If I had to name one thing that matters most in trading, I'd confidently say probabilistic thinking. Risk management, entries, exits, trading strategies, even trading psychology, have no solid foundation without it. I'm going to write a series about probabilistic thinking in trading, in both English and Korean.
Probabilistic thinking is the ability to recognize multiple possible outcomes, each with its own probability, rather than assume any single outcome is certain.
When we apply this way of thinking to something that has already happened, it means seeing the outcome as one of many possible outcomes that was realized with a certain probability, rather than as something that was destined to happen.
Put more simply, an event that has already happened is not something that was predetermined. It is one of many possible outcomes that happened to be realized.
A winning trade doesn't mean the win was destined to happen. A losing trade doesn't mean the loss was inevitable. Several outcomes were possible, each with its own probability. One of them was realized this time.
And when this perspective meets repetition, a new insight begins to emerge.
— To be continued —
This is educational writing about trading. It is not investment advice or a recommendation to make any particular trade.