Randomness

The random nature of nature is a phenomenon that foxes any body. The world keeps being, and lot of actions happen, from atoms, sub atomic particles colliding to collisions of nations, species, tribes and religions. Do all these things keep happening as a unplanned act or is it pre ordained is a question philosophers, mathematicians or many scientists have debated for years and will continue to do so.

To a large extent the same phenomenon is reflected in the market behavior. The markets are not predictable, any thing may happen, the only known is that the markets are there, they exist as of that instance. The market structures exist, regulations exist and millions of participants exist. But what trajectory the markets will take any time is not known.

As Warren Buffet has said somewhere 'We've long felt that the only value of stock forecasters is to make fortune tellers look good'. Such is the fickleness of the markets that any guru, trying to predict the behavior is sure setting up a losing game for himself.

This randomness makes string of great trades as likely as string of bad trades. And it is easy to congratulate one self for winning when may be it were plain luck, coincidences or God's pre ordained gift. Thus it is easy to confuse ability with luck in these random markets.

This confusion can be bad for a trader as a good trader may give up when a series of trades go against him. The worse is of course a bad trader getting carried away with the fluke wins and putting all his capital on the next trade to get wiped out.

So how does one tackle the randomness, and succeed without knowing what will happen next?

As mentioned before the markets while looking random do have a trend internally and broadly it is moving in some direction in a given time frame. So if can find methodologies that increase the odds of success in one's favour then over large number of trades one can emerge victorious. So following a good method and with rock solid discipline is the only way to succeed in this random environment.