Interpretations that would result in a more satisfying experience

TRADING IN THE MOMENT 
Traders who have learned to think in probabilities approach the markets from virtually the same 
perspective. At the micro level, they believe that each trade or edge is unique. What they understand 
about the nature of trading is that at any given moment, the market may look exactly the same on a 
chart as it did at some previous moment; and the geometric measurements and mathematical 
calculations used to determine each edge can be exactly the same from one edge to the next; but the 

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actual consistency of the market itself from one moment to the next is never the same.
For any particular pattern to be exactly the same now as it was in some previous moment would require 
that every trader who participated in that previous moment be present. What's more, each of them 
would also have to interact with one another in exactly the same way over some period of time to 
produce the exact same outcome to whatever pattern was being observed. The odds of that happening 
are nonexistent. It is extremely important that you understand this phenomenon because the 
psychological implications for your trading couldn't be more important.
We can use all the various tools to analyze the market's behavior and find the patterns that represent the 
best edges, and from an analytical perspective, these patterns can appear to be precisely the same in 
eveiy respect, both mathematically and visually. But, if the consistency of the group of traders who are 
creating the pattern "now" is different by even one person from the group that created the pattern in the 
past, then the outcome of the current pattern has the potential to be different from the past pattern. (The 
example of the analyst and chairman illustrates this point quite well.) It takes only one trader, 
somewhere in the world, with a different belief about the future to change the outcome of any particular 
market pattern and negate the edge that pattern represents. The most fundamental characteristic of the 
market's behavior is that each "now moment" market situation, each "now moment" behavior pattern, 
and each "now moment" edge is always a unique occurrence with its own outcome, independent of all 
others. Uniqueness implies that anything can happen, either what we know (expect or anticipate), or 
what we don't know (or can't know, unless we had extraordinary perceptual abilities). A constant flow 
of both known and unknown variables creates a probabilistic environment where we don't know for 
certain what will happen next.
This last statement may seem quite logical, even self-evident, but there's a huge problem here that is 
anything but logical or selfevident. Being aware of uncertainty and understanding the nature of 
probabilities does not equate with an ability to actually function effectively from a probabilistic 
perspective. Thinking in probabilities can be difficult to master, because our minds don't naturally 
process information in this manner. Quite the contrary, our minds cause us to perceive what we know, 
and what we know is part of our past, whereas, in the market, every moment is new and unique, even 
though there may be similarities to something that occurred in the past. This means that unless we train 
our minds to perceive the uniqueness of each moment, tiiat uniqueness will automatically be filtered 
out of our perception. We will perceive only what we know, minus any information that is blocked by 
our fears; everything else will remain invisible.
The bottom line is that there is some degree of sophistication to thinking in probabilities, which can 
take some people a considerable amount of effort to integrate into their mental systems as a functional 
thinking strategy. Most traders don't fully understand this; as a result, they mistakenly assume they are 
thinking in probabilities, because they have some degree of understanding of the concepts. I've worked 
with hundreds of traders who mistakenly assumed they thought in probabilities, but didn't. Here is an 
example of a trader I worked with whom I'll call Bob. Bob is a certified trading advisor (CTA) who 

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manages approximately $50 million in investments. He's been in the business for almost 30 years. He 
came to one of my workshops because he was never able to produce more than a 12- to 18-percent 
annual return on the accounts he managed.
This was an adequate return, but Bob was extremely dissatisfied because his analytical abilities 
suggested that he should be achieving an annual return of 150 to 200 percent. I would describe Bob as 
being well-versed in the nature of probabilities. In other words, he understood the concepts, but he 
didn't function from a probabilistic perspective. Shortly after attending the workshop, he called to ask 
me for some advice. Here is the entry from my journal written immediately after that phone 
conversation.