Trade The Market Not Your Emotions Or Your Politics

People often argue over what the role of markets is. If you ask someone with a traditional education that involves say a degree in economics or business followed by an MBA they will tell you that markets are designed as a mechanism for raising capital and for pricing a business to enable it to raise additional capital for expansion.

Bollocks.
Markets have two intrinsic functions.

1. To present investors/traders with an endless stream of opportunities.
2. To allow for personal enrichment should you be on the right side of these opportunities.

However, there is a prerequisite to these functions and it is the ability to recognise them as being devoid of bias. This means that you trade what you see and not your belief structure about what you see.
The image above is of the four major US indices each of them fulfils the requirement for being risk on.

1. Long-term trend is up.
2. More green candles than red candles.
3. Price has gapped up.

Irrespective of your politics these situations represent opportunities. The market has fulfilled its first function – it is offering you an opportunity. Whether you make any money out of it is up to the individual.

Author: Chris Tate

Source: Tradinggame

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