Making money by trading in financial markets is a formidable task.This is a great truth that is almost impossible for one person to teach toanother. It can only be realized by the very act of trading.
People approach markets in the same way that they might approach a lake containing a fabled
treasure. They feel that all they have to do is set up appropriate pumping equipment and the treasure is theirs.The problem is that there is an energy in financial markets (and, indeed, in economic activity) that somehow coerces and organizes investors into a single-minded unit. There is nothing sinister in this: it is just nature ‘doing its thing’.Investors do not recognize it until they
are finally caught in a disastrous bear market that wipes out months, if not years, of hard work.
The reality is that successful trading requires a certain psychological competence to do the job and, unfortunately, nature has chosen not to wire up the human psyche with automatic access to this competence. The point here is that financial markets can have a direct and dramatic effect on wealth and on associated living standards.
When a system generates a buy or sell signal, the investor will still feel obliged to decide whether or not to implement that signal. Investment thereby moves away from the objective realm and into the subjective realm.
People approach markets in the same way that they might approach a lake containing a fabled
treasure. They feel that all they have to do is set up appropriate pumping equipment and the treasure is theirs.The problem is that there is an energy in financial markets (and, indeed, in economic activity) that somehow coerces and organizes investors into a single-minded unit. There is nothing sinister in this: it is just nature ‘doing its thing’.Investors do not recognize it until they
are finally caught in a disastrous bear market that wipes out months, if not years, of hard work.
The reality is that successful trading requires a certain psychological competence to do the job and, unfortunately, nature has chosen not to wire up the human psyche with automatic access to this competence. The point here is that financial markets can have a direct and dramatic effect on wealth and on associated living standards.
When a system generates a buy or sell signal, the investor will still feel obliged to decide whether or not to implement that signal. Investment thereby moves away from the objective realm and into the subjective realm.
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