Trading can be a perfectionist's worst nightmare. You can do everything right, have a proper entry signal or strategy that triggers, have your risk management engaged to protect your capital and you can even execute perfectly and still: The most golden setups can go wrong and slap you in the face.
When I started I thought I understood the uncertain nature of trading but I really didn't. I instead began to project what I had learnt onto the markets and got pissed when they moved in a different, unexpected way despite all my analysis efforts.
The truth is even the most ideal circumstances, conditions and setups can simply evaporate before your eyes. All it takes is one trader out there with a lot of money on his hands to make the market rip right through the point you took as a great entry point mere moments ago.
You can improve and work on your skills, work on your mental stability and open-mindedness all you want - in the end nothing in the markets is certain except for the very thing that just happened, the price change that got forever burned into the chart's history for all eyes to see.
I feel it is this discrepancy that makes trading so difficult compared to other skills we could learn: The time you invested to learn trading will never guarantee a steady rise in quality of results because the markets will never be under your control ultimately. But we can get better nevertheless, maybe even good enough to make the game work for us in the long run.
So how then can we approach something that's inherently uncertain?
We can use the odds in our favor. Every trader has heard that before - we have to move with the probabilities! However, in my own trading I have come to appreciate just how hard it is to accept this notion fully.
You see, as technical traders we have to somehow manage to do a "logical analysis" of the situation and still ride the wave of current market behavior as it unfolds, as best we can. We can never expect our analysis to play out - even if it has done so countless times in the past. Every situation is different.
If we do expect the market to behave exactly like we forecast we are setting ourselves up for a major mind & energy blockage once our idea fails in front of our eyes - and we'll be headless chickens, panic and do stupid things (which the market is counting on). Remember it's the best traders in the world you are competing against here. We can't afford to lose our cool.
There is always someone smarter out there, and especially someone with a lot more money to move markets in their favor. And there is nothing we can do against it, we can simply learn to swim with the current as best we can.
So how then do we tackle this issue?
We take guesses.
Not in the sense of random gambling though! We take educated guesses.
We do prepare for them, we make them conform to some sort of strategy we are following and we do our best to take every single occurrence of them we see on the charts. Since we are following a pattern that tends to play out in an expected way more often than not all we are really doing is risking an entry on chances that are slightly tilted in our favor, and repeat that over time.
Let us never make the mistake of being certain our entry will play out. Let us see all entries as educated guesses - as a way of saying: "Well, I can never know anything for sure in this market but I DO have to enter some trades somewhere if I am going to participate at all. So if I have to guess anyway in some way or another, might as well enter on the best guesses I can possibly make and never treat my entries like anything but a guess."
Seeing entries as guesses and maybe even saying to yourself as a precaution "This trade probably won't work" tends to calm the ego mind a lot for me, and it allows me the luxury of not confusing my "brilliant" technical analysis theory from before with the fact that I am still guessing in the end.
Noone can get mad at a wrong guess, because the one who made the guess knew from the start that it was a guess. Only when we plan something out minutely and reality doesn't conform to it in the end do we get angry, frustrated and annoyed. Don't!
Instead, conserve your mental energy for the potential dramatic moments that could follow and never be shocked when they do. Recognize immediately when your educated guess isn't playing out the way you hoped and take drastic measures right away.
Then go study charts, size up an opportunity and: guess again ;)
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