Treat trading like poker, not like chess
In chess, you know where all the pieces are at all times. The full board state is always visible. Every possible move can be calculated. Outcomes follow deterministically from the rules
You have perfect knowledge of all relevant information in the system
In a market with perfect information, all traders would have complete knowledge of prices, utilities, cost functions, orderbooks, capital constraints, and all other exogenous variables
But trading isn't like that
Trading is more like poker. A game of imperfect information where your opponent's cards are not all known. Where you infer other positions and intentions from limited data. Where bluffing and deceit play a bigger role. Where your edge comes from probabilistic reasoning and reading opponents instead of brute force calculation
Don't treat trading like chess. Don't try to calculate the optimal move as though you are playing with perfect information
Play like poker. Understand that you don't have all the information, and adjust your strategy accordingly
In chess, if you play perfectly, you will win
In poker, you can play perfectly and still lose
Remember that