‘You know nothin’ Jon Snow.’

I would like to address a very important subject that gets very easily overlooked by a lot of traders when they trade. They would do a lot of meticulous research, establish a plan of attack, execute the trade: Lose, and end up saying something like, ‘I don’t get it, the stock was supposed to go in my favour.’. Then they go on a rant listing all the fundamental reasons of why the stock should’ve gone their way; OR, they would win and say, ‘I KNEW it! Tadaaa!’. Whether they win or lose, there lies a bigger problem that could be detrimental in their path to trading success in the future. They enduldge themselves in thinking they know what the market suppose to do.

Let’s revisit and understand what the market is. The market is comprised of everyone around the world making a decision on a sentiment of some specific stock of a company, in turn they each make their own decision in whether they want to buy, or sell a certain stock. And even if by some miracle of a chance that the whole world decides to say ‘buy’, how will the stock price move if there are no sellers? Who are we gonna buy from?! There will always be buyers and sellers at any given point in time in order for price action to take place.

Now that we have the established that there is always this uncertainty in the market, and that we can NEVER know what the market wants to do, let’s look at what we actually can know when we trade, what we actually can control. As traders, we can:

1. We can know exactly what set up we are looking for, and what it looks like when it presents it self in the chart.

2. We can know exactly when we take an entry in a trade.

3. We can know exactly how much we are willing to risk in order to test out our trade thesis.

4. We can know exactly when we take our profits out of the trade when the stock moves in our favour.

That’s it! Once we start venturing into thinking that we know what the market is going to do, we will be in big trouble.  And if anyone ever tells us that they know what the market is about to do(which is absolutely absurd), we can confidently look them in the eye and tell them, ‘You know nothin’ Jon Snow!’

Note that after reading this, one should start applying this very concept of
differentiating the certainty and uncertainty in their market plan as well. By doing so, it would help let the trader look at the bigger picture when they make a plan, take their own opinion out when they are trying to establish a bias. That is what helps me make perfect trades and perfect calls in the past. By understanding what I know doesn’t matter. I only act upon what the chart information tells me.