Trade The Reality, Not The Belief

March 29, 2013

Stuart Young

Trading Psychology

Last updated: 20240328

We’ve just completed a record-smashing quarter in 2013: S&P 500 ($SPX) ends above 2007’s record close, Dow ($DJIA) posts best Q1 Since 1998, both recovering all of the losses from the Global Financial Crisis (2007–2008 financial crisis). Source: CNBC

This has been an amazing run and the US stock market does not appear to be concerned with the continuing problems both in the wider U.S. economy (eg budget/debt ceiling battles) & the continuing European debt crisis, latest being the bailout of Cyprus and concerns of a bank run during last 2 weeks.

Reality vs Beliefs

While the world economy is still in fragile shape it is a reminder that as traders, we must trade what is presented to us on the trading charts rather than what we believe should be the case… Trade The Reality, Not The Belief.

As the quote from one of the most influential economists of the 20th century, John Maynard Keynes goes…

Markets can remain irrational longer than you can remain solvent.

A quote well worth remembering !!
Thank you and good trading.

Stuart Young

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