Uncertain Markets?
I hear this term thrown around a lot by people either hoping to hock something or by market analysts who really don't understand at all what an uncertain market is. The term itself is misleading, I mean when have the markets ever been certain of something. Can you recall a time when you had no doubt at all about a trade?
I can't.
So let's put this loosely used term to rest once and for all. The markets are never certain. If you don't understand that then you probably should never execute a live trade. The markets give you what you deserve not what you expect. You have heard me say this a number of times through the years.
In a long term sense one might say that the markets are certain. They will either move towards your profits or your stops. It is that simple. You can be sure of that. There is no grey area this way. Given enough time your stop will be hit or your profits will be taken. Time is the key.
Have the markets even done anything really out of the usual for the past ten years?
Not really they have stayed in a range that has resulted in a bull market for the past ten years or so. Nothing really unusual there. Yes there have been a few hick ups but nothing that I would call substantial. The bull has chugged along without pause.
So where does uncertainty come in?
When you are trading short term or daily the markets are indeed uncertain and very uncertain. That is because you put yourself in the line of fire. In that case you don't really know whether you are going to be hit or not. That makes things uncertain. In the short term you really don't know whether price is going to rise or fall or a combination of both.
Certainty is taken out of the markets when you look out. It does not remove it entirely but it reduces the amount of uncertainty that you are exposed to.
So when you are thinking of uncertainty think of it in terms of time. Time is what makes the markets either more or less uncertain. Not some random news or talking head.
Next time you hear about uncertain markets keep in mind that time is on your side. Cheers!
I can't.
So let's put this loosely used term to rest once and for all. The markets are never certain. If you don't understand that then you probably should never execute a live trade. The markets give you what you deserve not what you expect. You have heard me say this a number of times through the years.
In a long term sense one might say that the markets are certain. They will either move towards your profits or your stops. It is that simple. You can be sure of that. There is no grey area this way. Given enough time your stop will be hit or your profits will be taken. Time is the key.
Have the markets even done anything really out of the usual for the past ten years?
Not really they have stayed in a range that has resulted in a bull market for the past ten years or so. Nothing really unusual there. Yes there have been a few hick ups but nothing that I would call substantial. The bull has chugged along without pause.
So where does uncertainty come in?
When you are trading short term or daily the markets are indeed uncertain and very uncertain. That is because you put yourself in the line of fire. In that case you don't really know whether you are going to be hit or not. That makes things uncertain. In the short term you really don't know whether price is going to rise or fall or a combination of both.
Certainty is taken out of the markets when you look out. It does not remove it entirely but it reduces the amount of uncertainty that you are exposed to.
So when you are thinking of uncertainty think of it in terms of time. Time is what makes the markets either more or less uncertain. Not some random news or talking head.
Next time you hear about uncertain markets keep in mind that time is on your side. Cheers!
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