Resumo de Trading In The Zone

Nothing in this world is predictable, thus this also applies to the financial markets. You may use sophisticated indicators, read up on piles of corporate news, or even watch the constellation to gain your edge. But the hard truth is that your ability to profit from the market does not depend on your predictive ability, butrather on your information processing ability. So in a way,we have an analogy of the traderbeing apassengerof a moving car facing the rear windshield. The driver/car is the market itself. It determines whichever direction it wants to go. The trader doesn't know what the driver is thinking, nor what the driver is seeing since the trader is only able to look what is behind the car.

Many things exist in the environment or on the roads that might affect the driver's route. Things like speed bumps, oil slicks, traffic jam, tree branches on the road, rainstorm are all examples of these 'obstacles'.
These obstacles can then affect the driver's mentality. For example, he may drive faster on an empty road or he may slow down during a thunderstorm. In addition, the driver might have different moods throughout his driving experience.

As the passenger, he can't see where the driver is 'going', but he knows where the driver has 'been'. All he can do is predict the future direction by the hints given in his viewpoint, which is the backside windshield. The environment and all its obstacles are all things that can affect the driver's route such as economic reports, political or social events, or just plain emotional trading. If we take that analogy, we can see how foolish it is trying to predict the market. The best chance we have as traders is to look at where the market (driver) has been and deduce from that future direction. If for example, the car is starting to turn and the road is curving, we know that the driver is entering a change in direction. If the the car is slowing down, speeds again, slows, then speeds again, we might say the driver may be in a traffic jam.Similarly, we must be able to look at previous prices to see where the future of the market may be heading. Price history act as clues just like the the environment that the passenger see in the backside windhield. Things like momentum, resistance and support provide clues to future market direction.

In conclusion, traders must quickly pick up the hints that the market is giving through its previous path and use sound trading logic to predict it's future movement. The logic may be organized into individual's trading system. Provided that he/she follows that logic consistently. So we can see how traders who trade emotionally with anger or greed, is similar to a passenger who is wrong in predicting the driver's movement and trying to seek 'revenge' at the market. Remember, the driver doesn't care what 'we' think, it just cares about where he's going.With patience, consistency, and logic, soon enough the driver and the passenger will be in sync with one another, and the path to success will be within grasp.

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