Quote on Certainty

Jan 11, 2008: 9:27 AM CST

I was reading Mark Douglas’ book Trading in the Zone and came across a most perplexing yet interesting quote I thought I should share.

In chapter 7, Douglas is discussing “The Trader’s Edge” and about certainty and writes the following:

“[Traders often] crave the sense of certainty that market analysis appears to give them.  The typical trader wants to be right on every trade.

The irony is that if [traders] completely accepted the fact that certainty doesn’t exist, he would create the certainty he craves –they would be absolutely certain that certainty doesn’t exist.

The point is that the market is not about certainty, and analysis is not about making you right.  The market and trading is about probabilities with uncertain outcomes.  Analysis cannot make you right, but it can provide you awareness to other opportunities or potential opportunities where the odds of one thing happening are greater than the opposite thing happening – this creates a temporary imbalance or opportunity which is defined as a “trade.”

That’s what this game is all about!

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