When 2 + 2 = 22
I have seen just about everything
when it comes to twisted logic and superstition regarding trading. Back in the
day when I was part of the “Masters of the Universe” crowd roaming the exchange
floor, off the wall superstitions were the norm.
I’ve posted before about “Magic”
and his magical Kruggerand [ The Magic Market As Illusion, December 9, 2011
post].
I once knew a guy who refused to
change socks and shoes, for fear of breaking his succession of winning trading
days. He wouldn’t take ‘em off; not even to sleep or shower. He’d put plastic
bags over his feet and shower. Up in the traders lounge, at the clearing house,
one day his “luck” ran out and he took his shoes off; his feet were green from
the color of his socks soaking into his skin.
So, why do people do this?
If logic mattered in trading,
everybody would be a winner. Markets consistently let us know most
people have to lose. Since most people lose money trading over time, brains and
logic can’t be the answer to success. Sound logical? [Uh oh, we’ve wandered
into another logic dimension.]
As humans, especially college
educated rational decision makers, we have a very hard time squaring this
circle; this is why doctors and lawyers make for the worst traders in the
universe.
Superstition lends itself to
us when we can no longer comprehend the forces behind an actual outcome.
“Oh boy, made money on that trade.”
“Yea, must be the socks.”
The markets have the largest sea
of money chasing prices ever known to man. It is the perception of events that
create market ups and downs, and the momentum chasing it. It ain’t logic.
After all ….
I Rest My Case
Have a good day everyone.
-vegas
P.S.
Think gold was a little
disappointed in Weimar Ben today? Gee, who could have ever seen that coming?
Probably the greatest delusion in the world: that humans are ever logical, about anything. Every decision we make is emotional. Add in the fact that we never have all the info necessary to make a truly informed decision, and it's easy to see why most people lose money.
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