Do You Really Think That You Have Predicted The Market Movement?

If you had been long in this game, you’ll see people trying to time the market in a very short term, they try to predict the market movement. What’s hard? It’s just 50% probability because, in short term, no one actually knows where the market will go and how long it will sustain in a trend.

Timing the market is possible, but trying to predict where it goes is just absurd. The worse thing is when someone predicted correctly, they might think they’re smart. Then they’ll try to outsmart the market, that’s when they blow up their account.

History repeats itself, it’s not what happen last time will happen the same scenario this time, the history is implying the people who try to predict. People always try to predict because they want to find certainty out of this uncertainty game, it’s a worthless endeavor.

When you go in the too short term, you’ll be blinded by the gambling instinct. You’ll start having egos subconsciously without your conscience. When an expectation is not achieved, you will have disappointment that leads to more emotional mistakes. Sooner or later, the emotional mind will start clouding the judgment mind.

Being correct in the market isn’t hard, it’s just a 50% probability, it either goes up or goes down. If it goes down, you delete your post, that’s what the “Gurus” in Twitter does.

Many will start bringing out their result in any year showing people a high percentage of gain achieved. Triple-digit return is impressive, but have you asked yourself about the market environment? In a bullish market, even a monkey can earn tons of money by throwing darts on choosing stocks.

The real professionals are the people who survived through bearish sentiment when your trade strategy is not performing well. In summary of the whole game, it’s just about knowing your own trading strategy and its strength and weakness. So you can avoid being large during periods of your trading strategy’s weakness.

While on the other hand, amateurs just trade anything without a consistent approach or a principle in their trading strategy. They’ll blow up badly in a bad market without realizing that their approach may not be advantageous in that environment, but they resist. That’s what we called revenge trading.

The market is a feedback mechanism if you trade correctly with your entry point and stop-loss. You will clearly know the health of the market only after it happens. While many try to predict ahead what will happen. Sure, you’ll be right but it’s just 50 50, what’s the purpose. It’s just typical trying to outsmart the market.

So the purpose of this article is to wake up those who think they actually predicted the market with high certainty. Think about a coin toss, even with a 50 50 chance, you’ll get as high as 90~100% head for a streak, but if you tossed millions of times, mathematically it will go to the optimal point of 50%.

In summary, understanding the nature of the stock market is crucial, the legendary traders had laid out all the fundamentals of the stock market. The market cannot be predicted in the very short term but can be timed. People often get confused with this. Predicting means you’re doing what you think might happen ahead, while timing means to follow what the market feedback.