Monday, July 9, 2012
What is a successful trend?
In the distance to the north is seen a herd of deer come thirsty a few meters to quench your thirst, from one moment to another every turn and still thirsty returned suddenly from the south is a hurricane coming. And if you were a thirsty deer still do devolviéndote to the hurricane. Of course quenching your thirst.
Based on this story can be understood that deer have a rational purpose, but the irrationality of Hurricane make change the trend.
In this way financial markets are driven by primitive and irrational reasons that group loses rational sense, ie human beings behave very differently when making decisions collectively than alone.
And that is where we find that we realize that emotions move these financial monsters, and are a pair of totally primitive instincts, fear and greed. If you read that right, not the news, changes in the economy or what your neighbor thinks it's as simple as that. The fear of losing and the greed for gain.
And when these two are making thousands and thousands of people take a position where some are deer and other hurricanes and the end and nobody knows where to go.
This is why I bring the concept of trend. Remember the trend is your friend. But that trend is my friend?.
Precisely the key is that before taking a trend I expect that other trends start moving at the same time, and patience is immersed in the fact that the hope lies in that these other trends to be larger than I need more time to sync with mine.
So a successful trend is simply a group of trends moving in the same direction but on different channels.
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