As we approach crucial(?) points of price levels for our beloved ponzi coins, here are a few things to know:

Your favorite traders and analysts that trade with indicators or price action have different opinions on whether we bounce from here or we just go goblin town. 

And usually, CT would crucify traders that have adopted a wrong bias of the market and brand them as bad traders / larps. This is something very common when a sound bias / good trade idea fails. This is called resulting.

Resulting, according to Annie Duke, is drawing an overly tight relationship between results and decision quality. In simple words, good outcome = good decision and bad outcome = bad decision. 

However, we can make good decisions and have bad outcomes. Similarly, we can make bad decisions and still have good outcomes. 

This makes us prone to hindsight bias.  Hindsight bias is the tendency, after an outcome is known, to see the outcome as
having been inevitable. When we say, “I should have known that would happen,” or, “I should have seen it coming,” we are succumbing to hindsight bias.

When a trade goes wrong, we then realize why we shouldn't have taken the trade in the first place. But when a trade goes to reach take profit, we simply attribute it to skill. Hindsight bias is directly opposed to probabilistic thinking.

What is probabilistic thinking? Probabilistic thinking involves us considering probabilities when dealing with uncertain situations (esp in the field of trading). We acknowledge that it is in our best interest to let keep on playing high-probability setups. 

They may fail and even have a losing streak but in the long run, the probabilities will be in our favor? We have to keep on trading. Just because you have a 50% win rate does not mean that in 10 trades, you will get 5 winners and 5 losers.

Get a coin right now. What is the probability of landing heads? 50% right? So now toss the coin 10 times, what did u get? Probably not 5. But if you toss the coin 1000 times or 1000000 times? The number of heads that will appear will most likely be nearer to the number of tails.

That is why it is okay to be wrong. If you have a proven mathematical edge and profit expectancy, it is in your best interest to play it repeatedly as many times as you possibly can.

As you mature as a trader you have to slowly detach from the negative feelings of being wrong / losing a trade gives. Acknowledge that every loss just brings you closer to the next win.

Because once we get comfortable being wrong, we get to learn more from your decisions and outcomes. We become better decision-makers. Better decision-maker -> better decision-quality -> better trades -> more consistent profit.

Everything I've said seems like mumbo jumbo, what are some actionable takeaways?

Collect Data.

@itsmaxtrading and @Trader_xB were the people who really motivated me to collect data and understand the stats.

With data, you can have more confidence during times of loss because you know the probabilities. And that in the long run, you will come out on top.

For example, what's the percentage of a demand/supply holding 

if it swept liquidity?
if it is better priced (P/D)?
if there is inducement?
if it's in a killzone? 
if it's pro/counter trend?
if [some criteria]?
if a combination of two, three, or all ?

Journal your trades and take screenshots.

This develops pattern recognition. You get to see what your winners look like and obviously, we want to emulate those. You get to see similarities between your losing trades and maybe seek to put an additional filter in your trading plan

Don't trade your PNL. Trade the chart.

Emotions just decrease our decision-making skills. Red PNL -> mek you skerd. Green PNL -> mek you hapi

Have a plan for what to do given x scenario. Always gonna be IF -> THEN. 

You won’t win ALL THE TIME.

The important thing is to continue to learn and improve. Losing doesn't make you a bad trader. Losing without learning does. 

The thread might be messy but I hope you learned something. Go check out the book "Thinking in Bets" by Annie Duke for more stuff about this. She has a lot more stuff on it, I just can't remember, probably time for a re-read.

If you liked it probably gimme a follow or something. Until then, cheers. Goodluck and good trading :D

You can read the unrolled version of this thread here: https://typefully.com/magikarptrades/TTdhPjR