|
PureBytes Links
Trading Reference Links
|
ITīs A BEAR MARKET
n Reminiscenses of a Stock Operator, it is engraved that a trader must always
know what is the primary trend, and never trade against it. And that is what
the originator of this debate was concerned with. Is this really a bear
market? Should it go down?
However, if someone actually knew for real, all the time, whether the market
was a bear or a bull market, that person would be able to make repeated and
consistent killings.
And that would go against the random walk hypothesis.
According to the random walk hypothesis, the only thing relevant with respect
to markets is what they are doing as opposed to what they should be doing.
Therefore we should not worry whether this is a bear or a bull market. That is
a market and that is enough.
One should not care about what will the markets do today, tomorrow or the next
minute. One cannot even really know for sure what will the markets do the next
second!
We are much better off approaching the markets with total ignorance because
that way we can adapt to them with total flexibility.
As long as we are concerned with what should the markets do, we are having in
our hands the seeds of failure and disaster.
We should only be concerned with our actions: what will we do if the market
does that, and what will we do if the market does this.
That way, trading can be an effortless activity.
Indeed, one should change the focus from the market to himself.
That is all.
Markets should not should anything. Markets ARE.
P.S. As opposed to what I have said, I would like to mention that the Dow
Jones Industrial Average has been trading under its 200 period moving average
recently. And the 200 period moving average is the one and only technical
indicator that even the most radical fundamentalist will respect. It is
amazing to see how the 200 period MA provided support before being broken, and
how the market is having a tough time after its downside breakout!! It must
indeed have a large following!
Alfredo
|