alt Hacker NewsMonte Carlo methods are used to estimate the risk associated with a prediction (and presumably an action taken against that prediction). Does that answer your question? I can elaborate if you like.
Monte Carlo methods are used to estimate the risk associated with a prediction (and presumably an action taken against that prediction). Does that answer your question? I can elaborate if you like.
It estimates risk based on your current understanding of the universe.
1. No guarantee that the universe tomorrow will behave as the distributions you used in your Monte Carlo today.
2. If the universe stats serving you 10 unlikely events in a row, is your model model wrong, or just 10 unlucky draws? If your model was correct and you start "correcting it" based on these 10 draws, you now made it wrong.