WORDS TO TRADE BY

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“The stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions.”

― Seth Klarman

Investors like to overcomplicate trading. But in all honesty, the market is just a combination of economic cycles and human psychology.

The markets react the way they do because of how humans react to news and information. It’s a collective institution that moves based on human emotion and intuition. That’s why volatility is so rampant in a market when big news, good or bad, dominates the headlines.

This tends to create a collective system of overreaction. That's why you must have a calm and focused mindset that controls your emotions when you're trading. If you fail to stay rational, the market will snatch away as much of your money as it can.

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