One thing this event has really ingrained in me is how important narrative is and that no matter how screwed everything looks, you need to consider whether you may have missed the move.
I got short in this market a few times when we were already 20% down and unfortunately it was too easy to shake me out on fear of a reverse at that point…
One thing this event has really ingrained in me is how important narrative is and that no matter how screwed everything looks, you need to consider whether you may have missed the move.
I got short in this market a few times when we were already 20% down and unfortunately it was too easy to shake me out on fear of a reverse at that point - so I've gained naff all being short even though we dropped further. A lesson learned for cheap thankfully, but an important one; don't be an a$$hole and chase.
If we still had naive governments I'd be all in short, but I think this has been a fantastic lesson in showing what happens when fundamentals disappear and the general risk narrative is the focus point of the market. I spent a lot of time last year wondering why the market went up when the fundamentals were weakening. How little I knew. I was one of those who actually hadn't a clue about how markets work - thinking the data is all that matters. This crisis has taught me some serious underlying market lessons; the main one being what you said in a previous post that sums it up well; 'by the time you've seen the data, it's too late'.
Leighan, I have seen some really experienced traders get shaken off positions in this market. The bands have expanded so violently, people are having trouble hanging on.
great insights about how you are adapting.
I liked your comment about "naive governments." That's basically why I can't advocate assuming it's going to get worse. It probably will from a humanitarian point of view, but I just worry that the Central Banks are throwing so much at this problem, it will be tough for asset prices to go down. Have you heard anyone say, "we can't do that, we have no money." I haven't. All I have heard is "we will do whatever it takes."
One thing this event has really ingrained in me is how important narrative is and that no matter how screwed everything looks, you need to consider whether you may have missed the move.
I got short in this market a few times when we were already 20% down and unfortunately it was too easy to shake me out on fear of a reverse at that point - so I've gained naff all being short even though we dropped further. A lesson learned for cheap thankfully, but an important one; don't be an a$$hole and chase.
If we still had naive governments I'd be all in short, but I think this has been a fantastic lesson in showing what happens when fundamentals disappear and the general risk narrative is the focus point of the market. I spent a lot of time last year wondering why the market went up when the fundamentals were weakening. How little I knew. I was one of those who actually hadn't a clue about how markets work - thinking the data is all that matters. This crisis has taught me some serious underlying market lessons; the main one being what you said in a previous post that sums it up well; 'by the time you've seen the data, it's too late'.
Leighan, I have seen some really experienced traders get shaken off positions in this market. The bands have expanded so violently, people are having trouble hanging on.
great insights about how you are adapting.
I liked your comment about "naive governments." That's basically why I can't advocate assuming it's going to get worse. It probably will from a humanitarian point of view, but I just worry that the Central Banks are throwing so much at this problem, it will be tough for asset prices to go down. Have you heard anyone say, "we can't do that, we have no money." I haven't. All I have heard is "we will do whatever it takes."
Thanks for sharing your views!