The Bull Market Genius Part I: Rationality
August 28, 2018
≈ Nobody loves you when you’re down and out. ≈
Nobody wants to talk about market crashes. No wonder. The History of the United States is filled with them, some being pretty traumatizing. Take the crash of 1929 and, almost 80 years later, the crash of 2008 as examples. Millions of dollars were wiped out from savings and investments.
Market crashes are not an easy topic also because people don’t understand the anatomy of the crashes, and, therefore, don’t know what to do about. Understanding is always a poor substitute for convexity, however.
There is nothing rational about the financial markets. They are moved by euphoria and panic. Behavioral finance has proved that when it comes to scenarios such as crashes, people rarely make completely rational decisions.
That’s when traders come in and make money by exploiting the consistently irrational behavior patterns of other traders. Why don’t we change the desire for rationality for Protect & Profit?
In a bull market, everyone is a genius. But what about bear markets? This is when the bull market geniuses swim naked. We don’t. We won’t.
If you want to be The Genius of the Next Bear Market, sign up for the Bear Market Survival Guide webinar, on September 5th, 2018 @ 8:30PM EST. Click on the banner below and secure your place.
Chart of the Day
Slowing momentum
You’re going to learn during the Sep 5th Bear Market Survival Guide webinar that identifying a slowing momentum on a bull market is very important. This is when you tap the breaks, reducing the bullish exposure. Sign up for the webinar here.
Video of the day
Thought Of The Day: Learn to Trade from your Mobile Device
Being prepared is key! Coach Tim explains why it is crucial to learn how to trade from a mobile device.
Today’s Lineup
Tales of a Technician
My Cancer Story
“Six years ago when I was 28 years old, I got sick. Chills, night sweats, daily fevers. Then I got sicker and after a fit of uncontrollable shivering decided to make the trek to the doctor for some help (…) The next day the test results came back, and they told me to return to the doctor’s office. There I learned that my white blood count was astronomic and I had cancer. Leukemia to be exact.
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