Many traders approach the stock market much like they do the casinos in Las Vegas.
They make trades based on a feeling or a hunch.
Though trading and gambles share some speculative aspects they should be approached in a very different way.
This trading law is something that almost any trader can relate to.
We all love to predict a stock's price move and watch it come true.
Typically, we boast about these stock trades to all of our friends and family and can't wait to "call" another market move.
The losing trades, curiously, get lackluster airtime.
Though successfully predicting the movement of a stock strokes the ego, it has absolutely nothing to do with the business of trading.
Read the statement below slowly-maybe several times-to let it sink in.
Trading is a business decision; predicting is an ego play.
What does that mean, exactly? It means that you should enter trades only if there is a sound business reason to do so.
Those reasons should be thoroughly defined and even documented before you take each and every trade.
You should never trade because you want the market to prove your prediction correct.
As a matter of fact, you shouldn't have an opinion or prediction for any trade.
Rather, you it is more prudent and in the the end more profitable to have a plan for whatever way the markets happen to behave.
In my experience, this is the only way to become a profitable trader in the long term.