Bull markets and reality

This question was sent to me from one of our students: "Hey Joe! I was really a successful trader during the late 1990s. I now can’t trade my way out of a paper bag. What happened?”

Bull markets are not driven by fear and greed, as some would have you think. Rather, they are driven by showiness.

When prices continue to rise, traders begin to feel euphoric - they feel increasingly excited and think the uptrend will never end. That is okay if what they believe is part and parcel with a larger overall plan that looks at actual price data and takes into consideration that reality indicates that an end to the uptrend will eventually come. The plan has to deal with that reality. The trader cannot begin to think that he is invincible, or that it is his own genius that is allowing him to make money in a bull market.

interesting, his inability to trade probably also has something to with in those days the market gave you a five course meal every day, these days your lucky to get a bowl of soup, bring back volatility

Markets evolve. The strategy you were using in 1980s may not be appropriate for today. As the market adapts to the world, you have to adapt yourself. Indeed, volatility is also a big factor. Plus all the technological advances. You need to learn new techniques.

Yes, Mustansir, I agree with you wholeheartedly. That is why I constantly update my books and my trade management.

JR

In the 80s the market makers ruled the UK roost - you couldn't see the orderbook unless you were a pro.
Now with most retail users having Level2 you can see most of the picture (and if you are a broker) you can use things like RSP to see what the big boys are really thinking not the facade they are showing to people.

No system works forever unfortunately and when they fail boy do they fail.