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To be a good trader, ignore what other people say

I have a problem. I spend too much time and have given too much attention to financial news and to what Twitter gurus say about the market.

Every morning when I wake up, I check the financial news to see if anything has happened overnight. Every day for the past two months it’s been the same old story: a potential US-China trade deal lifts the market. Every single day, the same headline is regurgitated.

It doesn’t feel right

Surely this can’t be right. I had a sense that we weren’t going to get a China trade deal soon after listening Donald Trump’s trade advisor, Robert Lighthizer’s testimony to the Senate. I also don’t think this a unique observation.

I’ve grown frustrated with this narrative, and I don’t believe that’s what is powering the market up words. According to a recent story from the South China Morning Post, a potential Trump-Xi meeting probably isn’t going to take place until June at the earliest.

Fast Money

At night I like to see what the “gurus” on CNBC’s Fast Money say about the market. As an independent trader, this is one of the way I can get an idea of what others are saying about the market. But this didn’t leave me satisfied.

Finding reason on Twitter

In an effort to find out what is with really going on in the market, I turned to Twitter. I began to follow a lot of Twitter “gurus” to see their thoughts. While they give a good effort, many of these guys have been very wrong too. Fact is, a ton of perma-bears have decent followings on Twitter. I’ve been following a few of these bears over the past two months as the market has ripped higher and higher.

Manipulator in Chief

Many of these bears complain about how the market is manipulated, blame the plunge protection team, and blame Donald Trump for influencing sentiment following algorithms with his tweets and headline-making quotes.

I have no doubt that Donald Trump is more obsessed with the stock market than any other President that we have ever seen (at least publicly). However, I find it hard to believe that he is single-handedly manipulating the market when you consider millions or possibly billions of players in the market today.

Even if I’m wrong about this, it doesn’t change what is happening in the market. I must better learn how to roll with the punches.

Even if Trump manipulates the market, it’s up to me to see that and use it to my advantage to make money.

To succeed, you must trade the market that is given to you

At the end of the day, to succeed in the market, I must understand that the market can stay wrong longer than you or I can stay solvent.

I think you can gain some insight from reading financial news and hearing people discuss the market on Twitter. But it’s important that you develop your own instinct of the market and use this mental model to come up with an honest assessment of the market. It’s important that your mental model fits your personality and your beliefs about the world.

It’s possible for two people to have two different approaches to the market and still make money. It’s happened for years and will continue to happen.

No more “gurus”

It’s very easy to get caught up in the convincing charts that perma-bears post on Twitter every single day and fool yourself into believing that your short position is the right position to be in at this specific moment in time. I know because that’s what I’ve been doing to myself. And that’s on me. I own that.

It’s a fool’s errand if you rely on gurus to give you hidden insight into the market. At the end of the day, we’re all players in the giant ocean that is the stock market. The most important thing you can do is watch the movements of the waves and try to catch the ones that you believe in the most.

For this reason, I’m working towards ensuring I don’t give too much attention to financial news or what individual people think of the market, because I find that it has been skewing my own perspective and my own beliefs about the market.

More signal, less noise

We live in a world where there is so much noise, and separating the signal from the noise is one of the hardest things to do. The solution to noise isn’t by adding more noise but to take noise out of the equation.

From this day forward, I’m going to make an effort to give less of my attention to the financial news and instead focus on those few things that really matter and move the market today.

This isn’t mean to be self-righteous, but more so a reminder to myself (and for your possible benefit) to develop a system and expectations of the market, carefully track those expectations from day-to-day, look for any divergences between those expectations and what’s actually happening in the market, and adapt accordingly. Because at the end of the day the markets and gurus don’t care if I make money. That’s on me.

Do or have you watched any financial news or Twitter gurus? Are you a recovering news follower? Let me know with a comment below.

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Author: Trader Court

CPA first, pivoted to python programmer focused on data science which I apply to my own stock and options trading.

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