What are your beliefs? What do you think drives markets?

M

meanreversion

Senior member
Messages
3,398
Likes
538
If your approach to trading is mainly technical, what exactly do you believe is driving the market? Is it the belief that trends keep recurring, and attempting to get on board? Or maybe that markets are fundamentally mean reverting? Or is it possible simply to construct a set of rules which backtesting proves are profitable, and then go and trade them?

Is it important to trade a belief system?
 
I do believe that you have to at least not trade contrary to your belief system as doing so will probably end up in tears.

Beyond that, all of the above are potential belief systems, and not necessarily mutually exclusive.
 
I dont care why the market moves, as long as it moves...

sometimes it seems obvious, sometimes not... makes no difference... !!!

you would have need a wild imagination to concieve a non repeatable pattern in any market.. given the parameters to work with (i.e price moves up or down and major news generally comes at the same time each week / month etc.) everything would create a repeatable pattern in the end..

Perhaps sit back and try to imagine a market without a non repeatable pattern ? let me know how you get on... :)
 
Some instruments are cyclical some of the time but none are all the time. This may manifest as trends which can be exploited. That's my experience and therefore belief, because it is evidence-based.
 
My opinion on why the market moves?
Get a piece of paper with two columns and write supply in one and demand in the other. Then list everything could drive the each one in its respective column and bang! market solved. Start now. You can write it into your will and testament that your incomplete list should be posted on t2w after your death.
 
Totally believe that reasons moving the market dwell far beyond my reach.

What I can see are their reflections, e.g. watching the book for supply/demand, or price patterns or whatever.

If Ben Bernanke would ring me today before his speech, Alan Greespan used to have a brunch with me, Gary Stern were one of my poker-play fellows, playing golf with Timothy Geithner were something usual for me, Jean Claude Trichet used to consult my opinion before buy their suits, or Mervyn King called me every time he had a problem with his wife....

then...

do you think that I would need not even take a look at the chart to put my orders?
 
well you could say the market maker, but his actions are derived from the laws of supply and demand, more buyers means that there isn't enough liquidity to buy into, thus he must increase the price to increase the sellers, and to create equilibrium
 
Well, every time I log in to MSN, the euro falls. Every time I walk away, the euro climbs. Ask Masq, he'll tell you.
 
What drives markets ?

The sum total of it's participants actions, no more, no less.

If more are buying than selling price follows the path of least resistance by rising, vice versa when more are selling, and you get choppy sideways stagnation when both sides are more or less in equilibrium.
 
money flow

net increase in money in the market = higher prices
net reduction in money in the market = lower prices

eg: market = 1000 units
money in market = £1000
therefore each unit is "worth" £1 whatever its "true" value may be.

market = 1000 units
money in market £1000 + £500 new money = £1500
therefore each unit is "worth" £1:50

jon
 
Technically Fundamental said:
How do they help provide this liquidity and stay profitable? :confused:
Click to expand...

Providing liquidity is exactly how they are profitable. The more times they can buy at the bid and sell at the offer the more profitable they will be. That's why they will tend to move their quotes (as a collective since any individual MM will have specific considerations) toward the levels viewed most likely to drive transaction flow.
 
meanreversion said:
If your approach to trading is mainly technical, what exactly do you believe is driving the market? Is it the belief that trends keep recurring, and attempting to get on board? Or maybe that markets are fundamentally mean reverting? Or is it possible simply to construct a set of rules which backtesting proves are profitable, and then go and trade them?

Is it important to trade a belief system?
Click to expand...

people
but I believe someone already said that
 
MOOD.....this drives the markets.You have special talent when you can predict/feel mood.
 
The little baby jesus makes the markets move using his giant market etch 'a' sketch.

or maybe it's just supply and demand........
 

Attachments

  • etch-a-sketch.jpg
    etch-a-sketch.jpg
    17.4 KB · Views: 172
You must log in or register to reply here.

Similar threads

R
Beliefs That Sabotage Traders
2
Replies
32
Views
21K
foroom lluzers
F
Martin Cole
  • Article
Psychology Are Your Trading Beliefs Working for or Against You?
Replies
2
Views
3K
MikeMcB
M
Dr. M. Woodruff Johnson
  • Article
Psychology The Power of Belief
Replies
7
Views
4K
Kamemon
K
Dr. M. Woodruff Johnson
  • Article
Psychology Beliefs: A Source of Great Power But Be Careful
Replies
2
Views
4K
foroom lluzers
F
lurkerlurker
What makes a weak hand?
2
Replies
26
Views
6K
gerryg
G
Top