The Illusion Of Certainty

Uncertainty quote by Voltaire

As humans, we have an innate desire for certainty.

We tend to be really afraid of the unknown.

We want to know what tomorrow is going to look like.T

his is why forecasting – in all of it’s many guises – has been a profession for millennia.

Paradoxically, we tend to prefer the certainty of a bad scenario over the uncertainty of the unknown.

So we’re always trying to create a sense of order in our world. We feel better if we can tell ourselves we understand what is going on.

We love to do this through narratives, stories. We’ll subscribe to a narrative that we think best explains what’s going on in the world from our perspective.

And we HATE it when reality doesn’t conform to story inside our head, because then we feel like we’ve lost control.

As a trader, it’s really important to embrace uncertainty. Admit that you don’t understand the entirety of what’s going on. And get comfortable with feeling uncomfortable.

One of the major psychological benefits of trading options is you can always structure a trade where your worst case scenario is defined, limited and known up-front. This makes getting comfortable with the uncomfortable a lot easier 😉If you would like to learn how to trade options profitability, please join my webinar this Thursday.