<aside> <img src="/icons/reorder_gray.svg" alt="/icons/reorder_gray.svg" width="40px" /> How avoid the fear of being wrong / Risk management / MSS / SMT
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When you are starting in trading, in genera, you can get overwhelmed by fear. It looks like a foreign language. Which market, which TF, how to enter correctly, etc… And its normal to be afraid. The biggest fear factor in most people is the fear of being wrong. There is nothing wrong in doing it incorrectly, but there is a lot of wrong when you do it impulsively, recklessly, over leveraging/trading and gambling. When we try to be correct we are placing an unrealistic expectation because nobody is perfect. The concepts don’t fail. You as an operator can fail to interpret them correctly and that’s okay.
We don’t use indicators to tell us where price is going. We are looking at the market places from POV and look how will traders get punished. They will get punished when the market hits their protective stop order. So where are those levels? Above old highs and old lows. The market will go there to stop traders out. This is the first thing that they learn from the retail concepts.
How do you build confidence in your analysis of where price is going to? -Days, weeks, months of back-test, forward testing and tape reading.
<aside> ⚠️ The price generates movements and price swings based first on the premise of time.
If its not the correct time it won’t deliver as we expect it to.
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The algorithmic theory is build upon the idea of cannibalizing retail traders. It will run above for the Buy stops and below for the Sellstops. The floor traders were making their money based on the orders that were coming in the market. We can visually see them way before they are traded.
In this example we have Bui stops and when price goes there, they become orders to buy at the market, willing buyers at a higher price.
The necessity of holding on to the outcome of a trade being RIGHT is flawed. You have to focus on the idea if you are making money. Is there a consistent way of doing so? Yes, but have to understand liquidity. Ask yourself:
When you journal, you should NEVER record negativity. Always sugar coat what has happened. Journal from the bright-side of things.
We took STH now, buy is above at 4041.50
You are worry about being right, because on want to feel safe. But you don’t make money, by simply being right. How many times you were right, but you didn’t have a trade on? Even if you placed a demo trade, you can’t buy groceries with that. So that’s not an argument.
How many times you were worried about being wrong in front of your wife or co-workers? They won’t understand what you are doing so don’t invite them in this conversation. They will bring their own fear. In this industry you are alone.
Don’t have wrong expectations that you will never be wrong. It’s inevitable so you might as well just embrace it early on and remove these distractions. You have to try and master yourself. Because you will never master the markets.
<aside> <img src="/icons/light-bulb_yellow.svg" alt="/icons/light-bulb_yellow.svg" width="40px" /> The first step is to wrestle the idea that you have to be right. You can be wrong in thinking where price is going and still make money. You can be right on that and still lose money.
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