What's the most counter-intuitive thing you learned in trading?

comagnum said:
What was the most counter-intuitive thing you learned in trading?

For me that would be 'less is more". Spending less time with trading, trading less often, and taking smaller positions has helped my bottom line profits and at the same time keeps me chilled out.
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Can you still make enough to make it worthwhile if you "trade small and trade not often"?

Regards,
 
1) Everything is the opposite of what it seems in finance. It all exists to take your money not make you money. All the big shiny buildings in every financial center were built with the money of people looking to make money, not much different than the shiny casinos on the Vegas strip.

2) You will beat most Hedge funds, CTAs, mutual funds, traders, and most every sort of wealth manager there is just with a low cost S&P500 fund you hold and don't trade.
 
FreakofNature said:
The need to be right, is a killer for the clever ones.
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Imagine back when Reagan made statements that he also followed through on because he was that type of leader, and you bought some low, even underperforming, stock because you 'risked' he would follow through. Lots of missed money. And it is a lot safer than say, 'vegas' since the government these days picks winners and losers at will almost. There is a reason a whacko like Nancy Pelosi is a millionaire now, and it sure as hell isn't because of her brains, it's because of her power to intimidate, manipulate, and gain favor with lobbyists, then investing in the stocks she knows she will affect. Sad to me, but reality now.
 
Many systems/methods that sound like they should work do not work. For example, it depends on your system, but in many instances, stops are counterproductive.
 
You need capital, so you dont need pipe dream returns to make a living, and you need exceptional risk control, cutting losers short nearly asap, all else is bs and ego talk.

Sick of reading so much bullshit lately.
 
FreakofNature said:
You need capital, so you dont need pipe dream returns to make a living, and you need exceptional risk control, cutting losers short nearly asap, all else is bs and ego talk.

Sick of reading so much bullshit lately.
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I like BS!
Without it we wouldn't have the surf report.
 
ET180 said:
How would you know? ;-)

For me, the most counter-intuitive thing has been the power of trend. Losers keep going lower, winners keep going higher. Markets over-correct most of the time.

Traders realize that efficient market theory is bullshit. XBI for example. Look at how it is impacted by Trump's tweets. Trading around 57 earlier this year and now 72ish on no news. It's just a biotech ETF comprised of hundreds of companies. How could market misprice it so drastically in such a short amount of time. Earlier this year, one could profit from XBI by shorting it, then bribing someone in the press pool to ask Trump or his press secretary during a press conference what he thinks of drug prices. Surprised no fund tried that.
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I floated the idea before, that the inner circle could be profiting from his tweets, w/o real fear of reprisal now that we have his SEC appointment. As for why XBI is so 'mispriced'. I took a big hit over the year, and politics was why, Clinton price fixing talks, Skirelli guy price gouging, then Trump talking more about price fixing, followed by FDA easing of deregulation made that chit year a winner for many. I still think biotech is under priced but it's picking up momentum fast.
 
Trading taught me that most people run away screaming at the prospect of making money. They run away screaming from their debts too. What IS it with money? I've never attached much importance to it- I don't need it everyone else does. Money is not the problem-in fact there's too much in the world
 
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