Guest post from www.visionsofaffluence.com
Do you really think you can reliably predict the market? I hope you don’t because that is the one of the biggest mistakes a trader can make. If you want to be successful in this business then you are going to have to realize that trading is a probability game and any efforts to predict or time the market will only result in failure. That’s not to say that you can’t trade successfully, but if you are its going to be because you play the percentages not because you have a gift for predicting exactly when market moves are going to occur.
By play the percentages I mean that you need to find events that generally signal certain market actions and then base your trades around them. For example if you know that when price moves up to a resistance level and then fails to break through it tends to then move in the opposite direction, then it may be a good idea for you to go short when you see this occur. This is an example of playing the percentages because you know that there is a high probability of price moving down, in fact you know there is a greater chance of it moving down than moving up so you have probability on your side which would make it a good trade.
This is how every working system or method is created. A trader notices a pattern and the subsequent market behavior and then uses it to profit by trading in the direction of most probable price movement. It’s that simple. It has nothing to do with predicting the market or seeing the future, but rather it’s all about noticing a pattern and playing the percentages.
So if your still trying to magically predict the market give it a rest because its not going to get you anywhere. Instead open up your charts and start finding recurring patterns of market behavior and start basing your trades around. In fact you don’t even have to do that because many traders have found these patterns and discovered the best way to trade them so that all you have to do is learn their method and implement it if you want to profit. It doesn’t make sense to try to reinvent the wheel if you don’t have to. So get out there and find some working methods and implement them into your trading plan, but remember always demo trade a new method before going live.
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