blacy_emotions_iconPrice action in the markets is “the tell” – as they used to say. (It seems that is one of those words that has come and gone). But the problem is this said ‘tell’, tells you different things – it can be interpreted many ways. It is what is known as ambiguous.

Humans have a known aversion to ambiguity. We want things to be certain. But in trading, price action and the best thing to do is almost always uncertain and very frequently our analyses produce conflicting answers. Up? Down? Now or Later? …becomes an infinite loop of ambiguity.

In short, this loop is what makes decision making in trading so difficult – or at least it is the FIRST reason.

What can you do about this ambiguity, conflict and innate desire to force certainty from uncertainty? Ironically you can “embrace” it. You can take time to do something a little bit like meditation on the idea of ambiguity and conflict. What I mean is let yourself feel it and feel the anxiety of it. Invite that feeling to fully show itself to you.

Doing so lets you get more comfortable with it. Getting more comfortable with it as a strengthening exercise in turn reduces the unspoken anxiety of it in the heat of the moment.

Which brings me to the second point. The latest research is showing that when we verbalize exactly how we feel in a given situation those feelings turn more into information and WAY less into action. This means that simply saying to yourself how uncomfortable the lack of certainty actually is (“I detest this confusion” for example) will make it less “noisy” in the heat of the moment.

With a little less mental static and a little more comfortable with the “thrill” of the unknown, it automatically becomes easier to make price action calls with greater confidence.