Sunday, January 21, 2007

Life is Random.

I have been doing a lot of thinking on trading.

The more I look, read and think about the market the more I believe that the market's actions are completely random. Its behaviour is unpredictable, and that no single reason predominates.

No matter how convincing the argument, the outcome of the choices we make is uncertain. Whether we use TA, FA or a combination of both to forecast the price movements of a warrant or stock, it is only a guess.

When we risk our hardearned money on a trade with an uncertain outcome, it is in fact a gamble.

Therefore more thought should be directed at generating good trading signals, determining the optimum amount of wager per trade and the risk undertaken for a winning trade.

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