Just a moment before these words began appearing on my screen, I sat here in my big black chair. My fingers rested lightly on my keyboard. My thoughts drifted from here to there and then back to here, which at that moment was a blank page. The “there” was the market, the place my thoughts go five days a week. Often, though, on the other two days, folks make a statement about the market or they ask me a question about the market.
Often the statement about the market is factually incorrect (the breathless media, you know). Sometimes I offer a gentle correction, but most of the time I just listen, as I have found that once people think they know something, moving them from that place is not worth the effort, as the effort usually fails.
But when they ask me a question about the market, my response is quite different. I offer my thinking quite freely. This then was my thought this morning, “Why do I feel so free about offering my thinking on the market?”
Right now, as I write, I am still wondering this. To my left is a large computer screen and on that screen is data, lots of data. I can see all of the US indices, market news, and specific information about my ongoing trades. Currently, the green and red colors shift about as the market moves back and forth between positive and negative. Watching the shifting, it is clear to me I have no idea what the market will do today, or tomorrow for that matter. So why then do I feel my thinking on the market has any value for anyone?
Now, as all these black letters appear on the white page, my thinking about my question clarifies. The tiny black letters form larger words, and the larger words form strings of words, and those strung out words shape my thinking into defined thoughts. One of those thoughts is specific – I offer my thinking on the market because I believe my thoughts have merit. I believe what I think; therefore, I speak with confidence about what I think.
Reading all of these tiny black letters now formed into big blocks of ponderings, I understand two more things, and both of them might be helpful to you as a market player.
The first regards the issue of confidence. The market is a fickle creature. Watching the green and red shift about these days confirms that. To go into that wildness with hard-earned money requires confidence. One must act with resolution and resolution requires that you believe in what you think.
Yet, confidence and resolution will not get you to success. You also need a solid thinking process, a process that takes the smallest bits of data and then forms that information into larger thoughts, and, ultimately, conclusions. It is those conclusions that you must have faith in; you must believe that what you know is based on the best of your ability to know it.
Now, here comes the part that causes me some doubt and, more than likely, does for you as well. No matter how confident we are in what we think, sometimes our thinking is wrong. We choose a course of action that, simply put, loses money.
Given this reality, the question becomes this: do we forgo our confidence because we sometimes draw bad conclusions? The answer is clearly no, which brings me back again to my thought earlier in this piece – Why do I feel so free about offering my thinking on the market?
There is value for me, and anyone else who wishes to understand more about the market, because of the work that I do. Five days a week, I watch market data flow about on my computer screen. Five days a week that data and all the other data I pick up in my reading and listening supports my belief that I understand the market. I understand how it works, the various forces that drive it, and the reality that no matter what I think I know the market is not bound to conform to what it should do.
In that last thought is an important understanding. Because the market is not bound to conform to what is “rational” in my mind, I will err when selecting trades. It does not matter how “well thought out” my plan, the market can and does foil that simply because it is not bound to what it “should do.”
Yet, despite this clarity of thought, I still go into the wildness with my hard-earned money. Why? Because I am right way more than I am wrong, and that is the ultimate goal of traders and investors – win way more than you lose.
So, reading this, I see how I arrived here. I see all the words, the sentences, and the paragraphs and my wondering has ceased. I get it – people probably find it hard to move me from my thinking, as that effort usually fails.
Trade in the day; Invest in your life …
