 Welcome back to the Trade Hacker Mindset. In this episode, I want to talk to you about trying to predict market direction. Trading the markets can be difficult to master and seemingly just out of reach. Professional traders have a secret. Trading requires total mental and emotional control. It requires the Trade Hacker Mindset. All right, so welcome back. I've taken a little bit of a hiatus of producing new podcast episodes over the last four weeks or so. As we've been really busy teaching some classes, creating new courses and a bunch of other stuff that will be rolling out to our navigation trading community. So I apologize for the hiatus in podcasts. Unfortunately, they just kind of got bumped in favor of some of these other things. But I am dedicated to get back on track to get one of these out once a week. So let's jump in and talk about the topic for today, which is trying to predict market direction. Now, if you ever watch CNBC or follow any air quotes, trading gurus, then you know that they would make you believe that trying to predict market direction is actually how you trade. But the reality is it's not. You know, 90% of traders lose money and guess what? 90% of traders try to predict market direction. If you're going to be successful trading, if you're gonna be consistently profitable, if you're gonna be in that top 10% of successful traders, then you have to stop trying to predict market direction. The reality is markets are unpredictable, okay? The word unpredictable means you cannot predict them. However, just because markets are unpredictable does not mean that you can't consistently profit from them. So here's the deal, trying to predict market direction is no better than a coin flip. It's a 50-50 chance. Now, when you add the human element in, when you add human emotion, your probabilities actually go below 50%. So it's no wonder that 90% of traders can't make money consistently is because they're doing it the wrong way. So what if you could shift your thinking instead of, and stop trying to predict the market, you can move to strategies like we teach selling spreads, doing calendar spreads, selling premium, doing different types of option spreads that put the probabilities in your favor. We have some strategies that have an 85 or a 90% win rate. And the best part is, we are not trying to predict market direction. In fact, we don't care which way it moves. A lot of our strategies, as long as it just stays in a specific range, we make money and that can happen 80, 85, 90% of the time on some of the strategies. And even with those type of strategies, I see folks in our community trying to predict market direction within that and they're getting out too early or they're leaving it on too long or a whole myriad of issues instead of just following the rules to maximize profits over time. You see, we trade based on statistics and probabilities, but if you're constantly intervening because of a Fed announcement or a CPI announcement or some inflation data or some jobs report or anything else, you're affecting those probabilities. Now, some people will say, yeah, but it makes me uncomfortable with that kind of risk. Well, guess what? The risk of the strategy that you put on has the event priced in. Okay, so those options are priced appropriately. So if you're going to enter the trade and then close it out before an event happens that you knew about, then you probably shouldn't have gotten in the trade to start with because essentially you have taken the same amount of risk but you're not going to benefit from the payoff after the event happens because that's when the profit potential is actually there. So by doing that, you're intervening in the actual probabilities and one thing that does is A, you're gonna be right 50% of the time anyway, so why not just let the actual probabilities play out? But the other thing that it does is it has an effect on your mindset. It has an effect on your trading confidence. If you're constantly breaking the rules, if you get into a trade with specific rules and you consistently break those rules, you are breaking that, you're breaking a promise to yourself and whether you consciously see that or not, it's happening and so if you can't trust yourself, that's when people start to get, from a trading perspective, that's when people start to get, lose their confidence and then they go on a drawdown and they lose their confidence even more. Then they position size up to try to make it back and they lose even more confidence and it can just create a whole myriad of issues on the mental side of trading. Whereas if you have your rules written out, if you follow your rules, taking a loss is not going to be that big of a deal because you follow the rules, because you kept that promise to yourself and it's gonna give you that confidence because you are going to see the good results over time if you follow the rules and if you don't, you're not. And so it's not only a financial issue that creates not as many gains, more losses or whatever the case is, but it's also a mental issue. It's a trading confidence and if you've been trading for any period of time, you understand that your trading mindset is just as important, if not more important than the actual strategy that you are implementing assuming it's a good strategy that has an edge. As traders, it's just human nature to try to protect ourselves. So when we perceive risk, then we want to protect ourselves by either getting out too early or whatever it might be. We're innately trying to protect ourselves, but the reality is you're gonna be way, way, way, way better off if you just position size correctly so that if you do take a loss, it's not a big deal, scratch it off as a loss, move on to the next trade, put on the next high probability trade without trying to predict market direction based on every little gyration or event that we've got coming up in the markets. Now, does this mean that you cannot make money from just directional trading? The answer is absolutely not. No, you absolutely can make money from directional trading. In fact, one of our core strategies, our navigation trend trading methodology is completely directional. We're not using spreads. We're not selling premium. We're simply, I personally trade it just buying futures. So I'm buying futures to go long, I'm shorting futures to go short, and it's purely directional. However, here's the key. It's 100% rules-based with dynamic built-in risk management that over time produces favorable results. And if you've seen any of my videos on the NTT stuff, you'll know that over the last year, since August of last year, when I first started trading this specific NTT account, the broker keeps all the statistics. And what you'll see is that over that period of time, my win rate is only, it's just above 55%. I think to be exact, it's like 56.5% winners. That means 45% of the trades are going to be losers. So what is the key to that methodology? Well, your winners need to be larger than your losers, okay? And so, and that's exactly what the NTT system does. It has that built-in dynamic risk management of being able to get out of trades for smaller losses and being able to let your winners run longer. And so it's been extremely successful. For example, the first 11 months that I was trading in that account, I tripled, I more than tripled my account. And now it's been open for about 14 months and the accounts up almost 270%. So it's not that you can't make money directionally trading, it's when you do it sporadically and you don't have a risk management system. You don't have a 100% rules-based system. It's when you're just doing out of gut feel because you just have a feeling you know what the market's gonna do. If you can get away from that mindset of that predictive mindset, and it's hard, but you've gotta get away from the predictive mindset and you've gotta stop watching CNBC. You've gotta stop putting in your head all of these different resources. Maybe it's CNBC, maybe it's Bloomberg, maybe it's some trading guru that claims that they know how to predict market direction. Here's the news flash, they don't, okay? And so if you're following people like that who are constantly making you think that you can be successful either following what they do to predict market direction or trying to do it yourself, you will never be successful trading. You will never be consistently profitable. So I would highly encourage you to try to shift your mindset to get out of that predictive state. And hey, I find myself falling into that as well. I mean, we're surrounded, we get emails, dozens of emails a day about people claiming that they know what's gonna happen in the market or some type of commodity or crypto or everything else. And so we are surrounded by this mentality of predicting and lottery and hitting it big. And the reality is no successful trader trades that way, okay? So if you wanna be successful, then you've got to get out of that mentality. You've got to start getting into a probabilistic mindset. You have to trade based on statistics and probability. You have to have rules. You have to build that confidence to yourself and continue to follow the rules even when you have losing trades because you know that over time, over many trade occurrences, the probabilities will play out and you will have a favorable P and L at the end of a large number of occurrences. That's how you have to think about it. Stop predicting, start using probabilities. Hope this was helpful. Look forward to seeing you in the next episode. And as always, feel free to check us out at community.navigationtrading.com. We have a vibrant community of awesome traders always trying to help each other. So we look forward to seeing you on the inside. Cheers.