The market’s main characteristic is that it is independent, constantly moving, and provides information about itself, but it has no awareness of how we interpret it. The market presents itself from its own perspective and doesn’t know our expectations; it has no idea whether we see it as an endless stream of opportunities or as a monster poised to take our money at any moment. If we perceive it as an endless array of entry and exit possibilities, we will be in the best state of mind. However, if we view market information as painful and try to avoid that pain—i.e., losses—by consciously or unconsciously blocking certain information, we close ourselves off from opportunities and feel as if the market is against us and owes us something.

Many traders can be observed avoiding the pain of the moment—such as closing a position at a loss—by yielding to emotions generated by the mind and thoughts, extending their stop loss. They refuse to acknowledge that the price has moved in the other direction, delaying the loss and allowing it to grow larger. They may get lucky once or twice, and the price might indeed reverse, but this undisciplined behavior will eventually lead to a substantial loss or even the complete depletion of the account balance.

Those who deceive themselves work against their own interests. From the market’s perspective, the information provided is entirely neutral. Neither candles nor price patterns carry positive or negative charges. For the information we receive to elicit feelings in us, it requires interpretation, which is a function of our mental framework. Everyone interprets, perceives, and experiences what they see differently. There is no universal way of seeing and interpreting, as each person’s mental framework is unique. We are born with different behaviors and personalities, exposed to varying environmental influences that shape our beliefs and personalities.

The market can do anything at any time. When we break it down, what do we see? The most basic elements of any market are the traders, who exert forces on price. There are two ways to make a profit: buying low and selling high, or selling high and buying back at a lower price. If we assume that everyone wants to make money, then anyone buying believes they can sell at a higher price in the future. The same applies to sellers, who believe they’ll be able to repurchase at a lower price later. Therefore, every price movement reflects traders’ judgments of what is “high” or “low.”

The principles of market behavior are fairly simple, as there are three perspectives:

1. Those who believe the price is low.
2. Those who believe the price is high.
3. Those who are waiting to decide.

When there’s a balance, the price will stagnate, as both sides absorb each other’s force. If there’s an imbalance, the price will move in the direction of the stronger force. At any moment, we can assess which force is stronger by comparing the current price to a previous one. However, we can never know how many traders are waiting to enter the market or how many might change their minds and close their positions. When we consider this, we realize that nothing prevents anything from happening at any time in the market.

Our lives are built around high probabilities, so we’re conditioned to expect them. If we leave home to go from point A to point B, there’s a very high probability that we’ll arrive; it’s almost certain. By contrast, in the market, there is no such thing as “almost certain”—only smaller and larger probabilities. Each trade is unique, with an outcome that can be predicted to some degree but is statistically independent from all others. If you cannot accept, know, and understand the nature of probabilities, trading will become a stressful and uncertain endeavor.