This market has an interesting way of conditioning traders to ignore fundamentals. Technical analysis, an entirely subjective discipline of looking at past trends and extrapolating into the future is looked upon as some sort of holy grail. I have watched these markets day-in and day-out for quite some time now and what I see is nothing but a flock of sheep: price-chasers. I watch financial social media and what I see is everyone Bullish after an up day and everyone Bearish after a red day. People seem to desperately lack conviction. Traders ignore everything that is going on around them in the real world in favor of hyper-focusing on the lines on their charts drawn in in such fashion to support whatever confirmation bias of the day. I'm not saying that I am above playing the technical trap. The market is a chaotic system. What we are doing is nearly impossible. We are attempting to predict the future here. Not just what ultimately Will happen but also When it will happen. Unfortunately, our task at hand is impossible. Sure we will all have bouts of success and failures. The most important thing is to come out ahead in the long run, holding on to the bulk of the success and keeping failures small and manageable. Look, if trading was as easy as extrapolating trend lines on a chart, we would all be rich but it is not. I urge people to not look at something going up and chase price because the trend line is up. Ask yourself 'Why is this going up.' Many traders come to the conclusion that asking that question of why the market does what it does is ridiculous, searching for answers in this chaotic market will only drive you mad.. Perhaps they are correct in some respects but that is, and will always remain my mission. Im on the search for truth. It is looking at the why, the fundamentals that allowed me to forecast the demise of companies such as GPRO, YELP, & BABA. These companies all ended up crumbling even though it ended up taking much much longer than I originally anticipated. Which brings me to my next point: Patience.
The market is a feedback loop that rewards and punishes traders for the decisions they make in real time. The entire ecosystem the way it is currently set up is to exploit everybody's desire for short term gains, easy-money. This is a misnomer. If there was such thing as easy money in the market, we would all be rich. If you go into battle with a short-term time-frame, with no macro view or fundamental bias to give you conviction to take a position, you are going to get eaten up by algorithms and spit up by a margin call. To extrapolate anything this chaotic system does in a small period of time into a longer period of time is a mistake. I think that many traders who have been attempting to navigate the endless intra-day whipsaws of the last few months will agree with me on this.
The main point I am trying to make here is open your eyes and minds to the big picture. Don't get caught chasing price: In this market if it's just spiked one way or the other in a stop-run, chances are its about to spike the other way to wipe out everyone. With no direction from the Fed, the algos are in full-control and dominate the arena. The global economy continues to deteriorate rapidly. Behemoths are missing earnings and getting slaughtered. If every corporation misses and gets hit. It is an impossibility for the indices to stay propped up.
It can go up, it can go down, it can flop around sideways: In the short-term nobody knows. There is nothing supporting the Bull case but cheap money which is exactly what created the last two bubbles which both ended disastrously. Keep your eye on the big picture because eventually fundamentals will matter in a major way and when they do, many price-chasers will find themselves roadkill & the market is not so kind as to drag them to the ditch.
The market is a feedback loop that rewards and punishes traders for the decisions they make in real time. The entire ecosystem the way it is currently set up is to exploit everybody's desire for short term gains, easy-money. This is a misnomer. If there was such thing as easy money in the market, we would all be rich. If you go into battle with a short-term time-frame, with no macro view or fundamental bias to give you conviction to take a position, you are going to get eaten up by algorithms and spit up by a margin call. To extrapolate anything this chaotic system does in a small period of time into a longer period of time is a mistake. I think that many traders who have been attempting to navigate the endless intra-day whipsaws of the last few months will agree with me on this.
The main point I am trying to make here is open your eyes and minds to the big picture. Don't get caught chasing price: In this market if it's just spiked one way or the other in a stop-run, chances are its about to spike the other way to wipe out everyone. With no direction from the Fed, the algos are in full-control and dominate the arena. The global economy continues to deteriorate rapidly. Behemoths are missing earnings and getting slaughtered. If every corporation misses and gets hit. It is an impossibility for the indices to stay propped up.
It can go up, it can go down, it can flop around sideways: In the short-term nobody knows. There is nothing supporting the Bull case but cheap money which is exactly what created the last two bubbles which both ended disastrously. Keep your eye on the big picture because eventually fundamentals will matter in a major way and when they do, many price-chasers will find themselves roadkill & the market is not so kind as to drag them to the ditch.
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