Now when it comes to trading listening to other people’s opinion isn’t the best idea and in this article, I’m going to explain why.
So its fair to say that in most walks of life at certain times we find ourselves asking for other people’s opinion to either get input, perspective or some form of confirmation bias. Now that at times in different situations can be helpful, however in trading more often than not it’s not especially when you are already involved in a trade.
I believe when it comes to trading you should be confident enough in your own skill sets, abilities and trade plan that you don’t actively seek outside opinion to give you added confidence for why you want to get involved in a trade or why you are involved in a trade. I have found that when people ask me what they should do next when they are already involved in a trade tells me that they shouldn’t be involved in the markets at all.
Why? Because they lack the confidence or reason to know what they should do next for the best and ask for my opinion to give them guidance what they should do or should be doing.
The best way to become successful is to become independent. Now you only become fully independent when you have confidence in your own skill set, abilities and trust the process you are using to trade the markets with. Once you have become fully independent that is when you won’t actively seek outside opinion or confirmation and it actually provides fulfilment in your trading journey.
So why don’t I like giving my opinion to other traders when they are involved in a trade or like the fact that other traders seek opinion to justify why they are involved in a trade and seek confirmation? Simple, because not one single person knows what the market will do next!
What people fail to realise in trading is that 100% certainty does not exist but when you ask for other people’s opinion that is what you are actively seeking consciously or unconsciously.
Even when you ask someone what might happen next, the person you are asking doesn’t know for certain. That person can make a high probable guess but that is as far as it goes.
I can appreciate the fact that you might find more confidence in your analysis for a trade setup when someone else you know is also looking at something similar or actively involved but it should not dictate what you do next in your own trading.
The only opinion that matters in your trading is your trading plan! It is your trading plan that will tell you what you should do next, what side of the market you need to be on and so on. Your entry reasons should be the reasons for why you are actively involved in a trade, actively monitoring or waiting for a setup to develop.
If you are actively seeking other traders’ reasons for why they are involved in a trade or looking to get involved and you take them reasons to justify your own actions, then you have more work to develop your own trade plan. What causes traders to seek outside opinion is because they lack one thing… EXPECTATION!
When you lack the power of expectation in your trading then you will look for some extra confirmation somewhere else because you don’t trust the process you are using to trade the markets with.
So how do we gain expectation…through back testing our trade plan using historic data. We then collect that data to find specific outcomes to certain variables.
These are the variables you will need to collect data for;
· Losing streak
· Winning streak
· Maximum drawdown
· Maximum ROI (Return On Investment).
Once you know the answers to these specific variables and you know by following your trade plan the end result is a positive result i.e. positive ROI then you have gained the power of expectancy. When you have accomplished this then you will attain a new level of confidence in your trading journey as you will completely trust the process in both the short term and long term as you have both historic and visible proof that what you are doing will bring positive results.
At that point you will not seek validation or confirmation from someone else to justify your actions in the markets as your justification is if you followed your trade plan correctly.
Taking this one step further you will gain a new level of clarity in your trading. When someone happens to give their opinion on your analysis or attempts to tell you why you are wrong you can disregard the comment made because you are following a proven process that yields positive results. Now of course the comment might make you aware of something you weren’t before but what matters most is what does your trade plan tell you? Your trade plan is more than a series of instructions, it’s the voice of reason and that one thing you can turn to at any given moment to remind you that what you are doing will bring positive results which you seek.
Now in my opinion I would heavily advise not go to online chat forums because they are often filled with fairly new or unexperienced traders who again are there to prove why they are right or for others to seek confirmation to justify their trading.
Before I bring this week’s article to a close, I would like to remind you that not one person is ever 100% certain that the market will do next, not me, someone on the internet or even the most profitable trader on earth. Some individuals may believe they are 100% certain but that is not certainty its arrogance and at some point, the market will humble that individual.
Trading is a long term of edge and probabilities and remember the only opinion that matters isn’t yours, mine or a guru/expert online it is your trade plan! Your plan is the only thing that will guide you towards success and if you follow it correctly and it proves to have a positive expectancy it will do just that! Your only job at that point is to trust it and execute it.
I hope you enjoyed this read,
Kind regards H.