Opinions Are Like . . .
"What is bad luck? Opinion. What are conflict, dispute, blame, accusation, irreverence, and frivolity? They are all opinions, and more than that, they are opinions that lie outside of our own reasoned choice, presented as if they were good or evil. Let a person shift their opinions only to what belongs in the field of their own choice, and I guarantee that person will have peace of mind, whatever is happening around them."
— Epictetus, Discourses
I have touched on opinions a few times in my daily journals.
As traders we will form an opinion pre-event, based on the stats/data that we have available and if this then meets the rules/criteria for our strategy, we have a potential qualifier.
Our opinion needs to then become that of a neutral mindset, once the event goes in play. This is because we are fully aware that once a trade goes in play, absolutely anything can happen and we need to manage the trade with an observing eye, rather than perceiving what we think will happen. If our trade goes as we expected it to, we take our targeted pre-event profit and it's job done. If however the trade is going against us, then we must cut our losses at our pre-agreed exit point, for a controlled red to minimise any damage to our bank balance. Remember, because of the stats/data that we have available and the rules/criteria that we have put in place for each trade, we will be right many more times than when it occasionally goes wrong! As long as we manage our losses sensibly, this means we will be profitable long term and we are always protecting our bank.
Opinions are important; If we didn't have an opinion on how we felt a trade would go, we wouldn't trade anything! The difference here is that we form an opinion, but then we observe to see if the trade goes to plan as we expected it to. This means we are not convincing ourselves that if a trade is going against us, it will turn back in our favour, due to our initial opinion. We are trading what we are observing and we avoid ending up in the land of hope and leaving it too late to control our loss at a manageable level.
This is of course vital for long term growth and stability, rather than the boom and bust syndrome.