Continue reading...It is not a mystery that in the financial markets there are two distinct groups, those that make money a large portion of the time (banks and institutions) and, on the other side, those who don’t (the general trading and investing public). These folks tend to struggle to keep up with market returns at best; or end up washing out and losing all their money at worst.
On Wall Street, the cohort that makes money consistently is referred to as the smart money and the aforementioned latter group is referred to as, let’s just say, not so smart money. To be fair, the vast majority of retail traders and investors, through no fault of their own, just don’t know how financial markets really work. They’ve bought into what all the trading books tell them to do, as well as the media and Wall Street. They also fail to recognize that trading is a skill that is learned by not only reading books on the subject, but also through education, active participation and constant reinforcement.
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