Trading is Not About Prediction

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Step 1: Break the financial matrix

If you think trading is hard, you’re right. It turns out that up to 80–90 percent of non-institutional traders (those who don’t work at financial institutions) lose money when trading . This high percentage has prompted regulators to force brokers to publish data about their clients’ losses on their own platforms. That’s why you’ll find the following language on the websites of countless investment companies: “Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider.”

These warnings don’t really solve the problem, and have been about as effective as GDPR cookie compliance (i.e. they have virtually no effect whatsoever). If anything, the broker is just fueling the potential client’s desire to beat the odds: “Are you one of the 21 percent?”

It is increasingly difficult for traders to beat the market due to the rise of “algo trading,” which virtually eliminates any chance for mere mortals to make money trading on a short-term basis.

It is also becoming increasingly difficult for traders to beat the market due to the rise of “algo trading” (the use of computer algorithms), a strategy that virtually eliminates any chance for mere mortals to make money trading on a short-term basis. If you have ever tried trading a company’s earnings the market will have moved before you had a chance to react (as the below graph demonstrates).

Day trading is now the least profitable way to trade, as only advanced supercomputers can now benefit from world news and company earnings. A trading floor no longer has 200+ sweaty middle-aged men throwing their hands up in the air like Hollywood wants you to believe; they have been replaced by machines implementing financial artificial intelligence, commonly known as FinTech.

So why do people still think day trading will make them rich? This can be explained by the fact that day trading is widely advertised as an effective strategy by the mainstream brokerage industry and financial media. Once it is shoved down retail traders’ throats, they cave in to the constant propaganda and lose money quickly by sticking to unprofitable strategies whilst utilizing the “education” offered by the brokers, which is code for “learn how to give me all your money in the fastest way possible.”

Day trading is now the least profitable way to trade, as only advanced supercomputers can now benefit from world news and company earnings.

The entire industry is based on suckering desperate individuals into a false narrative. They say it is easy to make money—all you have to do is trade on charts with no fundamentals and you’ll be sitting on a beach sipping a piña colada in no time. But let’s ask the obvious question here: If trading were that easy, why isn’t everybody doing it?

The truth is it’s almost impossible to make money if you are a retail trader; the small percentage of people who do succeed have had sufficient training and education. Realising you are stepping into a financial matrix where everything being thrown at you forces you to lose money instead of gain, is the first step required to making informed decisions.

Step 2: Learn how the “smart money” consistently predict the market

It’s important to understand that two herds exist in the financial markets: the dumb money and the smart money. “Dumb money” refers to nonprofessional investors, “smart money” to institutional investors who work at investment banks and hedge funds. These professional individuals use the same processes to create trade ideas and views on currencies, commodities, stocks, and bonds. Their strategies only differ from each other in terms of the assets they decide to trade.

Since the smart money are analysing the same data and following the same indicators, a smart money herd mentality is created. The internet allows outsiders to get a glimpse of that mentality—to predict what the smart money are doing and what position they may take on a certain asset.

Thread: prediction about market.

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prediction about market.

dear friends prediction about market needed experience and we can check through time frame and by this we buy or sell trade and patience is very important for trading also professional experience is necessary.

The following 2 users say Thank You to Majidkhan1044 for this useful post.

according to my point of view at its core productions markets are futures market. It’s based on a binary event where something other well are won’t happen. In the finance world, participants trade with contracts were the payoff will vary depending on the volume of a future even point productions market make the result of this future event tradable.

The following 2 users say Thank You to Noreen Sahil for this useful post.

dear friend, Prediction markets are exchange traded markets created for the purpose of trading the outcome of events. The markets prices can indicate what the crowd thinks the probability of the events is.

The Following User Says Thank You to sajawal khan niazi For This Useful Post:

Hello friends good morning and how are you guys I like your thread because main thing is market if we have knowledge about this then easily we can get experience and share the prediction of market some news are important which can predict the market so two things knowledge of chart analysis and information about international news you can easily predict the market

Sami503 trading journal

The Following User Says Thank You to Sami503 For This Useful Post:

Without mincing words, the best quality of a Forex trader is to be able to predict rightly any pairs to trade. We trade what we think and what we think springs from what we have seen the market done before. That is what we analyse in the market trends. Making a good use of the highest Timeframe called the MN will be of benefit for us.

In forex we pridict the future by analyzing the past of market, candlestick will always proven to be helpfull. We must know the behavior of market, sometimes we cannot decide where the market will go in that time you must wait for clear direction.

