Most traders focus only on their own thesis.
They obsess over every little detail of a setup and then wonder why some of the best-looking trades fail, trap them and move in the other direction.
The market is not a deterministic equation to be solved.
It is a zero-sum game driven by competing players, positioning and human psychology.
The critical question is:
Who is wrong if I am right?
Every buyer needs a seller.
Every winner needs a loser.
A trade only becomes high probability when the opposing side has a believable reason to participate.
Ask:
- Who is taking the other side?
- Why does their position make sense?
- What are they expecting?
- What would invalidate them?
- Where are they trapped?
The best trades happen when the opposing idea is logical, the market encourages participation, and then that idea fails.
That failure creates:
- trapped traders
- forced exits
- momentum
- liquidity expansion
Assessing who is wrong and who is trapped has always been deeply embedded in my process.
But recently I’ve started thinking about it even more explicitly.
Not just identifying my trade.
Identifying the counter-trade.
The stronger and more obvious a thesis becomes, the more interesting the opposing thesis becomes.
The trap is not the setup.
The trap is the failure of a believable narrative.
And when a believable narrative fails, markets often move much further than most traders expect.