The Matryoshka Way
January 22, 2019
≈ Learning from a Russian icon. ≈
The use of symbols to represent ideas is called symbolism and symbolism is just as old human consciousness itself. Images and stories speak to us in a way that we instantly understand even the most complex theories and concepts. It’s like it has always been encoded in our genes.
The Matryoshka dolls symbolize many things: fertility, the feminine, the continuation of the human species, family legacy, a Universe inside another Universe, the unity of body, soul, mind, heart, and spirit. You name it.
When thinking about the top-down approach to the markets, many symbols and metaphors come into mind. Including that of the Matryoshka doll.
Top-down traders go from the market skyline to a single asset. They study how the overall economy is driving the markets and check the performance of sectors and industries: if a particular sector is doing well, chances are, the stocks in that sector will also do well.
Bottom-up traders go the opposite way: they will use technical and/or fundamental analysis to pick up assets regardless of the overall economy and macroeconomic factors.
When choosing which assets to trade, which way do you prefer to go? From the largest to the tiniest Matryoshka or vice-versa?
The good thing is there is no wrong or right answer to this case. Either way will work.
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Video of the day
Why You Should Measure Twice Cut Once (Trading Psychology)
Coach Noah goes over the importance of paying attention to details and being cautious when placing and managing your trades.
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