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We have all been there before. You look at your charts and you see a classic pattern forming be it a head and shoulders or bear flag or any of the other well known trading patterns. Since you’ve seen this pattern many times before and you just know exactly what the market is going to do, you decide to load up on positions in anticipation of the big move you know is coming. You do this because you know exactly which way the market is going to go so it only makes sense for you get in position before it happen so that you can maximize your profits. This is a great idea but there is on problem, the move you were waiting for never happens, and in fact the market moves in the opposite direction leaving you with a nice sized hole in your account. Why did this happen? It’s simple, you but your cart before the horse.

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Look I know just as well as the next guy how sure you feel when you “know” something, but the thing you need to realize if you ever want to be a successful trader is that you don’t know anything. The market is going to move how it wants to move and when it wants to move. You think the market cares that your charts are showing a head and shoulders pattern? Guess again.

You see as traders we are constantly at the mercy of the market. All of our techniques, patterns, and systems at their core are only guesses based on prior market behaviors, and if on that particular day the market decides it wants do the exact opposite of what our tools say it should then there is nothing that we can do to stop it. For this reason it is imperative that you trade what you see and not what you know. If you see something on your charts and you think you know what the market is going to do, don’t just jump in and start opening positions in anticipation of the move. Instead wait for the price action to confirm your theory before taking action. Yes that will mean that you won’t get as good an entry, but its better that than taking a loss because you didn’t “know” as much as you thought you did.

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