Are You Predicting Too Much?
One damaging habit retail traders develop is subtle and often invisible to them: “I think…” language.
- “I think this level will hold.”
- “I think the market should bounce.”
- “I think this looks bullish.”
On the surface, these statements sound harmless, even intelligent. However, they are a warning sign. In professional trading environments, “I think…” is replaced with something far more precise: “If price does X, I do Y.”
That simple change removes emotion, ego, and prediction from the decision-making process.
Why “I Think” Is Dangerous
“I think” language suggests forecasting. Forecasting activates the emotional brain, not the execution brain. Research in behavioral finance shows that prediction-based thinking increases overconfidence and attachment to outcomes, both of which degrade trader performance.
When you say “I think…” you unconsciously commit to being right. Now you’re more likely to do something that violates your strategy, like:
- Ignore contrary signals
- Widen stops
- Hesitate on exits
- Rationalize losses
Professional traders don’t minimize losses by being smarter predictors. They remove prediction from the process altogether.
The Solution: Conditional Thinking
Institutional traders, market makers, and seasoned discretionary traders use conditional logic:
- If price holds above VWAP, I stay long.
- If volatility expands beyond X, I reduce size.
- If this level breaks, the trade is invalidated.
This approach mirrors how strategies are designed. It is rule-based, observable, and emotionally neutral.
Make it a habit to monitor your self-talk when you trade. Whenever you say “I think…” stop and reframe your thought as a conditional statement. A Post-it note as a reminder is a good idea until you’ve broken the “I think…” habit.
To your trading success,
Mike Siewruk
PS: Was this advice helpful? Feel free to pass this link for a free membership to Trade Aptitude along to your trading buddies: thedailymarketforecast.com/signup