InvestorQ : What do experts mean whey they say we must not question the wisdom of markets?
Abhisha Yadav made post

What do experts mean whey they say we must not question the wisdom of markets?

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Abhisha Yadav answered.
3 years ago
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Well, it happens so often to all of us. A perfectly executed trade backed by mountains of data and back testing and a very sound logic, simply goes kaput. You are shocked that the market is behaving irrationally enough to disprove your eminently enticing logic. As a trader the first reality you need to submit to is that, for better or for worse, “The stock market is always right”.

A stock trader came up to me in 2005 and complained that despite his best efforts and research, he was losing money in the market. Digging a little deeper, we realized that in a market that was in the midst of a gripping bull run, he was consistently trying to short sell the market. He was not wrong. All indicators were pointing towards a correction, but that was just not coming.

Fortunately, the above story had a happy ending. We advised him to just listen to the market, assume the market is right and start trading all over again. He turned long on the market and by the time his stop losses started hitting in late 2005, he had made enough money to cover his stop losses. So what changed? Nothing; except the admission that the market is the king of the trading game, and it is foolish to try and argue with the market.

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