Comments on: Market Myth #1 - Why

By: The Trading Digest » Blog Archive » Why Why is still not relevant

The Trading Digest » Blog Archive » Why Why is still not relevant — Wed, 05 Sep 2007 19:15:31 +0000

[...] few months ago in my first “Market Myths” post I talked about the dangers of trying to assign a “why” to market [...]

By: The Trading Digest » Blog Archive » Market Myth #3 - Drawdowns are Avoidable

Tue, 12 Jun 2007 02:40:55 +0000

[...] read Market Myth #1 and #2. You are no longer tweaking settings constantly or trying to figure out “why” [...]

By: Good to Go Pile . . . « Trading for the Masses

Good to Go Pile . . . « Trading for the Masses — Mon, 04 Jun 2007 17:05:53 +0000

[...] Market Myths, this should be useful as their are tons of these. [...]

By: Dave

Dave — Mon, 04 Jun 2007 11:05:07 +0000

No I love hearing your comments. I don’t see it as argumaentive at all. My only point, and I believe John’s as well is that as a systematic end of day trader these “why” answers do not play any role in our trading decisions.
I think John said it quite well and sums up philosophy as well,
“Making money is the goal, not trying to predict the future. Once you stop worrying about why things are happening and just focus on what is happening, you will find you have much less of a bias and are in a much better position to react to unusual events”
Now intraday…..well thats a whole other conversation/book.
Thanks for the comments and best of luck with your blog. Keep in touch,
Dave

By: Stephen

Stephen — Mon, 04 Jun 2007 03:18:17 +0000

I dont change my trading style consciously based on news or trying to predict what will happen because of the “why”. But i do think its human nature to think about it and ponder it. And even if you werent 100% sure of what will happen based on the why.. Trading is a probabilites game, just put your stop in and only hold enough shares to loss less than what will hurt you. If you get stopped out.. oh well.. next trade but i do like your videos.. i hope you dont see me as arguing with you, just looking for people to talk with here.

By: John

John — Mon, 04 Jun 2007 03:01:48 +0000

Another thing to remember is everything seems clearer after the fact. Were you sure enough in your belief on the morning of 2/28 to get short and then get long the other morning? Because the other part of this equation is that being right is 100% useless if you don’t make any money off of it.

By: Dave

Dave — Sun, 03 Jun 2007 13:42:33 +0000

You seem to have your own why for this episode. The question is how do we know your right? As a systematic trader “why” is not in the equation.

By: Stephen

Stephen — Fri, 01 Jun 2007 15:35:16 +0000

I do agree with you that you don’t need to have a “why” to make money, and trying to always know the “why” will drive you crazy. But i do like to try to think of what the “why” might be in psychological terms, just to get an idea of who is doing what. And in my neophyte view of the markets, it looks like the first sell off in china was unexpected, and then everyone paniced not knowing what was going to happen, so they all got on the bandwagon of selling, which escelated in a system crash or sorts. This time, the sell off in china was a deja vu, and since the world hasnt ended due to the first one, people didnt have the urgency of AHHHH!! whats going to happen, so the markets shrugged it off.