Probabilities

POSIBILITIES AND PROBABILITIES

 I believe we all understand the difference between probability and possibility, therefore I won't bother to explain it and will keep this series of thoughts as short and brief as possible. However, in trading, the majority of traders appear to be unaware of the distinction between these two words. 

If you pay attention, the world, or at least the majority of it, will pass you by, telling you about the infinite number of things that could happen. And trading is no different, despite the fact that there are only two possible directions, up or down, buy or sell.

 If you visit trading forums or communities, you'll quickly understand what I'm talking about. Everyone, absolutely everyone, will have an opinion on what is going to happen in the graphics. Likewise, everything is reduced to possible scenarios. 

 "It's possible that the price rises and falls in response to this resistance and then falls to such low levels that the trend continues, but, hey, the price will do what it has to do in the en". 

Phrases like the one you just read are very common, and the majority of people will analyze a graph with all of the possible scenarios before telling you that the price will take care of everything, and they're right; the price will take care of everything, because this business exists and will continue to exist with or without us. As I already stated, we are unimportant in a market (markets) worth thousands of billions of dollars.

With this blog, I hope to show you a new way of looking at and analyzing graphs from the perspective of probability, without getting caught up in the infinite number of things that could happen. Also, in order for you to be able to focus on the price and the present moment, if you can show me that you have done so, I will consider you satisfied, because the majority of traders and the vast amount of technical analysis information will tell you that you need to go back in time and see what the price did in order to predict what the price will do in the future.You won't need a doctorate in mathematics to understand it, because it doesn't need a lot of data and statistics to manage and understand something so simple. If trading was all about data, backtesting, and carpets and carpets full of statistics, then I couldn't be a trader. This is the closest thing to a "strategy" that they can get if they take the time to understand and analyze the data. 

  In the figure above, we can see a graph with horizontal lines that are neither supports nor resistances, nor are they (as many people call them) psychological prices, banking prices, or liquidity prices, or fulcrum levels, etc. If you know of any other names, please let me know. These are just plain price lines. 

The current price was or will be at one of these price levels in the past or future. When you're reading this, try to forget about all of the information you have in your head. Don't try to judge; just try to open your mind to something that is, at its core, simple.

 Returning to the graphic, we can see how the price has just dropped from 1.3200 to 1.3150.

 Taking this into account and focusing on the current price, the price in the future can only do two things, and these two scenarios are PROBABLE. 

 In the first scenario, the price will return to its previous level of 1.3200. 

 In the second scenario, the price will continue to rise until it reaches the price level of 1.3100.

 I'd like you to know that I'm not telling you that's what's going to happen. Simply said, I have no way of knowing what the price will actually do. I'm not telling you HOW it will happen (it's possible that the price could fall around 1.3200 and then continue to rise until it reaches 1.3100, or that it will fall near 1.3100 and then rapidly rise to 1.3200, or that it will remain in a range between those two price levels).

 As you can see, there are numerous scenarios to choose from. It's possible that he'll fall anywhere between those two prices, but he'll most likely do one of the two things. It's possible that a Shoulder Head Shoulder is formed, and the price is reversed. It's possible that one of your indicators warns you that the price is too high. But, in the end, it all adds up to the price doing one of the two things I mentioned earlier. If my intuition is correct, you'll be asking yourself in these moments how fuck#%$ this will help you "know" whether to buy or sell. But, who was it who scolded you and told you that Trading was about knowing something? 

Keep in mind that when it comes to graphics, we're all in the same boat: we're all in the same boat: we're all in the same boat: we're all in the same boat: we're all in the same boat: we're all in the same boat: we're all in the same boat: we're all in the same boat: we're all in the same boat: we' In the position of not having true information, not knowing what the price will do or how it will do it. To finish, I'd like you to read this sentence...

 "Losing by probabilities is more important in trading than losing by believing you know what you're doing".

 As a result, be aware of what you're doing and why you're doing it. You can put the price lines wherever you want them, every 20, every 50 pips, or perhaps you're familiar with psychological levels and like to use them. In the end, the price will only do two things. But, now that you've read this, tell me what you're going to do. Keep in mind that I'm not telling you how to operate, and I'm not telling you anything that doesn't have a logical foundation. Everything you've read thus far has led you to believe that this is the case, and if you devote yourself to understanding and internalizing it, you'll be able to operate and become profitable by following this logic. However, the vast amount of information available to you prevents you from focusing on the basics. If you always want more, you may believe that the more things you see or study, the more you will be able to "know." But, as I previously stated, trading is not about knowing something or, even worse, predicting what something would do. Trading entails being able to adjust to price fluctuations on a continuous basis and being able to self-regulate, i.e. knowing what we can control and what we can't. 

 Warm regards, and please feel free to contact me if you have any questions. Let's get this over with as soon as possible.