You can never succeed in market trading without a belief. A market belief is a strategic frame placed atop the “noise” of a market’s continuous price fluctuation.
I believe that a market’s sole function is price discovery. A market produces a price based on some sort of buying and selling equilibrium.
I believe that in the long term a market will flow toward the path of least resistance.
To think about: betting on a market's upside has infinite return potential. Betting on a downward price move can only reward you until price=0. This doesn't mean that betting on a market drop is a poor strategy; it's a terrific diversifier, but it will not create the same return profile as an upside bet.
Another idea to consider: if you want to see the interconnectivity of markets, follow the price of the US Dollar and notice how other markets move relative to a rise or fall in the $USD. The dollar is trending downward--there’s almost no arguing this. I find it interesting to see what other trends could emerge if the $USD downtrend persists.
No comments:
Post a Comment