Trading with Probability: Follow the System, Not Predictions
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Everyone knows that trading is a game of probabilities, but how many traders actually approach it that way? People love making predictions because it gives them a sense of pride and satisfaction when they’re right. However, when their predictions fail, they feel disappointed or frustrated and start searching for reasons behind their failure. But the truth is, the reasons for being wrong are just as relevant as the reasons for being right.
Successful trading requires a solid trading system with a positive expectancy. The real key to success lies in position sizing, consistency, and maintaining an unbiased perspective. Traders should execute both long and short signals without hesitation, as they cannot outthink the system. Proper position sizing allows for stress-free execution, while a larger sample size helps assess the system’s efficiency.
It is challenging to suppress overthinking and simply execute trades, as our brain is naturally wired to analyze. However, there is no other way to survive in the markets. Accept the probabilistic nature of trading, respect it, and avoid making predictions—just follow the system.
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Sir, that is ok, but what actually happened in the past 8 months - 1 year. Even with a very big noise mute, like as high as 5% Renko Weekly, has given breakout failures.
Just like how rising tide lifts all boats, Tsunami sinks the best built ships.
It was just a bad time.
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If you are talking about the Long trades, yes. It has been a bad 8 months. I have exited 2/3rd of my stocks as the exits triggered on 3%. But that's a market phase and you cant do anything else than following your rules. This period was the best for shorting the stocks or going long on Gold,Currency,Bonds etc. But we have to take the trades accordingly. If you see the data rationally, you would find opportunity in different asset classes. We as traders should always have a system for every asset class or at least do both long and short in the equity marktets.
