Not absurd at all, this is a very correct view of trading. Only traders who have made a stable profit can understand that prediction is useless.
I have seen some people in the market who like to predict the market and ask, "What will the trend be like tomorrow? Will it be bullish or bearish?" I have even seen so-called financial fortune tellers who predict future trends by fortune-telling, which is essentially no different from blind guessing.
Perhaps one day or during a certain period, you may have good luck and keep guessing correctly, making consecutive profits. Then you will have immense confidence in your trading skills, which is a disaster for us technical traders. This may lead to huge losses, or even a margin call, and I believe those who have experienced it understand.
That is why I always emphasize: predicting the market is like entrusting your fate to luck, but luck can take you to heaven or hell. Therefore, we cannot gamble our future on luck, but should take control of our destiny in our own hands.
This is why I emphasize the importance of trading systems, probability optimization, win rate, risk-reward ratio, capital management, and so on.
What is prediction?
"Prediction" refers to the use of knowledge and means already mastered by people to infer the development state of future things. As an inference, it only represents a possibility, not certainty. The unknown remains unknown, which can still trigger a mentality of taking chances, anxiety, and fear.
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This is why many people go to fortune-tellers. If they hear good things, they feel comforted; if they hear bad things, they worry and fear, even thinking that the fortune-teller is wrong. This is also why the field of mysticism is becoming more popular, as it exploits people's curiosity about the future and their natural inclination to seek benefits and avoid harm.
So once human nature is exploited, many people who take advantage of others flock to forcefully implant the idea that "the market can be predicted." If the market is not predictable, it must be that your skills are not enough, so I use the pretext of predicting the market to take advantage of you.
Therefore, the essence of trading is not prediction, but pre-judging a possibility. The outcome may be success or failure. Accepting both outcomes and optimizing the probability of success to achieve a long-term profit effect is what we should pursue.It might sound a bit convoluted, so let me illustrate with an example.
Let me share with you my usual thought process when trading.
After my order enters the market, there are three possibilities: profit, loss, or stagnation, so I have to prepare three different plans.
If the market remains stagnant after my order enters, should I reduce my position or close it temporarily?
If the market moves in my favor and I'm making a profit after my order enters, should I set a stop loss to protect my gains, or should I add to my position?
If the market moves against me and I'm in a floating loss after my order enters, should I reduce my position or close it early?
There are many different situations in trading, and I set corresponding standards for each, so that when facing the unknown market, I know exactly what I'm doing with each step.
Under my consistent standards, all trading results can be statistically analyzed. I can then look at the statistical trading data to see how profitable the trading system is, what points need optimization, whether there are any issues with my own trading behavior, where I made mistakes, and how to correct them, and so on.
Therefore, I have no desire to predict the future; I only have the desire to optimize my trading results.
My trading system and my indicators will tell me when I should enter the market, whether to go long or short, how much to buy, and what to do if any problems arise.If there is a period of continuous losses, I would then extend the timeline to see if I have entered the decline phase of the trading system, how long it might potentially decline, and if there have been similar situations historically.
Thus, for me, trading has become a series of problems that need to be solved. I need to come up with solutions and plans to address these issues, instead of spending every day pondering: how will the market move tomorrow?
Systematizing trading is about turning uncertainty into certainty.
It's like two people who want to lose weight.
One person says, "I will start dieting tomorrow, and I will definitely lose weight!"
The other person says, "I will start dieting tomorrow, with a goal to lose 30 pounds. I will only eat two meals a day, with a fixed amount of meat and vegetables, and exercise for two hours every evening at 7 o'clock. I expect to lose this weight in 5 months. What to do if I can't control my appetite, and what to do if I'm too lazy to exercise, I have a detailed plan for all these scenarios."
The first person anticipated the possibility of losing weight but did not take action, just leaving a wishful thought. However, it is hard to truly lose weight by making promises to the air. The second person made a detailed plan and allowed enough time, so the probability of their weight loss success is higher.
After systematizing my trading, when encountering a market trend, for example, when the situation was previously unstable and the sentiment for risk aversion was high, everyone's forecast for gold was bullish. But in what form will gold take this bullish trend? What kind of pullbacks will there be in the middle? Volatility? Consolidation? How long will it take to complete this bullish trend? There are many uncertainties.
Many people who have already taken long positions encounter a period of volatility along the way, watching their profits shrink, and many start to worry and fear, closing their orders early, ultimately making a little profit but with no bottom line when it comes to losses.
So, systematizing trading is actually about turning the unpredictability of forecasts into the certainty of a system, which gives a psychological advantage and also an advantage in long-term profit outcomes.In the early days, I also started by predicting market trends, then moved on to searching for the perfect technical indicators and the perfect technical methods, until I finally realized that to follow the technical approach, a trading system is the only path to profitability. Many people will go through this process, but few will make it to the end.
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