Time Reveals Much

The longer you spend in this space, the more you learn. The more you are able to discern and identify patterns and behaviors of the past. Those who have only been involved in financial markets for a few years are perhaps, still unaware of how truly significant this dynamic is. The more you know… the less you know, as it becomes glaringly obvious how many factors can actually affect trends and price performance.

The desire to “win” is a trader’s worst enemy. Why? Because it has the ability to translate traders into an emotional realm. A place where rationality and objective analysis are to be “checked in” at the door. In this realm of thought, there exists only the desire to “increase”. Data and facts are laughed at, in a similar way that a drunk man laughs at a stern warning, just prior to catching something a little stronger. An experienced trader does the opposite.

He checks his desires in at the door and chooses to enter a mental environment of objective analysis and study. You simply can’t make wise decisions when emotional energy and euphoria are pumping your brain into an almost altered state. Take a look at the “typical moonboy“. Some may argue that he’s on something. This is the result of unbridled emotions and a lack of objectivity.

Attack Your Own Thesis

Instead of looking for confirmations, a trader should be looking for data that is counter his decision/call. Seeking out potential weaknesses is how the reliability of any good product is achieved. If you want to have high-probability trades, you need to challenge your thesis. Bulls need to seek out bearish possibilities. Bears need to seek out bullish possibilities. It sounds rather simple in theory.

However, it requires a level of maturity to behave in such a way. Do you know how many market participants refused to entertain a bearish possibility in the scenario pictured below?

To continuously promote an idea when it is failing repeatedly is a rather severe level of stubbornness. Such behavior relies on one thing: Luck! This means that any successful trade is not the result of accurate analysis and discipline, but rather a case of a broken clock being correct twice a day.

If you consider 2 hours against 24 hours, you will arrive at a rather disappointing success rate. Winning 2 trades out of every 24 is definitely not going to be generating any profit whatsoever. The losses far outweigh the “lucky wins”. When it comes to emotional trading, void of structured disciplines, the odds are fairly similar.

Final Thoughts

The average market participant is wrong 90% of the time. This is a well-known fact. However, it continues to be a prevalent trend. Why? Because people simply refuse to do what is required. Spend some time with truly successful traders and you will realize just how level-headed they are.