The “Market is Always Right!”

By | October 19, 2021 4:02 pm

Unsuccessful traders are obsessed with market and data analysis. They crave the sense of certainty that analysis appears to give them. Although few would admit it, the truth is that the typical trader wants to be right on every single trade. He is desperately trying create (the illusion) of certainty where it just doesn’t exist. The irony is that if he completely accepted the fact that certainty doesn’t exist, he would create the certainty he craves: He would be absolutely certain that certainty doesn’t exist. You either get this, or you don’t.

Conversely, traders who have learned to think in probabilities are confident of their overall success, because they commit themselves to taking every trade that conforms to their definition of an edge. They don’t attempt to pick and choose the edges they think, assume, or believe are going to work and act on those; nor do they avoid the edges that for whatever reason they think, assume, or believe aren’t going to work. If they did either of those things, they would be contradicting their belief that the “now” moment situation is always unique, creating a random distribution between wins and losses on any given string of edges.

  • They have learned, usually quite painfully, that they don’t know in advance which edges are going to work and which ones aren’t.

  • They have stopped trying to predict outcomes.

  • They have found that by taking every edge, they correspondingly increase their sample size of trades, which in turn gives whatever edge they use ample opportunity to play itself out in their favor, just like the casinos.

  • If you are one of those who has released the desperate need to be right on every trade and is confident you can consistently apply tactics that will keep the odds in your favor no matter the market does next, you get it.

    If you are one of those who is still chasing after the “neural network” system that will somehow accurately predict what the market is going to do next (good luck with that!), or who in general still believes there must be some way to know the unknowable (what the market will do next), or who sees no way that straightforward tactics-based technical trading methodology could possibly work, then you don’t get it. Trading will always be frustrating for you.

Understanding these paragraphs, quoted above, and applying these truths to trading, is the Holy Grail. It’s sitting right in front of you. All you have to do is pick it up and drink from it. The crazy thing, though — almost no one will

  • The market tells you (actually points in the direction) where it wants to go.

  • As markets move they leave behind what I call a “footprint”, this footprint is price action and it sometimes leaves us clue as to which direction it is heading next. These “clues” are known as price action trading signals / price action patterns / price action setups orprice action trading strategies.

  •  What we are seeking is a price pattern and a price action signal to give us some “confirmation” for an entry into the market.

  • The key principle of my Price Action Strategy is to keep things simple. I am against over complicating trading. In my opinion, the simpler the trading method is, the more effective it will be. With my Price Action trading strategy I aim to keep my charts as clean as possible (just price & time…NOT (lagging) indicators).

  • My job as a trader is not to will the market to go where I want it to go, but rather to discover which way the market is going and join it – get in step with it. That means total surrender of my will to that of the market. Surrender to it and go with it. If you set your will against the market, you will invariably be smashed. Forget being right! Concentrate on the fact that the market is always right.

  • I look at price patterns and market action (NOT indicators) as it is occurring NOW!

  • I look at a clean (“naked”) price chart consisting of just at PRICE & TIME goes to the core of my trading philosophy and approach, which basically says that I look to the market itself for my decision-making process.

  •  My strategy is to let the market put me in trades, and the market to take me out of trades.

  • This objective analysis enables me to have a sizable edge in terms of identifying market breakouts and/or reversals (turns) very early.

  •  Implicit in my approach is that it is more important to determine where a market is going (up or down) rather than the why behind it. I am indifferent to the direction of markets or the reason(s) for it going up (or down), rather my focus is on the precision of my entry points and controlled risk.

  • It is absolutely necessary to have an edge… “You can’t win without an edge, even with the world’s Greatest discipline and money management skills. If you Could, then it would be possible to win at roulette (over the Long run) using perfect discipline and risk control. Of Course, that is an impossible task because of the laws of

    Probability. If you don’t have an edge, all the money Management and discipline will do for you is to guarantee That you will gradually bleed to death.” Incidentally, if you don’t know what your edge is, you don’t Have one

2 thoughts on “The “Market is Always Right!”

  1. DALVIR MAULI

    PRICE DIRECTION IS REFLECTED ON CHART
    BUT AT WHAT TIME IT WILL CHANGE THE DIRECTION IS NOT
    HOW TO SYNCHRONIZE TIME AND ACTION ?

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