Why Pray Over A Trade?

By @ibtimes on

“God does not play dice.” – Albert Einstein

Hello:

Higher accuracy and correct entries can’t help your trading if you don’t let your profits run and cut your losses. This secret totally de-emphasizes right entry or accuracy and instead requires that you focus on the most important aspects of trading – risk/money management and letting your profits run.

This kind of trading approach is very helpful. It’s one thing to read about booby traps that traders create by emphasizing higher probabilities and the gambler’s fallacy, or to read that random number series can contain protracted winning and losing streaks. The knowledge of how the market really works drives home the lessons about discipline, systems, and expectancy. This helps reinforce the idea that, no matter the trading system and analysis you use, you’ll get the same probability distribution as everybody else, and that your trading plan will need to address the fact thru money/risk management, trading rules, etc

This also helps change the way trading activity is framed because of the focus on systems results which strips away entries, setups and other false control illusions that traders inevitably get wrapped in. The opportunity to view a trading system as the random distribution of hundreds or thousands of independent trials can change one’s view about one’s ability to ‘predict the markets,’ and focusing on maximizing system outcomes can give one a fresh perspective on trading.

Realize, though, that no matter how much you’d want, you can’t control the market, nor can you manipulate the future uncertainties. You’ve to deal with the emotion of self-pity whenever you suffer losses. One trader explains: “I felt guilty for being in a wrong direction whenever a trade went against me. But I came to realize that it’s ridiculous to feel that way. There can’t be a way of making sure that a newly placed trade doesn’t go negative at all. Profits and losses are just normal part of any business. So accept the fact that you’re not perfect. Dwelling upon all kinds of “if onlys” won’t change anything, but it may have an adverse effect on your overall trading performance.

Profits and losses come to every trader – professional and novice. Every successful trader now realized in the past that there was no point in hanging onto a losing position.

Some people deceive themselves by thinking that praying before a trade can enable to make right decisions always. I’ve seen those who blew their accounts despite this belief. I always shake my head when I see a soccer team praying before a crucial match, only to be beaten by their opponents who don’t pray. If I prayed for the EURUSD to go bearish because I’d sold, what’d happen if another serious-minded trader prayed for the same pair to go bullish because he’d bought? Whose prayer should God answer? This shows the senselessness of praying before a game or a trade. This kind of mindset didn’t help me at all during my novice years. I believe in prayers, but I also believe that God doesn’t play dice.

There’s a set of golden rules that work for every game under heaven. While adherence to golden rules doesn’t make us win always, it makes us survive constantly no matter what. God won’t do for you what He knows you can do yourself. It’s your duty to reduce your risk significantly, set your Stops, cut your losses, and run your profits. If you do what are contrary to this, you’ll bear the consequences no matter what/who you are, and no matter what/whom you believe.

NB: Please watch out for my coming articles titled: Worst-case Scenarios, Analysis Paralysis, Effective Swing Trading and Advanced Gap Trading.

This article is thus ended with quotes from Peter Devaere:

1. “There’s no doubt that anyone can get a sense of the market – provided they practise long enough”

2. “Traders know that they’re the only administrators of their accounts and there’s a rather random distribution of profit and loss trades. Their task is to exercise strict discipline in order to easily work the balance between the two to their advantage. That’s all that’s needed.”

3. “The stop should be regarded as protection to your capital and not as an integral part of your strategy.”

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

©2011 FX Instructor Forex Blog - For Traders, By Traders. All Rights Reserved.

.

Join the Discussion