The better opportunities appear in the markets the faster they disappear. The best opportunities attract the largest capital, which has the greatest ability to thoroughly investigate the opportunity and make the most of it.
The entry of the largest players causes:
-
the market shifts (e.g., the big ones exit where everyone else entered the markets before and the movement does not continue - a case where the big ones have a faster signal),
-
signals are still good but there is no liquidity to enter, when you have a signal then there is no more liquidity and when entering the market quickly " moves away" (bigger “adverse move”).
Lessons for traders:
It is reasonable not to treat what we know and have today as the final state of our knowledge, skill and experience.
Keep in mind that what you know today may no longer work tomorrow - as the stories of tens of thousands of traders over the past decade show.
It is worth taking the time to learn new systems, indicators, strategies.
It’s worth it to get a good idea of what your advantage (“edge”) is and try to build on it, because that’s exactly what the best do.
Systemic edge can come from a unique view of the market (you see something others don’t) or better information or better interpretation of information, so you can have a signal earlier.
Mental Edge comes from expanding your own mental strength (mental toughness), which I will write about a lot in the future