When trading, investors always ask themselves-what should I do to pull 100% profits all the time? Why there is no holy grail-indicator, method or a system which almost guarantees profits whenever you log into your trading software. All the knowledge and skills gained from the experience do not provide surety of garnering profit.

Amongst all the reasons that one can provide, the following two envelopes the entire probable answers.

• You can’t predict the future

The age-old cliché stating-future is uncertain, holds true in any profession or environment. Is there anyway that one foresaw the Economic Crisis of 2008 or the Japanese Earthquake in 2011 or when will the next natural disaster like an earthquake or tsunamis befall upon us? The list of unforeseen market moving catalysts is infinite and when they happen, they will shake the markets and the environment in which you reside. Understanding that such novelties is part and parcel of trading and the best you can do is be prepared. Having a contingency plan in place in case of such events is the best way to react to such situations in the future. In today’s world of unforeseen happenings, be ready to have your world rocked and not exactly the way you think it means (excuse the pun). 

• Data doesn’t move the market. Humans Do

This point will surely make some eyebrows raised. But this is true. There are times when data or market news do not mesh with price action. Traders ask the question-why is that? After all, this is what we are exactly taught in our orientation classes. To these people I would ask the following questions-Maybe the outcome was priced ahead of time? Maybe traders weren’t focused on the data that was released? Would all the players in the market react to an unforeseen catalyst the same way? Whatever the price behavior be, the decision that leads a trader to take action aren’t always logical to the information out there. When you multiply this by the millions of traders with different strategies and different sized trading accounts, it becomes impossible to tell where the overall market will go every single time.

No mathematician or in that matter, an extra-ordinary human being can quantify or calculate human behavior and unknown future events into an elegant mathematical equation to completely get rid of risk arising from it. Perfectionists should probably stay away from the market since the markets will avert away from the so-called perfect predictions.

So the theme from this blog is that nobody can perfectly predict the market every single time. If a person says he can- he is either a magnified living figure of god or he is just giving you reasons to have a laugh at. All hope is not lost though if you decide to stubbornly not listen and continue your search for the Holy Grail!