Posted by: joetradingplace | June 15, 2012

Thought Of The Day

How are we able to make money by following trends year in and year out? I think its because markets react to news, but ultimately major change takes place over time. Trends develop because there’s an accumulating consensus on future prices, consequently there’s an evolution to the “believed true price value” over time. Since investors are human and they make mistakes, they’re never 100 percent sure of their vision and whether or not their view is correct. So price adjustments take time as they fluctuate and a new consensus is formed in the face of changing market conditions and new facts. For some changes this consensus is easy to reach, but there are other events that take time to formulate a market view. It’s those events that take time that form the basis of our profits… John W Henry

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Responses

  1. This is the definition of a SMART trader, who never bets money, but trades on other trader’s confusions and emotions.


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