The supreme algorithm and the spider web


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So everything seems perfect. Macroeconomic data is so awesome, interest rates have just been lowered again by the major central banks, every piece of data suggests a rise in the equity markets. You of course take a long position. And the market does not react for some time, what i call a spider web. So many insects take a long position, and of course get trapped. Then what do you think happens? The spider comes and eats everybody. In other words, when an extremely logical situation presents, there is an algorithm that detects it. He knows that there is much money to be made on the anti logical side. After the trap is set, huge amounts of capital start shorting the market till it falls at the level almost no one is short. Then the market does what it should do - rise. You are advised, when a situation is too logical and nothing has happened you are in front of the spider trap.


Lesson : Be careful when a situation is too obvious!.


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