To really be a great trader we have to get comfortable with being uncomfortable. We have to accept that no one has a crystal ball or time machine so the future is not known by anyone and we can only take our entries and manage our current risk. Successful trading comes from understanding the past psychological chart patterns and trends of markets made by traders reacting to their own fear and greed. The past is a map to the future but it is not a replica. As we move to the right hand side of our charts they do disappear into the unknown future and that is where we get compensated for taking on risk and trading against the new traders that make the wrong moves.
- We do not know if each trade is a winner or loser so we have to let the stop losses, trailing stops, and profit targets tell us when to exit.
- We have to take our entries and let the markets decide what happens next.
- The future does not exist so we have to trade the present moment price action.
- We have to accept that we do not know if the next trade will be a small loss, small profit, or a big profit. But we can make sure it is not a big loss.
- Since we do not know what will happen next we can not trade a huge position size.
- We have to accept that anything can happen at any time in the markets and we have to be ready to adjust to it.
- We should never risk more than 1% of trading capital on any one trade so the big unexpected move will not hurt us much.