explains how to interpret the figures on the site.

Three paths to the same target

Imagine a hypothetical long trade entered at 100, with an intended exit at 102 and a stop at 99. The following paths are teaching examples, not live forecasts or equally likely outcomes. To isolate the timing, assume full execution at each stated exit price and ignore costs for now.

• Target first: price moves from 100 to 102, then back to 100.50. The target was touched. A trade exited at 102 has a gross gain even though the market finished below the target.
• Stop first: price moves from 100 to 99, then to 102. The target was still touched within seven days. But the assumed trade already exited at its stop for a loss.
• No target, positive finish: price reaches only 101.50 and finishes at 101. A trade held until that finish has a gross gain even though the target-touch event never happened.

These examples explain why neither event can stand in for the other. A touched target can accompany a losing trade; an untouched target can accompany a profitable one. Changing the exit rule changes the trade outcome without changing the historical price path.

Why Kunkafa shows both directions

An upward level and a downward level can both be reached during one period. If an illustrative forecast assigns a 70% probability to touching 102 and a 60% probability to touching 99, those numbers do not need to add to 100%. The events overlap. Neither percentage tells you which level is reached first, and subtracting one from the other does not give the probability of a winning trade.

Execution and fees change the result

The simplified paths assumed exact fills. Actual order handling adds another question. For stock orders, the SEC's Investor.gov explanation of market, limit and stop orders states that market orders do not guarantee an execution price and limit orders do not guarantee execution. A stop order becomes a market order when triggered. A chart reaching a level therefore does not establish your fill price.

Costs matter even with exact execution. Buying 10 units at 100 and selling them at 100.20 produces a gross gain of 2. If combined entry and exit costs are 3, the net result is a loss of 1. These are invented amounts in the same currency, excluding taxes and other charges. Use the Kunkafa trading fee and profit calculator to explore your own explicit cost assumptions.

Read the forecast and the plan separately

Before interpreting a percentage, identify its market, level, direction and deadline. Then separately describe the proposed entry, exit rules and costs. If the question is “will the target come before my stop?”, a target-touch probability alone cannot answer it.

Explore the Kunkafa market forecast demo to see both directions, and read the Kunkafa forecast performance results using the stated outcome definitions. Kunkafa simplifies market reading by making scenarios easier to understand. A forecast remains a forecast, not a guarantee of profit or an instruction to trade.