never trade retail...

uncertainty is a fundamental reality in trading. the best we can hope to achieve, under any circumstance, is an incomplete, but probabilistic knowledge of that environment. most new traders neither understand the markets are dominated by chance and randomness, nor possess the ability to cope with the day-to-day gyrations of the market. the natural inclination is to find a comfortable resolution and a shortcut to order amongst all the chaos, while never understanding the structure of its source. ironically, they tend to herd with other naive neophytes into a socialistic like trap, incorporating cliched and anachronistic methods, strategies, and approaches to the market. like churchill remarked, it is a philosophy of failure, and a creed of ignorance, whose inherent virtue is the equal sharing of misery. paradoxically, the less they really know and understand about the market, the more they think they know, and the more likely they are, to have a predictive bias to the market.

as previously mentioned, strategies with the greatest commitment to predicting the future, maximizes the probability of failure. trading today's markets requires a new approach that must be built on an analytical framework that is relevant to current drivers of price. what dramatically distinguishes today's markets from yesterday's trade, is market structure and fed policy. to a very large extent, price action is no longer controlled by humans, and to an even larger extent, price action has been contaminated by qe/zirp. unless we see a return to normal levels of human market activity, and an absence of artificially controlled markets by the fed, we will never see markets that even bear a resemblance to markets of the past, nor will yesterday's approaches to market analysis ever be applicable again.

how traders cope with probabilistic uncertainty and their imperfect view of the market is critical to their success. incorporating relevant informational signals from a wide range of deterministic processes is the foundation for a trader’s success. this means resisting the sirens' call to assign causality to traditional ta patterns, trend-lines, fibs, and other hackneyed tools that were created for highly auto-correlated markets, driven by human decisions and real risk/reward considerations. the new-normal approach begins with recognizing the current dynamics of liquidity provision and developing an informational framework with signals that reflect the machine driven reality of hft, along with an understanding of the the impact of qe/zirp and risk-on/risk-off on relative value and carry strategies. there is a right way and a wrong way to deal with the inherent fuzziness and noise in today's markets, and without the right tools and the proper perspective it's easy for human decision makers to be misled by the machines and policy makers. or, you could just wait for a head-and-shoulders top, trend-line resistance, or a moving average crossover to get short, and then hope and pray.