Trading Wisdom No. 6 – It’s a delusion to think you or anyone can predict where the market is going!

Trend Trader Charlie Wright states:
“It took me a long time to figure out that no one really understands why the market does what it does or where it’s going. It’s a delusion to think that you or anyone else can know where the market is going.

I have sat through hundreds of hours of seminars in which the presenter made it seem as if he or she had some secret method of predicting where the markets were going. Either they were deluded or they were putting us on. Most Elliott Wave practitioners, cycle experts, or Fibonacci time traders will try to predict when the market will move, presumably in the direction they have also predicted.

I personally have not been able to figure out how to know when the market is going to move. And you know what? When I tried to predict, I was usually wrong, and I invariably missed the big move I was anticipating, because it wasn’t time. It was when I finally concluded that I would never be able to predict when the market will move that I started to be more successful in my trading. My frustration level declined dramatically, and I was at peace knowing that it was okay not to be able to predict or understand the markets.”

Dear Trader friends, don’t try to predict the market, you don’t need to know what is going to happen next in order to become the Winner. Just follow the CLOSING PRICES, they will tell you the truth, they will tell you everything – whether the market is on the uptrend, downtrend or sideways trend!



Yes this is very true, the whole notion you have to predict the markets is utter nonsense.

No one can do that, newbies take note.


The fallacy that traders believe they can predict is what drives them into trading reversals.

After all, its obvious isn’t it? - price has been rising bar after bar and look, there’s a pin bar - so price is going to fall. Sell now, sell, sell,sell!



Well I actually believe reversals are one of the better plays out there but it’s all how you play them.

I think anyone who uses market orders to enter is quite possible in the prediction mode of trading or limit orders for that matter.

Buy or short stops in my experience tend to be more in the following the market category.

Of course there are a million caveats to what I just said.

How often do trends actually reverse? I’m not talking change direction for a few hours or days, I mean actually change fundamentally. Most of the major currency pairs are in a trend that has been going on for many months and even years if you look at them on the higher time frames.

Best bet is to wait for a reversal on that lower time frame that goes the same direction as the trend on the higher time frame.



Correct trends can run a long time, in fact I would’nt say they reverse at all, they top out and bottom over a long time.

From my perspective I was talking short term in nature.

However I do disagree that you should only follow a reversal in the direction of the main trend.

Counter trend moves, short squeezes, whatever you want to call them are some of the most profitable moves there are.

It takes good timing for these and even tighter stop management mind due.

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Maybe if you was totally correct the experience of viewing the charts would count for nothing

ABC wrecked me :rofl:

Know what they call people who time the market? Broke :laughing:

In all seriousness, this is very true. People think they can hack the market or give some sort of guarantee so lesser experienced or lesser learned traders have confidence in their trades.
Elliot waves and Fib levels are always perfect looking backwards and the practitioners can always explain why their trade didn’t work after price action is set. Few can actually nail their targets or move profitably. Most of the EW traders I know spend HOURS mapping out 1 single chart, planning that next big “WAVE 3” trade and blow it within a couple hours of the market being open. Then they’re locked in panic and doubt because they don’t know where price is going next.

Structure and price action; that’s about all we got aside from a few group influenced support lines or indicators.

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History abounds with people who were able to successfully predict where the market was going. If we are students of trading we have read many of their books.

“Just follow the closing prices…” sounds predictive to me.


I took OP’s term “predictive” in sense as the people who put an “X” on the chart and hold firm belief price is moving to that exact spot. My social media feeds are littered with these types. One person in particular likes to spot a price 2-3 months out or a year out. Then proceeds to claim accuracy of [enter highly subjective system] after updating the chart & position every day. The trade ends up -170% from the original target, his long is now a short and “in profits.”

Most/all of us “predict” if the next trade we enter is generally up-trending or down-trending. Once entered then use different methods to work out if the trend is weakening or we were incorrect about our assumption.

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There is a thought in these quotes, a theme so to speak.

The link is what price has done in the past.

Williams once posed the question 'is it logical to to understand what will happen in the future based solely on what has happened in the past?

Now here is a thought. Can we predict the market? - If the answer is ‘no’ then why not - is it because it’s random?

If it’s not random then are there means that we can use to ‘predict’ to to say beforehand (rough Latin translation).

Maybe we can use what say Wyckoff (chosen at random) used - only in our time we have the means right at out finger tips (literally) :slight_smile:

Edit: just for clarity William was talking about indicators that are generally based on price and the past.

