What's the most counter-intuitive thing you learned in trading?

interesting, seems timely for quad witching day

is this spreadsheet supposed to illustrate volatility skew with put option premia more expensive than call premia

 

That you do not see them does not mean they don't exist. Many of us trade patterns for a living.

 

The challenge is learning to see price development through one's own eyes. Textbook or workshop examples or even back testing processes are not the reality of day to day price discovery. That is what takes great effort and time, and it may well not be something for everyone. You have found what works for you and that is the important thing.

 

Quite so, my style is algorithmic.

 

The harder i try to make money the more i lose. Good trading should be effortless and money an afterthought.

 

It just isn't.

By no stretch of the imagination, and within no sensible, everyday frame of reference is "people see patterns where there are none" any kind of "definition" of the word "counter-intuitive" at all. It may be an example of it, but it's clearly not a definition.

It's perfectly true and valid that many people see patterns where there are none, of course - I'm not disputing that for a moment - "misattribution of causation" is one of the commonest mistakes made, both in everyday life and in trading.

But it's also true that many of us are - directly or indirectly - trading patterns, of one kind or another, for a living. The fact that people think they see a lot more than there really are clearly doesn't signify that there aren't any.

 

"People see patterns where there are none" is not the same as saying "there are no patterns" gees you pattern spotting guys are touchy

I have respect for all who make money trading I do it myself algorithmically, if there were no patterns I would not be able to do that.

 

Buying a strong stock on a pullback used to be very difficult for me. I used to be one of those guys who thought the trend was reversing, so I'd get short. Now I'm buying from those guys and just riding the wave. It also helped to have a systematic method for finding an entry point, since that old trend reversal demon still taps me on the shoulder once in awhile.

 

1. Balls count more than brains.
2. Buy when it is going up, sell when it is going down.

 

1) The less confirmations/signals you use to enter a trade, the greater your odds for success.

2) Typically the best short op looks like a great long and the best long op looks like a great short.