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Once you’ve spotted some key contextual information like in the example above, you’re well ahead of many other traders. But in most cases it’s not enough information in isolation to decide on how you want to trade.
Simply saying “well I think I’m going to only be looking to go short now” is in fact a dangerous game to play in itself.
Clearly it’s possible for markets to move at times, virtually in one direction with few pullbacks. But in reality this is rarely what happens.
Markets tend to move far more like buses than planes.
Buses stop in a range of locations checking for passengers and are rarely the quickest in getting to where they are going.
Planes tend to fly in a relatively direct path.
The point is that even if you’re confident of the overall market direction, you can’t be totally sure of how it will get there.
Simply saying “well I think I’m going to only be looking to go short now” is in fact a dangerous game to play in itself.
Clearly it’s possible for markets to move at times, virtually in one direction with few pullbacks. But in reality this is rarely what happens.
Markets tend to move far more like buses than planes.
Buses stop in a range of locations checking for passengers and are rarely the quickest in getting to where they are going.
Planes tend to fly in a relatively direct path.
The point is that even if you’re confident of the overall market direction, you can’t be totally sure of how it will get there.