Correct Mindset of a Trader:
A trader with correct mindset will make a mediocre trading strategy look awesome but a trader with wrong mind set, will destroy a strategy with a very powerful edge.
In my previous post I said that Trading is 80% mental, 10% goes towards money management skills and strategies and the rest is divided as 5% for entries and 5% for exits.
However sadly, 95% of traders put 80% of their efforts towards the 5% of the equation in trading and that is The Entries.
The Perfect Entry:
They want to make perfect entries. They want to nail those entries that bring winners 100% of the time, double confirmation, quadruple confirmation. Something to put their mind at ease before entering the trade, something that say “this trade is going to be a winner”.
Being Wrong or Right
However I have bad news for those traders. Sadly that is not gonna happen. Because trading is not a game of perfection. It is certainly not a game of being wrong or right. Oh no.
You cannot manipulate things into your favour in the market. You cannot change the market not even a tiny bit. Trading is a game of probability.
The Self Similar Repetitive Pattern
You might have found a pattern in the markets and this might be a great thing for you. You’ll be excited that now you will be able to better “predict” the market. But the reality is that all patterns have a certain “probability of success” attached to it. A certain pattern might give you an edge in the r form of 50% winners and 50% losers.
You may win lets say 60% of the time or less using the same pattern, but the very same pattern that looked beautiful and produced 100 pips this time, that exact same pattern might appear again the next time still it may bring 15 pips loser.
A new trader is baffled, surprised and even shocked. S/He does not understand as to why this pattern did not work this time? The pattern might look exactly identical but its unique its never happened before.
What you see is an an identical patterns yet unique at the same time. Its not the same patterns they are are similar but at the same time unique. You might think you woke this morning with the same person that you went to bed with last night but not only did the person next to you change over night you have changed as well.
“Everything flows and nothing stays”
“You Cannot Step in the Same River Twice” …. Heraclitus