Have you experienced this?
There are times when a tradeable asset makes a fast move, contrarian to your belief. Since, it's contrarian to your belief, you are not positioned to take advantage of it. Worse, sometimes you have a reverse trade in place. These disbelief trades can inflict huge amount of financial and emotional pain. The stock keeps making the move and you remain in denial that this cannot be true.
Indian Economy is in Bad Shape - Market cannot go up - so Lets's short
Belief: This rally is not fundamental rally. So, lets short it. And then as market keeps going higher - both the disbelief and pain keeps rising.
Trust Price Action > Personal Belief
The market is a forward looking mechanism and expectations are generally priced into markets. The market generally reprices the surprise and hence it's important for a trader/investor to be vigilant to new sources of surprise. What market does is far more important than what it should be doing. Keep your eyes open and trust the market action and not your brain because that can be very painful at times.
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers