I’m sure you have a desire to be right. I certainly do.
Because of this drive to be “correct”, I was always looking for concrete information to base my decisions on.
My line of thinking was that if I knew the reason why the market does what it does, then I could be right when I placed a trade.
But this type of thinking is a fallacy.
In the markets, there is no certainty. Often what we think is right turns out to be wrong. While the markets are not random, there are no guarantees about what it will do next.
Ever see the price sell-off on good news? Or no news at all? That is uncertainty in action.
The markets are all about probabilities and likelihoods. Every trade is uncertain. We don’t know what it is going to do.
To be a successful trader, you need to embrace this uncertainty. Be happy operating with limited information. Be happy not knowing what is going to happen next.
Instead of trying to be right, try the following:
- Understand probabilities about where the market is going to head next.
- Control your risk.
- Control your correlations.
- Control the number of positions you have on.
- Have a method for letting your profits run.
- Learn when the market is likely to reverse.
By focusing on what you can control, rather than on trying to be right, you will find trading much easier.
Cheers,
Sam
About the Author
Sam Eder is a currency trader and author of The Consistent Trader and the Advanced Forex Course for Smart Traders (get free access). He is the owner of www.fxrenew.com a provider of Forex signals from ex-bank and industry traders (get a free trial). If you like Sam’s writing you can subscribe to his newsletter or get FREE access to his acclaimed How to Be a More Consistent Trader Short Course.