I think there are no procuring restrictions on Forex trading, we realize that Forex is a lot simpler from some other business everywhere throughout the existence where anybody from any nation effectively can make exchange here and can make enormous aggregate of benefit inside a brief time frame which is a lot simpler from some other business everywhere throughout the world.

The following 4 users say Thank You to joshi for this useful post.

Your trading business totally depends upon your prediction of the market if you are good in production of the market and you predict the right moment of the market then your trade will become a profitable one and if you are not able to predict the market in the right way then you can not make your trade profitable in a way that you can earn so much money from this business that’s why this business will not work for you so first of all make your prediction skill strong and accurate to make your every trait result in positive thanks

The Following User Says Thank You to Rameen For This Useful Post:

Yes dear but for proper analysis of the market we have to use resources of information about market which are:-
1. News
2. Experience trader,s tips
3. Articles of successful traders about trading
4. Forex Discussion groups
5. Social media

The following 2 users say Thank You to Patriotic khan for this useful post.

How are you dear friend, I do not think there’s anything wrong with that. First of all all banks or governments will not lose any goods. Brokers can make too much money from spreads and banks can earn from interest and the government will earn income from taxes. Merchants will not Withdraw money to where the money will remain in the market, have a cheerful life.

The Following User Says Thank You to shine For This Useful Post:

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Forex Forum mt5.com – Introduction.
Forex market is high-yield and risky mean of taking profit by operations with the currency rates. Instruments of work at Forex market in many ways determine the result of currency trading made by Forex market participants – brokers’ clients. Every Forex broker offers its own terminal, however the most part of brokers and traders concur in choosing MetaTrader 4 and MetaTrader 5 terminals. This forum is created for those who prefer the terminal of MetaTrader series in trading on Forex.

Forex Forum mt5.com – trade discussion.
Forex market forecasts, independent opinions of novice traders and experts of the currency market – all this you will find at the Forex-forum of trades discussion. Solid experience of work on Forex is preferable, but all comers including Forex-newbies may come and share their opinion as well. Mutual help and dialog – the main goal of communication at Forex-forum, devoted to trading.

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If you have negative or positive experience of work with Forex broker – share it at Forex Forum, related to the questions of Forex service quality. You can leave a comment about your broker telling about advantages or drawbacks of work at Forex with it. The aggregate traders’ reviews of brokers constitute a rating. In this rating you can see the leaders and outsiders of the Forex services market.

Free discussions at the Forex Forum mt5.com
You are a trader and want to relax? Then Forex Forum for free discussions is for you. There are no doubts that conversation on subjects close to Forex market is preferential. Here you will find jokes about traders, caricature of Forex brokers and full-rate Forex off top.

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We appreciate your choice of Forex forum mt5.com as a platform for communication.

After-Hours Trading — Everything You Need to Know

When it comes to trading, there is a lot to know, and one of the important topics is the trading time. What time is best? And during what time can you trade at all? When you are just starting, this is one of the topics that take a bit more time to learn about. Experienced traders do not hesitate to investigate the market and the asset they are about to trade before investing in it.

Of course, there is a difference among the instruments on the platform. Some markets are open 24\7. It means that you can trade them all week long without any limitations. It is convenient to trade markets that are open all day every day, like the crypto market. You can place deals there at any moment, including the weekends, too. Moreover, it is possible to close the deal whenever you like, without the need to wait.

However, with CFD assets, it is a bit different. Stocks are traded according to the market hours. Let us look at it a bit more closely and learn everything there is about trading time of stocks.

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Market hours

When the time comes to trade a certain CFD asset, you may open the traderoom and suddenly notice that the asset is closed. Why does it happen?

Each asset has its own trading time at which the market is open. If the market for a certain stock is closed, you will see the time left until opening in the traderoom:

This timeframe shows exactly how much time is left until you can trade the asset again. If you have an already open position on this asset, you will see it in your portfolio, however, it is not possible to close such deal until the market opens. You cannot sell or buy an asset that is not traded at the moment. However, as soon as this time is up, you are welcome to open new deals or close the ones you already have, if you wish so.

Besides checking in the traderoom, it is always possible to check the schedules, as they are available on the website. Let us have a closer look at the schedule.

Here you may find the information about trading time as well as overnight fees and spread.

Note that the schedule is according to the UTC +3 timezone. The schedule allows you to plan your trading strategy beforehand and take the trading time of assets into consideration.

