Why is it said that market trading is not a science?
In my view, a common misconception in today's capital markets is treating market trading as a subject of scientific research, attempting to control the entire trading activity through so-called rational technical analysis and fundamental analysis methods, hoping to achieve stable profits.
In fact, anyone who trades with such a mindset, aside from those who might be a bit lucky and earn some money, the vast majority are losing money, even losing everything, ultimately being kicked out of the market.
According to the rules of the trading game, if we apply the 80/20 rule to explain the profit and loss status of traders in the capital market, at least 80% will lose money, while at most less than 20% will profit. After years of market experience, I believe everyone is very clear that the actual situation may be even worse than the 80/20 rule; perhaps 80% of those who earn money among that less than 20% of profitable traders eventually return their earnings to the market.
From my observation, those losing money in trading are mostly faithful adherents of value analysis, fundamental analysis, or technical analysis. Among them are many highly educated professionals, including PhDs and Masters, many of whom are very intelligent and have put in considerable effort, read countless books on trading, and conducted in-depth market research, yet the final result is still failure.
Therefore, when we observe this phenomenon, we are shocked and must seek the root cause. Starting from actual trading, we carefully analyze and study traditional trading theories, observe the thinking patterns and behavioral characteristics of both successful and unsuccessful traders, and apply Eastern and Western philosophical thoughts to explore the intrinsic nature of market dynamics and trading behaviors. The results of our research are shocking, and ultimately we believe that it is precisely those so-called traditional trading theories and techniques that have misled almost all traders, especially those who have fully accepted Western economic education, a generation of so-called financial talents cultivated by Wall Street, who are deeply harmed yet remain unaware.
In fact, in the field of financial capital trading, a common phenomenon is that the higher the education level, the poorer the practical trading ability.
I believe that anyone who has been deeply involved in capital trading will ultimately realize that capital trading is a wealth game filled with mysteries, difficult to grasp and unpredictable. No matter how much financial knowledge you have, once you sit in front of the computer screen, facing the ever-changing market trends, all professional knowledge and theories immediately seem redundant.
Unless you can perceive the rhythm of market trends like an artist, you will not be able to place trades.
Every time you act, you make a mistake; every time you act, you reverse and lose... The reason lies in not understanding the art of trading. Trading is an art, not a science. Mature artistic behavior not only requires specialized training but also requires insight and cultivation, so not everyone can become an outstanding artist.
Scientific knowledge and technology, in principle, can be mastered by anyone with normal intelligence through learning and training. For instance, driving a car or a boat, or even flying an airplane, generally anyone can become competent after training. In the scientific field, as long as one operates according to certain technical specifications, they can perform well and complete tasks.
However, trading cannot guarantee that even with professional study and training, and a complete trading manual provided to you, you will definitely make money. Professional knowledge and training are merely necessary conditions to become a professional trader, not sufficient ones.
In front of the market trends displayed on the computer screen, a financial professional with a PhD does not have much of an advantage compared to an ordinary trader with only a high school education. Sometimes, expertise can actually become a perceptual barrier, shielding traders from their intuition about market trends, causing them to lose their touch and misleading them into the trap of purely rational thinking.
Among all the misconceptions in trading thinking, the most fundamental and common one is the proposition we focus on in this discussion: market trading behavior is not a science.
I know that many people do not agree with this viewpoint. If this proposition is valid, then more than 90% of the books about market trading in bookstores should be sent to recycling stations, rather than left there to continue tempting people to trade.
I will continue to explain from three aspects why market trading behavior is not a science. First, I must clarify that this is just my personal opinion and a solitary statement, presented for everyone's reference; please judge for yourselves.
First, the commodities traded in the financial capital markets have surpassed the concept of material wealth; they are products of human thought with uncertain characteristics of spiritual matters, representing a form of non-material wealth medium.
Whether it is margin trading in foreign exchange, financial futures, commodity futures, or stock securities, in essence, the objects that traders are trading are special goods with electronic or informational characteristics, or in other words, virtualized entities. These informational goods are products of human spiritual activities, characterized by general features of human spiritual activities, surpassing the scope of contemporary scientific cognition, and are things that modern scientific thought and technology cannot grasp.
In Western society, matters related to the spiritual realm are usually left to God to resolve, or explored and studied by thinkers and philosophers. Only those entities that exist in material form are subjects for scientists to analyze and study. Once a scientist's research delves into the essence of material things, they simultaneously become a thinker or philosopher. For example, Newton ultimately became a devout religious figure, and Einstein was both a great scientist and a natural philosopher.
We know that science and technology are the concrete applications of scientific knowledge and principles, meaning the premise of applying science and technology is having a definite understanding of a thing, as well as a correct and complete understanding of its changing laws. If a thing itself is something that science cannot comprehend, or is non-scientific, then we obviously cannot directly use scientific and technological methods to solve all the problems arising from it.
Traders in the financial capital market face the same issue. Because investment or speculative trading is a non-scientific endeavor, most traders attempt to operate trades using so-called technical analysis and fundamental research methods, leading to inevitable failure.
These days, I am preparing for the launch of a divine single!!!
Comment 168 to board!!!
