Lack of inevitability leads to false expectations in trading

We all know the automatic/logical sequence of everyday events in our lives. There are if/then-relationships, which always lead to a predictable, inevitable result.

But in stock market trading this is not so - there is no logic that determines the result in advance. There is no predictable and inevitable sequence of movement patterns. Something will always happen, but when and how exactly it will happen is not predictable (although there are procedures in technical analysis that make it appear so).

Some examples of normal (but inappropriate) expectations in trading:

• a stock must rise when there is good company news or fall when there is bad news.
• the market has already fallen deeply, now there must finally be a recovery
• yesterday's daily low is broken, the price will continue to fall
• a significant resistance is broken and now there must be a greater upward movement
• the price has fallen below the 200 moving average, now further strong sales will follow
• the price level is so significant (like an all-time high) that there must be a reaction now
• my indicator shows a longer lasting negative divergence, the course must now fall

This enumeration can be continued at will. There are so many events in trading, where the behaviour is not based on logical conclusions. It simply does not show the expected theoretical price behaviour. Of course every reaction can be limited to the three possible directions of movement (rise, fall or somehow go sideways). But is this really always considered?

Such compelling expectations - i.e. ultimately unreasonable expectations in trading - are the reason for inappropriate trading. This in turn leads to prematurely opened positions in expectation of a supposedly logical reaction. Or even an insistence on one's expectation or opinion, even if the market shows that it is obviously wrong by repeatedly stopping out. If then a wrong position size is added, losses are preprogrammed. And these unfulfilled expectations in turn cause emotions that will continue to affect your behavior in the future, such as anger, pain, uncertainty, fear.

As a trader, you start out on a journey that ultimately leads to a trading niche or the edge that suits you, which in turn leads to a lead in the market and ultimately results in constant profits. If one sees this advantage, one acts - if one does not see it, one does not act. If you have this trust in yourself, unconscious and inappropriate expectations will no longer take over the dominant role. One can then read the market like a book and follow the flow of the movement when it begins - or not, when nothing happens.

At the beginning of a trading career, this almost intuitive behavior is impossible because you simply haven't gained enough experience to find the trading style that suits you.

However, if you are aware of the non-existent logic of price movements and can adjust your expectations with regard to an inevitable sequence of movement patterns, you are already one step ahead.

Experience and your own principles for trading are necessary to internalize the otherness of the market. Here are mine for this:

• The market determines when a movement begins or ends and also determines its extent. In this respect every movement is uncertain.
• The market does not know my thoughts and wishes as a trader and therefore cannot fulfill them. And it doesn't care about them either, because it develops unpredictably according to the expectations and actions of all market participants.
• I am impartial and neutral towards any development. I accept every movement of the market, no matter how absurd or unusual it seems - and adjust my trading accordingly. By thinking through different scenarios for the course of the price I am prepared for it.
• I know my edge and act accordingly when I see a movement that fits.

Of course, certain movement directions are more likely than others due to the prevailing trend structure, but still nothing is predetermined. In this respect, anything or nothing can happen at any time.

You have to create awareness of this yourself if you want to become a successful trader. The first step is the constant comparison between your own expectations and the actual market situation.