You may decide how long you wish you leave your deals open for, count the overnight fees you will be charged and calculate the risks. If you prefer trading stocks, plan your trading in accordance to the market so that you are never caught off guard. However, if you notice that the asset is closed, but you still wish to trade it, there are options for you that we will talk about next.

After market trading

While the stock market is open at certain hours during business days, the value of the stock is still changing and fluctuating all the time. It happens as there is a certain company or business behind each stock. The company releases news and announces changes and it will immediately influence the intrinsic value of the stock. Some companies report earnings before the market opens or after it closes. Traders and investors want to access the market when the intrinsic value is changing and that is how the pre-market hours trading and after market trading are born.

Pre-market trading takes place approximately an hour before the stock market opens and the after hours are usually 2-3 hours after the market closes.

It is needless to say that it is specifically important to closely follow the news of a certain company which stocks you are trading. Even minor announcements can significantly influence the market, and that it is why it could be useful to focus the attention on 2-3 assets, rather then trading dozens of them without taking time to learn about the business.

As the trading type of IQ Option platform is CFD (contract for difference), traders invest making an expectation about price change and benefit from a correct prediction or lose if the prediction was incorrect. While the market is closed, it is not possible to trade the asset. However, there is a possibility to schedule a deal for it to open automatically once the market opens. Let us have a closer look at the way it works.

Market-on-open” feature

After the market closes, the after market trading takes place. How can traders of IQ Option benefit from it?

It is possible to schedule your deals exactly how you want them to open. There are two ways to place orders even when the market is closed. The first one is placing a “Market-on-open” order. It means that the deal will be opened once the market for this certain stock opens.
Let us look at an example:

The market for Apple will open approximately in 5 hours. Let us imagine that you are about to place a market-on-open order:

  1. By evaluating the stock’s previous performance and the news releases you need to decide whether the price of the asset will continue dropping or reverse and start rising once the market opens.
  2. Click “Buy” if you think that the price will rise or “Sell” if you estimate further decreasing of the price. Make sure that you have set it “at opening”.
  3. Once you have clicked “Buy” or “Sell”, a deferred order will be created. It will be triggered and executed as soon as the market opens.
  4. You can easily check all of your pending orders in the total portfolio.

This feature is useful for traders that want to enter deals immediately once the market opens. It is an extremely useful possibility, however, it can also be quite risky, as there are no quotes up until the moment of the market opening. Moreover, assets that are not traded during weekends can open at a drastically different price on Monday. Therefore all decisions are made according to your knowledge of the market. Once the market opens, it can also take time for the price to settle so your prediction has to be well-weighted.

“Purchase at..” feature

Our platform offers traders high flexibility, so the “market-on-open” feature is not the only one that can be used. Deferred orders are quite handy when it comes to after market trading. If you estimate a certain change in price and you wish to enter deals exactly at established levels, you can set the quote when opening a pending order. Let us see how it can be used.

To create a pending order that will be executed when the price reaches a certain quote, simply click on the “at opening” button and change the price to a certain level.

The pending order will be triggered and the deal will be opened as soon as the market opens and the price reaches your set level. This feature is useful as it allows you to control what level your deal will be opened at exactly.

How to evaluate stocks

As there are many possibilities for traders to place deals even when the market is closed, it is important to understand the asset that you are trading and gather as much data as possible before opening deals. On the platform you can find a useful feature that keeps all crucial data in one place.

When the market is closed, you have more time to make your decisions and it is wise to pay more attention to the information about the asset you invest in. On the platform you can use the “Market Analysis” tab to read about different assets, but you can also focus on the one that you are about to trade.

To see all the useful data in one place, click on the “Info” button near the asset name.

In the tab you will find everything you need to know in order to make an educated decision.

Here you will see the trader’s sentiment which reflects the percentage of traders choosing one or another direction, as well as market news about the specific stock you have chosen, earnings calendar and trading conditions. The trading schedule can also be found there, for your convenience.

Trading stocks can be rewarding, however, there is a lot to take into consideration before you start. You may use the practice account to see how the overnight fees are applied and test different investment amounts. Moreover, the practice account is a good place to exercise placing deferred orders during the after market hours.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.

GENERAL RISK WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
87% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Quick Lesson — What Most New traders Don’t Get About Probabilities

As I sit back and reflect on my journey as a trader, where I was and where I am today, I can clearly point out the things I didn’t get right at first. For instance, one of the fundamental lessons that I’ve learned and come to accept is that certainty in the market is an illusion.

