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I could never get into serious trading because current markets are irrational. Being a good trader these days is not about knowing what's going on; it's about b
by cryptica 5y ago
I could never get into serious trading because current markets are irrational. Being a good trader these days is not about knowing what's going on; it's about being irrational in the same way as the most irrational rich fools... But it's difficult to tell which group of rich fools you should imitate. Which completely insane narrative will become the new reality? There seems to be no method to the madness. It's just plain madness.
I'm kind of diversified right now. Some of my money is in value-adding businesses and some is in speculative crypto ranging from "This project has potential" to "This project is 100% hype-based and has no viable technological future but could be big financially because insanity is becoming a reliable trend."
- mccorrinall 5y agoEngineers can determine the cause of a bridge collapse because there’s agreement that if a certain amount of force is applied to a certain area, that area will break. Physics isn’t controversial. It’s guided by laws. Finance is different. It’s guided by people’s behaviors. And how I behave might make sense to me but look crazy to you. Morgan Housel. The Psychology of Money.
- cryptica 5y agoI guess that hits the nail on the head. Most people, especially rich people, seem crazy to me.
- Mikeb85 5y agoTrading has little to do with financial or economic models. And it definitely can be irrational. But it can be predictable if you can predict the behaviour of other traders, because price is determined by supply and demand for the asset. The underlying value is a small part of determining how other traders will value it.