Limitations of our knowledge
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Thread: Limitations of our knowledge

  1. #1
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    Limitations of our knowledge

    I want to talk in this post about limitations of our knowledge.
    Show me two traders and ask them – where the price will go in medium term perspective? I will choose trader who recognizes that he doesn’t know the outcome. Professional traders don’t try to predict and even don’t pretend they are able to do that.

    The funny thing about trading is that most of the time it makes us collide with uncertainty. Imagine – how would you feel if you are stepping in the dark and felling some ground under your boots, but suddenly you lose that feel? That what trader often faces with – market conditions switch from one to another, edges stop working, volatility cyclically changes.

    Probably, one the hardest things in trading is to tolerate this uncertainty, recognize that you don’t understand anything, and go on observing markets. Then, some setup will appear from nowhere and you will feel some ground under your boots for a small period of time. This will be your window for opportunity – you may want to execute a trade in this case.

    So, probably, the most hardest thing is to know limitations of your knowledge (model, market understanding)

    For example, my trading style assumes that I should clearly see clues of strong momentum (demand or supply). Of course, market can go up without any clues, but I can trade-off only those situations that are visible to me.
    When I know limitations of my model, I would not feel any disappointment when missing some moves. Of course, I may want to explore – what was driving the market at the time this move has happened, but I haven’t seen any setups, so why I have to be frustrated?

    Bottom line:

    I would advice you to clearly know limitations of your trading model. For example – if you trade momentum, you can be careless about reversals (knowing where it may occur).
    There’s no way to anticipate everything. There’s huge amount of uncertainty – the more we accept it, the more patient and disciplined we can be.

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    Last edited by Value trader; 11-22-2013 at 07:12 PM.

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    yes this is true we should not try to predict what the market will do in the next few minutes because if we do then we might be making mistakes because the Forex market might not be doing what we want it to do for us as there are too much noise in the short term basis in the Forex market rather it is better to focus more on the long term .

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    Quote Originally Posted by HAMEDFX View Post
    yes this is true we should not try to predict what the market will do in the next few minutes because if we do then we might be making mistakes because the Forex market might not be doing what we want it to do for us as there are too much noise in the short term basis in the Forex market rather it is better to focus more on the long term .
    You can focus on short-term chart, but it's not about knowing what the market will do, but rather what you will do :)

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    There is no perfect traders, there is no best trading system too in forex, and with this, it is better for all of us to make trading based on the system that w have tested to be working for us. I will always suggest a trading of trend to the serious traders and the ones that can manage the account for much success to come.

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    as my basic at this business, i just do trading based on what i see and read, do reaction when there is an action in the market, and i took scalping is as my best trading system which is suitable with my style and i can enter some situation with easily, but it does not mean i have to trade without make analysis, make sure that i get my best moment before open position

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    Quote Originally Posted by silverlady View Post
    There is no perfect traders, there is no best trading system too in forex, and with this, it is better for all of us to make trading based on the system that w have tested to be working for us. I will always suggest a trading of trend to the serious traders and the ones that can manage the account for much success to come.
    True, there is no perfect man. Nonetheless we will have limitations and weaknesses. Therefore, do not ever stop to find out about news and knowledge that can provide benefits for the advancement of our careers. A forex trader is like a leaky bucket already filled with water, and the water will never be full even though it is repeatedly recharged.

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    Limitation of our knowledge.it is universal true.because all of us knowledge have limited.in forex trading it is same.because we don't know what is going on next few minute later.in forex market it is too imposible to know the market position.in here our knowledge in limited.but if you analysis the market all time then you can understand the position of market.then we can gauss the market position.but some time it can be fall in loss.because it can be changed any time.so i think it is difficult.in here our knowledge is limited.

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    Quote Originally Posted by newentry View Post
    as my basic at this business, i just do trading based on what i see and read, do reaction when there is an action in the market, and i took scalping is as my best trading system which is suitable with my style and i can enter some situation with easily, but it does not mean i have to trade without make analysis, make sure that i get my best moment before open position
    you are right,we should make of trade suitable with our style trading which suitable with our character,because with this way we can get success with more easy,i am trading with style of swing trading and use time frame daily because when i am trading with scalping so very hard for me for control my emotion and my greed so i often fail.

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    As it is, not trading system have all what you want in the market, this is the weakness of the indicator or the trading system, that is what you will have to work towards to get what you want to get from it. The market is not doing the things the traders foresees all the time too, it is good that you have plan and manage your trading account to perfect the weakness of the system you use.

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    I believe that forex is really a wide market and we all have some limitations of our knowledge ..some traders know to read market news well, but they cannot make a strategy according to it...there are other traders, who always make a good planning and strategy, but they are unable to follow it through our trading...they might get greedy and over trade..so all of us have some limitations ...

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