Today I want to actually talk about is don’t assume that you know what the market’s going to do.
That would be possibly the biggest mistake you can make in placing trades on the basis that you think you know what the market’s going to do, okay? (Watch the video here 14 mins)
Today I want to actually talk about is don’t assume that you know what the market’s going to do.
That would be possibly the biggest mistake you can make in placing trades on the basis that you think you know what the market’s going to do, okay? (Watch the video here 14 mins)
Assuming that you know what the market is going to do would possibly be the biggest mistake you can make in your trading!
I said it before in this book many, many times so far, if you just eliminate mistakes from your trading, you will have profitable months.
No doubt about it, if you just eliminate mistakes.
One of the biggest contributors to making mistakes in trading is trying to second guess the market.
You’re assuming it’s going to do something that you predict.
Instead constantly remind yourself that no matter what strategy you’re trading, trade what you see.
Not what you think the market’s going to do.
If you think about it, think about the last trade you placed.
Think about the last time you looked at the markets.
Think about the last time you lost a trade even.
Go back and think about what you were thinking at the time when you placed that trade.
I guarantee you a lot of the time your inner dialogue would be
‘Well, I think the market is going to do this, or it’s going to do that’.
Doing that you’re putting your own beliefs on to the market.
Therefore I say you trade your beliefs in the market, and you need to eliminate as much of your beliefs as possible.
In your head, the dialogue might well be that you’re assuming the market is going to go X, Y, and Z.
It is a natural thing to do.
In life, we make our decisions based on what we think is going to happen next all the time.
It may be appropriate in different areas of life, but when it comes to trading more than anything else that I know of, you must be point in time.
You must decide based on point in time, based on what you see in front of you, not what future expected outcome is.
In that moment, in that point in time, what is the market telling you?
Because that is why you will have heard repeatedly, if you are a trader, and if you’re not a trader yet, you will hear it.
You are never right. The market’s always right.
One of the reasons why that is a thing is because we try and be right with trading.
When we eliminate that need in our trading, we eliminate many of the mistakes we make in trading.
Just shift the thinking.
It’s a small but significant shift in.
Then you marry that with your strategy.
If it is telling you X, Y and Z, does X, Y and Z equal the rules of my strategy, yes or no?
Simple as that.
But we as humans try and complicate it.
We then put a whole host of our beliefs say, Well, I think it’s going to do this not that etc.
It appears to me it’s going to do that, or I assume it’s going to do this…..
Get rid of that dialogue out of your head, because what’s driving that is important.
Now, in order to understand what’s driving that, that’s where you must go into the 80/20 Rule of Trading.
Just be aware that that is what’s going on in your mind.
Be conscious.
And again, therefore I always say it’s imperative when trading to be consciously competent at all times.
You can’t afford to be unconsciously competent in your trading.
Because then you’re allowing your beliefs that drive your thoughts.
That drives your actions, which create your results and it is those assumptions than that take precedence over what is required in trading in the market.
You need to be conscious of what it is that you’re thinking or seeing on the charts and you trade what you see on the charts, not what you think is going to happen in the charts or what you think the market’s going to do.
It’s a very, very important, albeit on the surface of it, subtle difference between that and trading what you see.
In the Trading Community (our free Facebook Trading Community, you are very welcome to join), I did a deep dive, into understanding more about what your edge is.
A part of that discussion, if you didn’t see it, go to the Trading Community and please watch it because I believe it was a very powerful deep dive into what makes your edge.
One of the things I spoke about is a body of work that I created a number of years ago as part of what I call ‘The Trilogy of Challenges’™. And a part of that work is ‘marrying your inner technology with your outer technology’.
If you don’t know what I’m talking about, go and watch that Facebook Live in the Trading Community. It’s a free group to join.
I want to talk about it again here in terms of marrying your inner technology with your outer technology.
Your inner technology is what is going on in your mind, what are you thinking?
Be mindful of that and make sure that you are receiving the information the market is telling you.
Rather than you trying to tell the market what it’s going to do.
So rather than you trying to tell the market what it’s going to do or what you think the market’s going to do, this massive $5 trillion a day moving machine, rather, turn it on its head.
Be receptive to being told what the market is doing, and just trade what you see, not what you think it’s going to do.
That’s your inner technology.
Marry that with the outer technology, which is your strategy.
What are the rules of your strategy?
The information you’re receiving from the chart with the rules of your strategy, do they marry?
If yes, you have a trade to enter.
If not, walk away.
It’s a very subtle but a very powerful difference, and that is what’s going to keep you out of mistakes.
Then you keep out of mistakes and that is what’s going to give you profitable months.
Being consciously competent when you’re trading will help you avoid falling for that tendency.
That is why it’s incredibly important to what I call simultaneously assimilate the information the market is telling you when you’re looking at the chart.
Something to think about, something to bear in mind, something to start acting on that I promise you will have a significant impact on your trading, is what I call marrying your inner technology with your outer technology.
Inner technology being the information that you are receiving, you are humbling yourself to the market to be open to receiving the information it’s telling you.
Very important point. That is probably the most important thing you will ever learn about trading, what I have just said.
Being open, being humble enough to be open to receiving the information that chart is telling you, and then marrying that with the rules of your strategy.
Marry your inner technology with your outer technology.
You’re off and away.
When you do that, there is absolutely no reason why you will not have success in trading.
