A few beliefs I have noticed many successful traders have in common:
They believe all behavior is patterned. We might not always know what pattern is being followed or if actions are completely held back, but what we do know is that the human brain seeks comfort, and comfort lies in patterns. In trading, behavior is limited to trading actions, which can be displayed on a chart. The art of revealing patterns in trading is called technical analysis, and it works precisely because trading is a form of behavior and all behavior is patterned. What doesn’t follow though is knowledge of what patterns are being followed, when and why or even what patterns actually exist. In principle though, traders believe these questions are answerable.
Traders are empiricists. They have to be because trading by definition is an empirical activity, which means the beliefs we form regarding, for example price predictions, are corrected by observable events occurring outside our control. Our beliefs are corrected by reality, sometimes very rapidly, and good traders embrace this. Traders can disagree on if a coin pump is based on speculation or a rise in value, but never on whether the pump actually occurred. The ones who predicted a pump correctly gained and the ones who didn’t, lost. Inflated valuations don’t last long and this is a blessing. In other, less empirical, fields people can invest their whole lives into constructing thought structures without ever knowing if they are true or just sound plausible.
They believe in luck. Although future human behavior will follow patterns established in the past, we always lack some information required for making predictions with 100% accuracy. Actually, we don’t even know what relevant information we lack and if we somehow had all the relevant knowledge, we would lack the capacity to process it. This is why trading is probabilistic. Traders know that their success is always partly based on luck and this cultivates a humility in many of them. Therefore, they often donate to charities and feel an obligation to help out those who are less well off.
There are a more beliefs good traders hold, let me know in case you found this interesting and want continuation.
Well written
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