The analyses, all they tell you is that something is likely to happen. But likely, doesn’t mean a sure thing.

Here’s an analogy that is often used: If I flip a coin that’s slightly more weighted on the tails side, I know how the outcome will shape up in the long-run. (overall it’ll land more on the tails side). But in the short-term, there will be a lot of noise – the coin will land on both heads and tails, often in streaks.

If you haven’t noticed, that’s precisely what trading is, and that’s why strategic money management is paramount! No matter how extraordinary your market edge is, if you place all your hopes and dreams on any individual trade and start betting the farm, at some point, you are going to be disappointed.

Now, this ‘not knowing how things will turn out in the short term’ has led many traders (even seasoned ones) to fear the term ‘prediction,’ or, ‘forecasting.’ My take on this is this: the moment you place a trade with a directional bias, you are, in effect, predicting/forecasting/anticipating.

The human brain is a fascinating “device” that’s really good at that, though it might not seem like it. Our thoughts are regurgitations of past events/experiences/reactions streamed into our mind in the present. Our brain does that because it’s constantly attempting to use those experiences in some way –consciously or unconsciously — to predict the future (which also appears as thoughts).

  • You don’t put your hand on a hot stove because your mind predicts that if you do it, you will get hurt (based on past learnings.)
  • You pack a snack before heading to work, even though you’re not hungry because your mind predicts that later in the day, you’ll get hungry.
  • When driving, you put your seatbelt on in anticipation of some future unfortunate event.

As you see, we do predictions/ forecasting/ anticipations all the time, and stacking trading and “I don’t do predictions, I just react” in one sentence is just nonsensical. Reaction is prediction.

Really, it’s not predicting/forecasting that’s an issue. It’s our expectations that are not aligned with some basic probabilistic facts.

  • The sun will rise tomorrow. This is not an absolute certainty. But based on what we know about science and the laws that govern this universe, this is a very (very) high probability. And so, having a high expectation that the sun will rise tomorrow wouldn’t be out of line.
  • You won’t win the lottery in your lifetime. Your odds of winning the Mega Millions jackpot are 1 in more than 302 million. Having a high expectation that you will win it someday is just a very poor allocation of your brain resources.
  • If you live in the U.S.A, you won’t die of Malaria. Again, basic probabilistic fact. Now, if you live in Africa, the likelihood of you contracting the disease goes up a bit. And the closer you live to the regions that are affected, the higher the possibility of you contracting it.

So you see, everything about our lives is a matter of probability — at the macro level, at the micro level — existence itself is a game of probability. And what plagues the typical trader is a poor understanding of his probabilities in trading.

The reason…

We usually have high degrees of control in many areas of our lives – in the material world.

  • You need something to eat? Just head to the grocery store.
  • Inconvenient weather conditions? Cover yourself. Take an umbrella.
  • Don’t like a particular tv program? Change the channel.

The problem arises when we expect the same in trading. We’re so used to controlling things in our daily lives with high degrees successes (because the probability of successfully doing so is high) so, when we come into trading, we bring in that same kind of mindless expectation.

We place a trade, and then we expect a specific outcome. And we feel like we have to control the trade, tweak it, and constantly check it in order to make the outcome materialize as we would want it to be. But when it doesn’t happen, we feel bad; we have a hard time accepting it.

Prediction exists on a continuum ranging from low probability to high probability. And the thing with trading is that your probability of success in the short run will never be as high as it can appear to be in other areas of life. It’s just a fact. There is a lot of noise. (winners and losers come in streaks.) Chance plays a big role in this game. And it’s just something you have to learn to accept.

The true meaning of acceptance

Acceptance is the act of ‘being at peace with.’ It’s about embracing. Acceptance literally means ‘taking what is offered’. It doesn’t mean just gritting your teeth and bearing the outcome. No, it means fully opening yourself to your present reality—acknowledging how it is, right here and now, and letting go of any internal struggle.

But what if you want an outstanding trading performance and not just ‘accept it as it is’? Well, that’s the paradox: The more you accept the outcomes of your trades without resisting; the more you keep placing other trades irrespective of how your past trades made you feel, well, the more you’re letting the probabilities work their magic without interference. And the more your performance improves.

So if you can learn to understand, accept, and appreciate your probabilities, your actions will be far more effective since all the time and energy that you waste on struggling with thoughts and feelings will be invested in taking action—the right kind of action.

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