The first thing to understand is that there are probabilities at work. A trader with 55% winning days will average two or three 5day losing streaks per year and probably one 6day losing streak. A 6 day losing streak is enough to make the best trader feel like a complete moron. But he isn't. It's just probability

[Markets with bearish sentiment without many positions is primed to fall as new entries reflect their perspective, whereas with many positions is more st risk of reversal as there may be no one left to sell.]

['Buy the rumour, sell the fact' refers to markets pricing in an event ahead of time and then reversing when it takes place. Often the moment of a news release is the apex of this sentiment and you may notice counterintuitively that good news getting priced in over time ends up reversing on its announcement]

Instead of gyrating back and forth for a while before finding equilibrium, the market now finds equilibrium very quickly after the release of economic data. Hedge funds and banks use regression analysis before the data release to estimate how far each asset should move on various outcomes and they execute trades via algorithm at the moment of release. They will buy or sell until all asset classes are approximately in line with where history suggests they should be and this will happen in microseconds. There is nothing left on the table for the human traders because all the liquidity in the market is hoovered by the bots in the first few microseconds.

[P&L targets remind you of the point where your job is done and so to book profits rather than increase leverage.]

[If the average moves on two instruments are respectively 1.2% and 0.6%, you wouldn't want the same position size in both.]

[The market only cares about how economic data releases compare to expectations; so not in relation to last month or year but rather the median awaited by economists and traders.]

[When markets react to old or random news, focus more on what's happening rather than whether it makes sense.]

[If you backtest and find an optimal moving average that worked in the past, that doesn't guarantee success in the future. Better to pick what fits your timeline granularity.]

Trading is a serious intellectual pursuit that is also incredibly fun. The joy of attempting to solve an unsolvable puzzle. A nearly impossible daily test of discipline and selfcontrol. An endless emotional rollercoaster of instant feedback, frequent disappointment, sudden euphoria, and nearly unbearable periods of crushing selfdoubt.