The forex market has always been uncertain; which is why it is very important to ensure that you’ll be able to adjust your strategies. Moreover, staying profitable for a long time would require you to be flexible to the ever-changing conditions of the market. So think about this…
Casino and Trading
Casinos earn a lot of money every day, despite the fact that they couldn’t predict which player is a noob or who will be able to hit the jackpot at slot machines. Why do you think it’s possible? Shouldn’t non-random outcomes result to consistent income? If this is the case, shouldn’t random outcomes result to inconsistent profits?
The reason why casinos can bring in profits consistently is that they know that every game, the casino has an “edge” over the players. They understood that in the long run, probable outcomes may generate consistent and predictable results.
Much like a casino, traders are in the business to be consistent and to make money in a random work environment. You need to think of probabilities; however, this is easier said than done.
At this level, you need to understand and accept that trading is uncertain and unpredictable. Take for example, the casino game blackjack. When playing, you never really know the cards you’re dealt with, nor will you know the hand of each player. However, there are still people who make money playing the game. Why? Because they understand that each hand is independent of every other hand over time. If they follow a basic strategy, they may be able to decrease the edge of the house and make a small profit.
That is also true for trading. We need to understand that a trade is independent from every other trade. Winning or losing previous trades doesn’t affect your next trade. When you are able to accept this, you can trade without getting affected by its outcome.
You need to understand that in the long run, the probability of profit/loss is certain and predictable. This depends on the constant variables that are known beforehand and within your control. As soon as you understand the independence of every trade and actually believe that the odds will play themselves out, it would be easier for you to remove emotions from your trades.
The bottom line is that profitable traders never really rely on luck. They rely more on their understanding of a system that works.