T2W Bot

Staff member
1,454 54
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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trendie

Legendary member
6,232 1,007
Overall, a generic overview.
No real info of note.

One bit that seemed wrong:
"... Bad headlines are triggers to sell for most traders, while good news on the economy serves as an invitation to the general public to buy. "

I thought smart money bought "when there was blood on the streets" (I think Warren Buffet may have said that)
My understanding was smart money sold on exuberance, and hoovered up cheap assets when the headlines were grim.

Anyway, apart from that piece of pedantry, it was a solid 6/10.
 

new_trader

Legendary member
6,231 1,282
Overall, a generic overview.
No real info of note.

One bit that seemed wrong:
"... Bad headlines are triggers to sell for most traders, while good news on the economy serves as an invitation to the general public to buy. "

I thought smart money bought "when there was blood on the streets" (I think Warren Buffet may have said that)
My understanding was smart money sold on exuberance, and hoovered up cheap assets when the headlines were grim.

Anyway, apart from that piece of pedantry, it was a solid 6/10.
It was not wrong, you quoted out of context. The article says:

A surprising aspect of how institutions buy and sell the markets is that, like any good merchant, they tend to buy markets when they are down and sell them when they are high, the average investor usually does the opposite. Bad headlines are triggers to sell for [average traders], while good news on the economy serves as an invitation to [average traders] to buy. The Smart money understands this, as they can spot this behavior every day through the market-making operations.
 

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