Trading is Scenario Building

I have had comments from people who have asked me to explain why I seem to be always "hedging"  my market analysis. I tend to give both sides of the story and never commit to either being a bear or a bull.. I think there is a basic misconception of what TRADING is all about. As a trader I am not interested in predictions of future action. I am not married to an opinion ,but instead take a neutral view of the market and take a proactive stand based on the evidence the market constantly throws at us. This creates a very lucid and dynamic mindset which is crucial if one wants to succeed in the long run.


If I tend to give an analysis depicting 2 sides this is precisely the skill needed by a trader. Scenario building as it is called is a major component in the skill sets that a trader needs to have.  Many people tend to stick to an idea and hold on to it until "hell freezes". The end result of this mindset is long term ruin.

Proactive involvement is essential if one truly wants to mitigate and control RISK which in the final analysis is the "secret sauce" of surviving the market place. It is for this reason that as a TRADER not an investor that I take such views that can change dramatically.

Risk control demands that one has to constantly be adjusting and fine tuning exposure. By having a neutral stance one can react without having to justify a change in view based on the evidence that the markets exhibit.

In the end, the TRADER's mindset creates a picture of a person without conviction which is totally the opposite  since it  is precisely the conviction of accepting change that creates the long term element needed for profitable long term success.