So we trade with conviction, with belief in the validity of our strategy, but that is all. We don’t extrapolate this to conviction about the outcome of our trade. Our conviction is focused, not far reaching. It is about the strategy and set up, not about the outcome. If our conviction in a trade extended to its outcome then we could quite possibly find ourselves on a nasty losing position, hanging on with firm conviction that it would come good in the end. Many have come unstuck with that approach. It is conviction in your strategy that tells you when (and how) to get out, as well as when to stay in. It has nothing to do with conviction in the outcome.
Of course news can dramatically affect the market, but no matter how great a storm is whipped up a focused conviction in our strategy will mean that we can ride it, taking advantage of set-ups and opportunities to ride a wave. Conviction that the market is about to spiral or charge through the roof is not in itself a valid reason to jump on a trend or reversal. Yes, we trade the news, but we play the reaction.
Trading is often touted as a means of making a quick buck. Many have come unstuck trying to do just that. This is not to say that it is particularly difficult, it just depends where your conviction lies. At the Lazy Trader we can show you how to develop the right strategy and methodology, how trading successfully can be within reach for all, and that the power of conviction is the key to success.
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