We been told “An Investors/Traders to be successful in Financial market one should have radical approach, unique trading methodologies” So I put bunch of question to my readers possibly it could help you in re-think about your trading style.
Most of us invest based on our gut feeling or intuition also called instinctive impulses.Psychological factors such as greed ,fear ,hope and pride or Ego dominate our investing decisions.We sometimes go by tips or advice of some body or jump with news on TV or news papers.Our assumption of certainty of outcome is based on knowledge gained from various sources which we tend to believe or just give a try.This is irrational investing process as certainty of outcome is based on our belief of information where outcome is always binary and not predictable.
Nineteen-year-old Monty spent the afternoon day-trading penny stocks because his prefrontal cortex isn’t yet fully developed and he couldn’t recognize risk-reward trade-offs if they hit him in the face. This introduces to dangers and demands of trading on your finances and personal health ,spirit and wellbeing which most traders are not even aware.
Any persons today involved in buying and selling stocks or future or commodity calls themselves traders. If you are someone who is been involved in stock market trading be it from a week ,a month or a year or many years if u have not been able to profit or make consistent returns from your trading here is a reality check to find out why?
Random-walk theorists usually start from the premise that the major security exchanges are good examples of “efficient”markets. An “efficient” market is defined as a market where there are large numbers of rational profit-maximizers actively competing, with each trying to predict future market values of individual securities, and where important current information is almost freely available to all participants.
Shanon’s Daemon is based on the theory manifested by Claude Shannon. In the 1940s, the great genius conducted an experiment also known as Shannon’s Demon and it proved that it is possible to yield a profit from the random market conditions, but you need to make sure that it is volatile in nature.