18 April 2017

Qns: Why is trading so hard?


Trading is hard because it is the ultimate case of a competitive market.  If there was an easy way to trade and be profitable, everyone would start doing that, and prices would move accordingly so that's no longer the case.

In the case of a "buy low, sell higher" strategy -- you can try to come up with concrete trading rules that reflect that.  For example, buying at a 30 day low and selling at a 30 day high can be one option.  However, as you will see, this doesn't necessarily lead to profit, and the long-term performance of such a strategy might be marginal at best.  That's because markets are close to being a random walk, so buying at a local low point doesn't mean there will be reversion back, it might be as likely to go further down as back up.
//amazon