Doesn’t this depend on your timeframe? Longterm, I am fairly certain the USD is going up against the Euro - I think in the end we’ll see 0.85 Euros to the Dollar. If I was a position trader I would take my positions and hold on to them. And I think make good money, if I had the resources to the deal with the weeks and months where the trade went against me.

You have to consider is this target or aim is what is driving Eur/Usd right now - this very moment.

If you are fairly certain that it is then it is good to evaluate the reasoning.

First up it is long term so little point looking at daily/weekly, even monthly charts.

My first thought is over the next 5 years for USD who is likely in charge of the US politically - if you figure Pres Trump then maybe ask him where he would like to see Eur/Usd when he leaves office.

Then turn to the EU…

Most often the guys that drive price seldom think that far ahead - quick profit etc…

How can I understand and follow the closing price?


That’s is a good question

if card counters do exist playing blackjack, do they know whats the next card ???

I think people are mistakenly using the word predict when they should be using speculate or educated guess.

it’s a subtle difference but can mean the difference between success and failure.

To me prediction is the idea you actually know what is going to happen in the future, well sorry you don’t

All we can do is let your trading edge work out.

I have seen fundamentalists, economists, Elliot wavers, buy the dippers all lose their shirt because of their predictions.

it a healthy viewpoint to actually admit to yourself you are clueless which way prices are headed.

this actually keeps you from thinking your more than mere mortal and doing reckless things

only the likes of Nostradamus (and Elliot Wavers) can predict prices, lol

No, they’re playing a game of statistics based on the score of high value cards vs low value cards. They start a count and add or subtract from the count based on the dealt card’s value. Then divide the count by the number of decks left to play. Positive number puts the player at statistical advantage over the house (bet bigger), negative number puts the house at advantage (bet minimum or move on).

Same with trading, you want a system or record of trading with a 50% or greater win rate to more-or-less guarantee profits if all other variables stay the same (amount risked, stop loss, trail, take profit…etc.)


There are some phrases used to attract the attention of the masses which are being used for as long as I can remember.

Phrases like “don’t forecast the market, just follow price” or "nobody can predict the market, so don’t do it"

But what masses are made to believe very often proves to be wrong. So before we agree with them let’s think first:

  • no matter how we call our positions they are a form of predictions! Yes, we hope, expect, anticipate, forecast, think,…, that the market will go in some direction. Otherwise, why to trade it? “oh, I am long but I don’t expect it neither to go up nor down!” Then why are you trading? :slight_smile:

  • In trading, we all deal with extremes. Traders always want something to be either 100% right or 100% wrong. Those of us who survived longer start to understand that 100% is not applicable for anything in trading. What this means is that, yes, you can’t know 100% what the market will do the next day BUT there are one or more most probable scenarios. I can’t tell you exactly when it will be snowing but I can bet (with high % of certainty) that it will during the winter season

  • What is the alternative?
    if not predicting we are reacting to the market price. “ah, it is breaking the high I am long. Now it is breaking the low, so close the buy and go short” Such plain reacting to the market price is a sure way to destroy your account. But what is wrong with it? I don’t know stop-loss hunting, manipulations, many brokers- many different closing prices, which one to follow? :slight_smile:But I am not doing this I wait for the market to reach a support level then wait for a pin bar. If there is no pin bar I am not entering. But if there is a pin bar based on statistics I know I can expect a move in the direction of the pin bar.” All was good until that word “expect” destroyed everything. Now we have to put that into the “predictions” basket :slight_smile:

  • Why are all big guys predicting? Why they are not following? Why Warren Buffett is buying and buying when the closing price of a stock is going lower and lower? If he was following he had to be selling not buying, right?

Hm, let me think, somebody once said that the smart money are buying during down days and selling during up days. I don’t know about you but I think the only reason for this is that they EXPECT higher prices. The proof for that lies in the COT report.

Have you seen the BIg Short movie? A movie about a hedge fund manager who PREDICTED the crisis.

Just to be clear when you are trading with a larger amount you cannot follow to market prices because there is not enough liquidity for everybody. Unless you don’t care about the ridiculously-big slippage.

  • Anticipating a market movement will make you prepared to catch it and to wait to get the most of it. By the way, waiting is the key to successful trend trading. But to wait you need to have a target. To have a target means to PREDICT!!!
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yes you highlighted my point thanks