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A thread on the "trick question" pitfall.
My wife & I have been watching Suits, & there's a scene where Rachel is studying for the LSATs. Mike realizes that she keeps failing the test because she "doesn't want to get any questions wrong."
My wife & I have been watching Suits, & there's a scene where Rachel is studying for the LSATs. Mike realizes that she keeps failing the test because she "doesn't want to get any questions wrong."
Rachel is so paranoid about missing "trick questions" that she overthinks even the easiest ones, by always looking for the trick or trap therein.
Mike tells Rachel that she'll pass the test if she stops overthinking it, & accepts that she'll miss the 5% that are trick questions.
Mike tells Rachel that she'll pass the test if she stops overthinking it, & accepts that she'll miss the 5% that are trick questions.
That immediately resonated with me in today's $crypto market. With #bitcoin 
, #Etheruem, $LINK, $DOT,
& a dozen other markets hitting ATHs, there is the temptation to look for a trap
"We're going to pump into the ATH liquidity pool, & then the market will crash & trap everybody
, #Etheruem, $LINK, $DOT, & a dozen other markets hitting ATHs, there is the temptation to look for a trap
"We're going to pump into the ATH liquidity pool, & then the market will crash & trap everybody
I saw the same bad thinking (albeit reversed) in Autumn 2018 on #bitcoin 's break below $6,000.
"We'll breach just below $6k to trap all the panic shorters, & then spring back up again"
The macro pressure that pushed us into $6k was just too strong to be ignored.
's break below $6,000."We'll breach just below $6k to trap all the panic shorters, & then spring back up again"
The macro pressure that pushed us into $6k was just too strong to be ignored.
Do fakeouts happen in markets? Yes.
Do breakout traders get trapped? Sure, sometimes.
But these usually happen on lower timeframes. On a higher timeframe, the macro pressure that pushed the market into that position in the 1st place (ATHS, or down into $6k in '18) is too strong.
Do breakout traders get trapped? Sure, sometimes.
But these usually happen on lower timeframes. On a higher timeframe, the macro pressure that pushed the market into that position in the 1st place (ATHS, or down into $6k in '18) is too strong.
You will make far more money in this market, or frankly any market, if you stop worrying about the "trick questions," and just take the obvious setups as they present themselves.
An ATH break is a very powerful thing, & we will have many more before 2021 is over.
But if you spend all year watching fakeouts, or worse, shorting in anticipation of the fakeout, then you'll miss a dozen easy-money ATH break setups for every fakeout you actually hit.
But if you spend all year watching fakeouts, or worse, shorting in anticipation of the fakeout, then you'll miss a dozen easy-money ATH break setups for every fakeout you actually hit.
