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Trading Traps or What is Obvious is Obviously Wrong Peter Borish

Trading Traps or What is Obvious is Obviously Wrong Peter Borish. Uncertain Waters Ahead.

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Trading Traps or What is Obvious is Obviously Wrong Peter Borish

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  1. Trading Traps or What is Obvious is Obviously Wrong Peter Borish

  2. Uncertain Waters Ahead “When anyone asks me how I can best describe my experience in nearly forty years at sea, I merely say, uneventful. Of course there have been winter gales, and storms and fog and the like. But in all my experience I have never been in any accident of any sort worth speaking about. I have seen but one vessel in distress in all my years at sea. I never saw a wreck and have never been wrecked, nor was I ever in any predicament that threatened to end in disaster of any sort.” E.J. Smith, 1907 Captain, RMS Titanic

  3. What’s Obvious is Obviously Wrong • After the fact, there is always a reason. Price make news not the other way around • I may have been wrong, missed something but in retrospect it is crystal clear • As an analyst, I can explain things perfectly – As a trader, I need to focus on uncertain tomorrow • “If you drive looking in rear view mirror, you’re bound to hit a light pole.”

  4. Staying Ahead of the Curve • “Being so critical, I am often considered a contrarian. But I am very cautious about going against the herd: I am liable to be trampled on. • According to my theory of initially self-reinforcing, but eventually self-defeating trends, the trend is your friend most of the way: trend followers only get hurt at inflection points, where the trend changes. • Most of the time I am a trend follower, but all the time I am aware that I am a member of a herd and I am on the lookout for inflection points.” • George Soros, Soros on Soros, Staying Ahead of the Curve, • September 1995.

  5. "If I could figure out a way to determine whether or not people are more fearful or changing to more euphoric, and have a third way of figuring out which of the two things are working, I don't need any big mathematical models of forecasting the economy.  I could forecast the economy better than any way I know.  Forecasting 50 years ago was as good or as bad as it is today.  And the reason is that human nature hasn't changed." Dr. Alan Greenspan

  6. Probable Outcomes • Fundamentals aren’t wrong – your interpretation is wrong • “The markets are always right” • Trading and risk management are inherently unnatural characteristics • Batting average is relatively low - must have risk/reward ratio • Are you making money? • Don’t use consensus to justify position in market

  7. Possible Inflection Points • Widely disseminated news that seemingly comes out of nowhere • You don’t have to be a weatherman to know which way wind blows • On lookout for inflection points

  8. Globalization Can Not Repeal the Laws of Trading • Entrance is easy – Exit is hard • Adding markets is not necessarily diversification • When accidents happen they tend to occur in all markets simultaneously • No pain when looking back from a positive outcome

  9. If You Survive, You Win • Longevity • Want to have approach that works over time and through market cycles • Don’t get into the habit of looking at the scoreboard

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