• 206 days Could Crypto Overtake Traditional Investment?
  • 211 days Americans Still Quitting Jobs At Record Pace
  • 213 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 216 days Is The Dollar Too Strong?
  • 216 days Big Tech Disappoints Investors on Earnings Calls
  • 217 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 218 days China Is Quietly Trying To Distance Itself From Russia
  • 219 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 223 days Crypto Investors Won Big In 2021
  • 223 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 224 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 226 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 227 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 230 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 231 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 231 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 233 days Are NFTs About To Take Over Gaming?
  • 234 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 237 days What’s Causing Inflation In The United States?
  • 238 days Intel Joins Russian Exodus as Chip Shortage Digs In
Joseph Russo

Joseph Russo

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating…

Contact Author

  1. Home
  2. Markets
  3. Other

Adapting to Systemic Dysfunction (part I)

Same As It Ever Was
With the possible exception of Black Swan events, and beyond the amplification and speed with which share prices can persistently collapse following negative episodes of such, there is no difference in navigating markets now (amidst a heightened state of systemic dysfunction) relative to doing so at any other point in market history.

House of PainBlack Swan

Having sad that, we suppose a better title for this article might have been "Why it is essential to maintain sound risk management and if possible, to systematically automate proven technical disciplines regardless of how good or bad prevailing market conditions appear", but it just seemed too darned long.

Every Investment is a Pure Gamble -PERIOD
Specifically relative to ones clearly defined objectives and tolerance for risk, (another way mainstream answers the question of how much of a gambler one may or may not be), it is in our view, far better to be continuously prepared rather than finding oneself in the awkward situation of enduring excessive levels of discomfort while adapting to changing market conditions.

Dice

Be it a Day or a Lifetime
By their very nature and throughout all timeframes, financial markets have always been and shall continue to be notorious for their sudden and dramatic mood swings.

Whether over the course of a single trading session or that of an entire lifetime, sudden and repetitive swings from optimism to pessimism are the core elements upon which share markets thrive.

The House must thrive or there is No Game
Unfortunately, most fail to recognize the nature of the terrain, which suggests that the very core elements upon which markets thrive are those typically responsible for the inevitable deterioration of participants (gamblers) account balances (bankrolls).

Casino exterior

FormulaHappy and sad

Maintaining Tactical Context
Relative to all levels of engagement, the inevitable and never-ending succession of cyclical shifts from optimism to pessimism, and the near-impossible timing of such, makes it extremely difficult for lone participants to position themselves on the right side of trend, not to mention reversing positions when trends inevitably change direction.

Chess

The all too common quandary described above provides testament to the necessity of maintaining strategic disciplines relative to the context in which one has sought to engage in trade (Gamble, Risk, or Speculate) for his or her own benefit.

America
The land of innovation and entrepreneurial spirit could not exist without risk and high stakes gambles. Simply put, innovation is born of extreme risk and intense speculation. Nothing ventured, nothing gained - and to that we shall add, nothing lost - except earned freedom and limitless opportunity.

Founding fathersHand
We The People ...

Casino Interior

One Big Casino (always has been - always will be)
Be it the long-haul investor hoping to cash out with a big retirement bounty after buying and holding for 20-years, or the day trader looking to scalp a day's wage by the end of a trading session, each are gambling on a future outcome to their benefit.

Casino Interior

Tipping the Odds
Despite the greater odds of coming out ahead over a 20-year period vs. a single trading session, there is NO GUARANTEE that such odds will deliver. Just ask those who in 1989 bought and continue to hold large portions of their retirement nest eggs in the Japanese Nikkei Index. After 21-years, the Japanese stock market is still down some 70% from its all-time highs.

Nikkei Chart

Pervent return

Find a Reliable Compass

Accurate charting and forecasting provides traders and investors with one of the most essential tools of navigation, a compass. A professional chartist should be able to forewarn his or her readers of any potential obstacles ahead, and then quickly reorient them upon moving through such waters with specific contingency for their preferred method of travel and comfort.

Compass

No Surprises
Market shocks, sudden shifts in trend, temporary panics, or true Black Swan events, should never come as a surprise for those who employ the services of a chartist who is worth his or her weight.

In part-II, we explore how this chartist plots a course in real time, and we shall reveal precisely where this chartist believes we stand (in Elliott terms) in the grand scheme of things.

Until then,
Trade Better/Invest Smarter

 

Back to homepage

Leave a comment

Leave a comment