You don’t need to know how to make money in the next step because no one knows for sure. Anything can happen, and the only certainty is that the market is constantly changing.
Every moment is unique, which means that every advantage and every outcome is a unique experience, so it’s important to allow mistakes to happen. Don’t be influenced by the past and trade according to the rules.
In trading, wait for the advantage to come and then repeat this process mechanically, time and time again.
In our actual trading experience, we have encountered many problems and found that more and better market analysis cannot solve trading issues or achieve consistent profits.
Moreover, many times, various analyses contradict each other.
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The reasons for leading a market trend may be just one factor, and it may change in another stage. More variables and parameters do not help us solve practical problems.
Be Mentally Strong
Traders cannot find more factors for trading success externally. Instead, they can look inward and realize that their attitudes and mental states can determine trading outcomes. Clear beliefs and attitudes are essential for the mindset of trading winners, which means we need to learn how to think in terms of probabilities.
- You don’t need to know how to make money in the next step because no one knows for sure.
- Anything can happen, and the only certainty is that the market is constantly changing.
- Every moment is unique.
Every moment is unique, which means that every advantage and every outcome is a unique experience, so it’s important to allow mistakes to happen.
Don’t be influenced by the past and trade according to the rules. In trading, wait for the advantage to come and then repeat this process mechanically, time and time again.
Embrace Risk and Maintain Belief
Developing the Right Attitude
Develop a unique attitude – one that keeps us disciplined, focused, and confident even in unfavorable conditions. The best traders not only accept risk but also embrace it.
Trading requires fully accepting the inherent risks of each trade, which is also the cost of trading. The best traders do not hesitate or conflict during trades, even in the face of losses, and they do not feel uncomfortable when exiting a trade.
In other words, the innate risks of trading do not make the best traders lose their discipline, focus, or confidence. If one cannot trade without emotions (especially fear), then they haven’t learned to accept the inherent risks of trading.
Accepting Risk and Overcoming Pain
Acknowledging our mistakes and incurring losses is extremely painful and something we definitely want to avoid.
However, as traders, we must constantly face these possibilities.
Once we learn the skill of accepting risk, we won’t feel pain regardless of how the market moves. If the market doesn’t have the power to make you suffer, there is nothing to avoid.
Objective Thinking and Probabilities
Traders only see probabilities and establish an objective mindset – not being influenced or distorted by fears of what might happen or what might not happen. Because the market is neutral, it doesn’t control how we interpret information, make decisions, or take action.
A wrong attitude generates fear instead of trust and confidence.
The best traders are not afraid. They are not afraid because they enter and exit trades based on the opportunities presented by the market, while also maintaining a cautious attitude.
To some extent, everyone is afraid.
But when some people are no longer afraid, they tend to become reckless and impulsive, and the result of recklessness is that they start to fear again. If you fear making mistakes, your fear will lead to a flawed understanding of the market, resulting in errors.
The Importance of Knowledge and Confidence
You can’t acquire enough knowledge to compensate for the negative impact caused by fear, and you won’t be objective or act without hesitation.
In other words, there will be no confidence in the face of ongoing uncertainty.
Cruel and cold trading refers to the fact that each trade produces uncertain outcomes. Unless we learn to fully accept the possibility of uncertain outcomes, we consciously or unconsciously avoid the pain we define.
Ensuring Consistency
Fully accepting risk means accepting the outcomes of trades without mental unease or fear. This also means not defining and interpreting market information in a painful way.
When we no longer define and interpret market information with pain, we simultaneously eliminate these tendencies: finding excuses, hesitating, acting prematurely, hoping the market will give us money, hoping the market will rescue us because we don’t know how to set stop-loss orders.
Once fear disappears, there is no reason to make mistakes, and the result is that they truly disappear from our trades. It automatically becomes a carefree state of mind.
Eliminating fear is only halfway there. The other half is to exercise restraint. Use internal discipline or a mechanical thought system to counteract the negative effects of excessive excitement or overconfidence caused by a series of wins.
The consistency we seek is in our thoughts, not in the market.
Market Analysis Cannot Solve the Fundamental Problem
We do not disregard the need for market analysis; however, market analysis alone cannot lead to consistent results. It cannot solve trading problems caused by lack of confidence, discipline, or improper focus.
The Limitations of Market Analysis
Market analysis, while important, cannot provide continuous consistency in trading outcomes. It fails to address issues stemming from lack of self-confidence, fear, or misguided focus. Confidence and fear are conflicting thoughts that arise from our beliefs and attitudes.
