Wednesday, May 20, 2009

My Perspective of the Market

I have spent the last two and a half years learning the capital markets. It is truly an amazing collection of people and processes. The one thing that astounded me in my learning was that the markets are based on a very simple underlying mechanism - there are buyers and there are sellers, and that's it. There is little more that makes up the market. any market. Sure there are other factors. But you either have a buyer and seller, both willing, or there is no market. And we have been shown this in spades in the last several years.

So where from here? I got into the market at a bad time, but have maneuvered myself back to a positive position and now await the next move.In the meantime, I decided to study trading. So now I have spent the better part of three months studying, watching, reading and learning some more. And the result has been that this has allowed me to gain a more deep view of the market and how it functions. It remains - a truly fascinating place, including all the qwerks and detours.

But after picking up my kids from school the other day and driving in the first summer long weekend traffic of the year, I had a thought. Six lanes of traffic. All different souls. Gitting the heck outta dodge, cuz that just what you do on a summer long weekend right? Ok, that’s another story. Piles of negative energy exploding from people’s perceived miserable lives. They can beat the system. Cut across three lanes of traffic to take the next off ramp - there’s a quicker way. People constantly changing lanes, crunching up against their new neighbor, urging them to urge the next and the next and the next. And then exiting early. Or entering in too quickly or too late and having to take avoidance maneuvers. Wait. This is just like the market. And I see the volume/time sales chart – and I hear the moderator's commentary in the trading room. Finding the flow, and driving with it. And being ok with the flow that is. Pick your opportunity and take it. Then move onto the next. Quiet, gentle, and peaceful.I am currently reading the Trading in the Zone (Mark Douglas) - again - even more fascinating. Everyone talks loud and hard about the psychology of training, and yet what do you buy and get bombarded with? Free indicator series with your purchase. Layer umpteenth thousand indicators onto your price chart and find the flow. Nary a hint of psychology, unless you count the insane aspect. I feel very fortunate to have been so lucky with my first experience in the trading world. I am looking forward to many years of learning this....trade.

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