Perhaps you are taking my statement to an extreme that I never mean't. I will try to put it in more practical terms. Not philosophical terms. I know from experience that wedge tops in certain contexts usually have a reversal of sorts. Because of that belief, based on experience, i will place a trade "believing" that the probabilities of a reversal are higher than not. So, i take a position based on that information and "belief" if you wish to call it that. However, lets say there is no reversal instead there is a fast B.O. to the upside. I find myself in a quagmire. The market in this case is contradicting my belief. So i have to now make a new decision that I otherwise would not have to make. Will I continue in my belief and hold my position allowing my loss to compound or will i trade what I see the market doing? The proper thing ...at least for me...is i get out immediately because my belief about the wedge top in this particular instance was wrong. So I trade what IS. That is all i mean't by my statement. There are many beliefs, about many setups, in many contexts, but in the final analysis what counts, isn't my belief, but it is what the market actually does do. Many traders hold onto losses until they become unbearable because their belief about what "should" be happening doesn't agree with what IS happening but they deny the reality and hold onto a loss. I am not a philosopher but am just a pragmatic trader. That is all I mean't. Of course we trade on belief. But about 40 to 60 percent of the time the market will act in ways that contradict our beliefs. When that happen we have a new decision to make based upon reality taking place in front of our eyes. If the market is in a bull trend then IT IS regardless of any belief i may have that say it should be in a bear trend. Funny thing is i can show you an example of a market, on the same time frame, that is simultaneousley in a range..in a bull trend.. and also in a bear time all at the same time. It is like being on a road in the mountains...up and down...and on one particular stretch you would swear you are going uphill but stop put the car in neutral ...take your foot off the brakes ....and the car rolls backwards. Belief and perception often times contradict reality.
ES Journal - 2017/2018
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In a way what you say is true. However, i would word it different. I would say I am anticipating a market move in a certain direction by taking a position based upon a probable outcome which in turn based upon past experience that I have had myself or that has been taught to me from the experience of others in a similiar context. I used to use the word predict but traders seem to get all worked up in a frenzy bout that...declaring vehemently that no one can predict the market...so for me it is semantics. LOL. Truth be known we are all trying to predict the next move ...that is why..we use TA or whatever...but i soften my language as the word "predict" works traders up into a foaming lather and like a rabid dog and they can hear nothing else. Some actually declare the markets to be totally random. Imagine that! I probally just opened another can of worms.
Yes may be getting close ...ROFLMAO... but it is fun nevertheless!
Here is an example of what I mean. Here is a relentless bear trend full of wedge bottoms. I believe wedge bottoms offer an oportunity for reversals. I HAVE RULES rules I generally follow when i trade wedge bottoms. However, every reversal attempt here failed and what seemed like a reversal forthcoming ended up being a flag and then a continuation of the old bear trend. Markets can keep a trend much further than one can imagine or may believe. I could keep thinking that a reversal is imminent. However, going long at every wedge bottom on this chart would be a losing strategy. In such a case, i would scrap my belief about normal wedge bottoms and instead trade the flags ...going short as price nears the MA.
Hard pressed to disagree with most of what you say here.
One question though..how many failing wedge tops did it take (the belief) before you began trading bear flags (the IS)? And, how did you know with any reaasonable probability that the very next wedge top that formed below wouldn't work according to your experience (belief) to the contrary?
The trading what IS in this case seems to be lets throw some $ the other way though I have no reason within my rulz to do. You BELIEVED it would go lower despite your rulz to the contrary. You traded a competing albeit much weaker belief system selling bear flags in the face of those wedges.
I may be mistaken, Buy1 sticks to hiz rulzs no matter ...
nice entry!
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