Trading is not predicting.
Written by: AsymTrading
Translated by: AididiaoJP, Foresight News
Most traders fail not because they lack methods, indicators, or information, but because they do not understand what trading really is.
In "Trading Psychology," Mark Douglas completely dismantles the notion that "trading is predicting, seeking certainty, and being right." Instead, he redefines the market: it is a probabilistic environment where your edge only manifests over a sufficiently long period.
This is why many experienced traders summarize Douglas's core idea in a simple phrase:
Trading is a numerical game of pattern recognition.
This article aims to clarify what this statement means and how misunderstanding it can quietly ruin your otherwise decent trading system.
Trading is not predicting
Douglas's fundamental point is very straightforward:
You never know what will happen next, and you don’t need to know.
At the level of a single trade, the market is uncertain. No pattern, indicator, or news can guarantee the outcome of the next trade. When you constantly seek certainty from a single trade, fear, hesitation, and emotional interference arise.
According to Douglas's definition, trading is not about predicting the next second's rise or fall, but about how to effectively execute a plan amid uncertainty.
Patterns do not predict—they only define "edge"
Douglas does not deny pattern recognition. In fact, he believes that traders should have their own trading methods.
What he aims to correct is the mindset traders have towards these patterns.
An effective trading pattern does not mean:
This trade "must" make a profit
The market "owes" you a profit
A single loss proves the method is "invalid"
A pattern only represents one thing:
Historically, when this type of pattern or condition appears, the probability of making a profit is higher.
That’s all.
Patterns only tell you the probability, not guarantee the outcome. Once you start expecting a specific result, you are no longer "trading probabilities," but rather "maintaining your self-esteem."
Results are random, probabilities are not random
This is a very important distinction in "Trading Psychology":
The outcome of each trade is random.
But the overall probability distribution of a series of trades is not random.
A truly effective trading method can also incur five consecutive losses. This does not indicate that the method is ineffective; it simply does not align with your fantasy of "certainty."
Douglas believes that traders should evaluate their performance like a casino:
Do not look at individual wins or losses; instead, look at long-term, large samples of trades.
Profit comes from [expected value × number of repetitions], not from the "right or wrong" of your single judgment.
"Anything is possible," this is actually your edge
Douglas repeatedly emphasizes this phrase:
Anything is possible.
Most people perceive this as a threat, but Douglas means the opposite.
When a trader truly accepts that "anything is possible," they will find:
Losses no longer feel personal
Stop-loss settings and executions become clean and decisive
Hesitation disappears
Overconfidence also diminishes
Accepting randomness is not pessimism; it is a form of liberation.
When you let go of the obsession with certainty, your execution will actually improve.
The "flow state" is emotionally neutral, not excitedly fervent
The "flow state" is often misunderstood as a highly excited or mystical feeling.
Douglas's definition is very straightforward. Entering a "flow" state means:
No emotional attachment to trading outcomes
No need to prove oneself "right"
No fear of "making mistakes"
Once the trading plan is executed, there is no impulse for interference
At this point, you engage in the next trade solely because the plan requires it, not because you "feel" confident or fearful at that moment.
The flow state is absolute loyalty to the trading process amid uncertainty.
Why is it called a "numerical game"?
Douglas never promoted any slogans, but the mathematical logic behind his thinking is very clear:
Identify patterns and find probabilistic advantages.
This advantage creates a probabilistic bias.
You must repeatedly and extensively execute trades that align with the advantage.
The final result can only manifest after a sufficient number of trade samples.
Thus, seasoned traders summarize it in plain language:
Trading is a numerical game of pattern recognition.
It is not about predicting, intuition, or belief.
It concerns probability, repetition, and discipline.
Why do most people still struggle?
Many traders rationally agree with Douglas, but emotionally and in action, they reject his conclusions.
They still:
Judge themselves based on the success or failure of individual trades
Expect every pattern to "work"
Feel that losses are an offense
Modify rules mid-trade
Stop executing originally effective strategies after a few losses
In other words, they verbally believe in probabilities but expect certainty in every outcome through their actions.
Douglas's focus is not on teaching you to find better trading methods.
Rather, it is about how to correctly apply the method you already have.
In conclusion
This article teaches us a simple yet hard-to-accept truth:
You cannot control the outcome, but you can control the execution.
Patterns provide you with probabilities, not promises. Stable profits require emotional "numbness" and repetitive actions.
When traders stop trying to "prove themselves right" and start letting "probability numbers" work for them, trading can truly get on the right track.
This is the full meaning behind that phrase:
The market is a numerical game of pattern recognition.
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