Trading With an Edge

By | May 14, 2024 5:30 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 to 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 what 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 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!

Category: Trading Education

About Bramesh

Bramesh Bhandari has been actively trading the Indian Stock Markets since over 15+ Years. His primary strategies are his interpretations and applications of Gann And Astro Methodologies developed over the past decade.

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