Confidence demands unwavering self-belief, even in situations where losses surpass our expectations. However, without training our minds to navigate inconsistent thoughts, true confidence remains elusive.
Learning how to analyze market behavior alone will not fulfill the ultimate objective of successful trading.
The Significance of Attitude
Success hinges on attitude. While many people understand this concept, they often underestimate the impact of attitude on outcomes. Contrary to popular belief, a substantial shift in market awareness alone is not the key to success.
Rather, it is the fundamental transformation of one’s attitude that holds the true key to success. The market carries no responsibility; it operates according to the principles established at its inception.
Blaming the market or feeling betrayed indicates a failure to accept the reality that the market owes you nothing. Regardless of your thoughts or efforts, the market remains indifferent.
Taking Responsibility: The Key to Overcoming Trading Challenges
Taking responsibility means firmly believing that all results are caused by yourself, and trading outcomes depend on one’s perception of the market.
It requires accepting the decisions made and the resulting actions. Failure to take complete responsibility leads to two major psychological obstacles that hinder success.
Relationship with the Market When traders view the market as an adversary, they miss opportunities for consistent results. Shifting focus towards blame and missed opportunities prevents the attainment of sustained consistency.
Recognizing the Limitations of Market Analysis
Traders often fall into the trap of believing that market analysis alone can solve their trading problems and failures.
However, this perspective is misguided. Market analysis is just one component of successful trading and cannot address all challenges.
Preventing Pain: An Impossible Task
Attempting to avoid pain by preventing losses is an exercise in futility. While the market exhibits patterns and repetition, it does not follow the same course every time. This demonstrates that there is no foolproof method to avoid losses or mistakes.
Traders who focus solely on avoiding errors ironically end up making more mistakes. The market is probabilistic, and even the most skilled traders can make mistakes. Embracing this reality and taking proactive responsibility is crucial.
Shifting Focus from Winning to Risk Management
Shifting the focus from solely pursuing gains to preventing future market harm is essential. Placing excessive emphasis on winning and avoiding losses impairs one’s ability to tolerate information that could be beneficial.
The more information one blocks, the fewer advantageous opportunities they can identify.
It is imperative to focus on what attracts you and not allow past losses to dictate future trades. Each trade should be approached as a new beginning, free from the influence of fear or the desire to protect oneself from market harm.
The Complexities of Learning and Expectations
The belief that acquiring more market analysis knowledge can prevent pain leads to complex issues.
The more one learns, the higher their expectations from the market become. If the market fails to meet these inflated expectations, pain intensifies.
Unbeknownst to traders, this creates a dangerous cycle: the more they learn, the more exhausted they become; and the more exhausted they become, the stronger their perceived need for further learning.
Learn to Think in Probabilities and Build Sound Expectancy Management
When starting to leverage opportunity advantages, do not have any restrictions or expectations on market behavior. During the market’s progression, it will create opportunities that you define or perceive.
Seize these opportunities and make efforts, but keep your thinking independent and unaffected by market behavior. Once you accept risk like a professional trader, you won’t perceive the market as a threat.
Only a few individuals have the appropriate beliefs and attitudes regarding responsibility and risk when they begin trading. It is necessary to approach the market objectively and avoid misinterpretations.
When trading, there should be no pressure or hesitation, and it is important to overcome the negative effects of excessive confidence or excitement with a positive attitude. The core objective is to shape the trader’s mindset.
Trading begins with identifying opportunities. If there are no opportunities, there is no reason for us to trade.
As traders, we should not be obsessed with “knowing how the market will behave” or trying to predict the next moves of the market. Because for any variable, even if you consider it an advantage, the distribution of wins and losses is random.
We cannot predict the sequence of wins and losses, nor do we know how much money we will make specifically. This fact demonstrates that trading is a game of probability or numbers.
Once you believe that trading is a game of probability, concepts such as right and wrong or wins and losses become less important. With appropriate expectancy, you will not interpret the market as painful or threatening, and you will effectively neutralize emotional risks in trading.
Maintain Consistent Strategy
Objectively confirm the advantage, which is the result of long-term experience and analysis.
However, the advantage is not completely correct; it simply represents a higher probability. Therefore, before each trade, it is necessary to assess the risks in advance, be prepared for errors, and fully accept the risks. Otherwise, abandon the trade.
When trading based on an advantage, do so without any reservations or hesitations, avoiding associations, especially the influence of recent trades, and maintain independence and objectivity.
At the same time, monitor the possibility of making mistakes and enforce discipline, never violating the rules.
