When one usually says 'successful traders don't predict the market', what they really mean is they dont make a prediction that price will move from price A to price B or that any individual trade will be profitable, they simply execute a trade based on a signal and let the market decide the outcome of the individual trade. In the context of trading, there's no point predicting whether price will simply go up or down because a trade has no realised value until it's closed so its implicit in the statement that one is referring to a price movement between 2 points. This is especially the case where the trader has no control and fixed rules govern the behaviour of the trading system. You can have a 100% unrealised profit for the month but it means very little until all trades are closed and a profit is realised. It's implicit in every trade that you're making a prediction that over a given number of trades you will be profitable by executing trades whenever you get a trade signal, but that's not really in the context of the original statement.
Yea but you place a trade with a directional bias in mind or you would never..never..ever..place it in the first place lol
It is true that prediction implies what will happen. Probability implies the likelihood of it happening. Mickey shooting his double barrel shotgun at a deer standing 50 yards away is thinking he is likely to hit it with at least one of the pellets is probability. Shooting his gun at a deer 3 feet away ...well....he is predicting. That is why short-term trading is a more accurate form of prediction. And the probability also goes up. I can accurately predict Mickey will hit that deer 3 feet away UNLESS he is just a piss poor shooter. So I would give that deer a death probability that ranks very high on a probability scale and thus can also predict we will have deer for lunch tomm.......a double prediction! ROFLMAO
True, but that's not what is meant by "predicting the market" in this context. To be specific, successful traders don't let 'look-ahead bias' creep into their decision-making, they look only at what the market is doing now and let the market decide the outcome of any trade based on the rules of their system. Look-ahead bias is what blows up trading accounts.
LOL I do not agree. The reason traders blow up is they DO NOT look ahead. Successful traders have something or someone looking..anticipating...calculating..planning..maybe it is their rules but it is something. Otherwise, just throw their money at the market anytime..anywhere..like throwing a dart at a dart board. It is not very smart to not look ahead and plan in the markets and have contingencies. Why even have rules? Why even look at what the market is doing now? Just call up a broker and say i want 20 lots of the ES right now? Why look at charts? Why use Algos? Why try to determine the footprints institutions leave on the market (you do know they cannot hide don’t you?) The market doesn’t decide anything. It is not a living organism. It is a conglomeration of institutions..retail traders all trying to outwit each other and PROBING and to get a slice of the pie. There is constant probing of price by bulls and bears. One side will win for a while then the other. Fundamentals in the end determine where the market is going. Technicals determine the path it takes to get there. The HFT’s are playing tiny discrepancies and inefficiencies at a nano second environment exploiting PA at a level retail traders cannot. Oh yes..there is ALOT of planning and looking ahead ..anticipating ..looking for signs of pressures. Do you seriously think an institutions says lets just throw 10 million dollars at any stock or future sit back and see what happens? No...no..no.. the market is made up primarily of institutions probing..pushing...moving the markets. We retail traders with our potato chip and soft drink money do not move the markets. So...we best make haste and determine where they are taking it if we wish to ride along and make some more candy bar money. The market is comprised of institutions trading against each other. They are trying to take each others money. They care less about any rules I, or anyone else, invents or comes up with. Traders blow accounts because they have not yet developed the skill to read pressures in the market and assign probabilities to directional movement. And since direction is determined by which institutions are winning at the moment it behooves a trader try and see “what they are doing”. For instance, bullish institutions may be winning for a time until bearish institutions overwhelm them. That can happen anytime...at any moment...and cannot be known beforehand but since markets have inertia once they start a move it can be seen and exploited by the retail trader. Mechanical rules do not influence or dictate market movement. The technical route the market is going to take, to whatever fundamental destination it is going to, is created by constant probing and pushing of the institutions. They are trying to outsmart each other and take each other's money. We puny retail traders make up about 5% of the market. We don’t move diddly squat. And for the most part they aren’t out to get us..they are after the billions other institution have. The price patterns we see on charts are sign posts to what they are doing or what is happening between them. Say I see a symmetrical triangle. Bears and bulls are both pushing and probing and neither side is winning. But it simply cannot stay that way. Price will break out of that triangle. If bulls succeed it will break north. If bears succeed it will break south. I can accurately predict and declare with 100% certainty that the market IS NOT going to stay in that triangle pattern. IT WILL BREAK OUT. I PREDICT IT WILL AND I WILL BE CORRECT 100% of the time. IT IS NOT GOING TO STAY THERE. Once a BO happens ...say north bears will try and make that BO fail (that is one reason why we see PB’s on a chart). Pb’s are bears trying to make the BO fail. In this case bears are trying to make a BO fail and some scalping bulls are taking profit. Thus we see pb’s appear on the chart, in this case. There is nothing magical about these patterns. They are just the results of institutions probing, setting up, AND INITIATING movements Markets are uncertain because one can never know when an institution will jump in and push or when another will overwhelm the others. BUT when they do it will show up on a chart since charts are graphical pictures of the pressures at work in the markets. Once they get something moving it has inertia and tends to move in a direction until something else enters and stops it. That is how we get all our little saying such as “the trend is your friend until it ends” or “never sell a dull market in a bull trend”...etc. But in the midst of uncertainty edges can be found and exploited. INERTIA..INERTIA.. when markets start a directional move there is usually INERTIA. Many a trader has made rules...followed them to a “T” and gave up broke. Following rules won’t make a body a successful trader. Knowing or discerning where they are attempting to take the market and have the courage to act and place a bet will. Gauging...adapting...turning on a dime...flexibility...can help. It matters not what rules I have. The only thing that matters is following the market wherever it leads. And I can get a view as to where it is probably leading by gauging the pressure being exerted on it in the moment. And the chart shows those pressures. They cannot hide and move the markets at the same time. When they do something to move it then it WILL show up. Anyway not trying to be antagonistic but just presenting another way of looking at this.
Just because you haven’t apparently learned to read them doesn’t make your statement true..just saying.
A successful trader won't panic with sudden move, rather will trust his/her strategy and wait for SL to hit, on the other hand, a newbie, will panic by even a slightest opposite movement to the trade.