I always have to laugh after publishing any article that even touches upon politics. It doesn't matter what I write, I know there will be attacks and some of them strike me as hilarious. The reason I think they are so funny is that many of the attacks clearly are made without thought or reason and are simply knee jerk emotional reactions because there is a perception that my political opinions differ from the attackers.
As an example, one subscriber branded me as not credible because he believed that my political opinions were different from his. While we may not hold the same political opinions, that certainly doesn't mean that I should not be believed when I write about the markets and some of those qualities that I think can help people become better traders. I write about those qualities because they have worked for me and generally are unrelated to political opinions. If I am of a different political persuasion does that mean that I should not be believed when I write about managing risk or incorporating an exit strategy into one's trading plan, or for that matter suggesting that a trader should have a plan?
Another "contributor" wrote that I should not ever write about politics because I know nothing about the subject. Perhaps he is right, but I do hold a degree in political science from an Ivy League university, I have run for, been elected to, and served in public office, and I have authored legislation. This same brilliant critic pointed out that the fed is not part of government. I should note that the fed was created by an act of Congress and that the Board of Governors are appointees of the President. Though certainly not one of the three branches of government as set out in the Constitution, the fed is independent within the government simply because its actions do not have to be ratified by the President or legislature, but it indeed has governing power in its regulatory and supervisory functions. Wikipedia, Federal Reserve System, illuminates these functions as follows: "Its duties today, according to official Federal Reserve documentation, are to conduct the nation's monetary policy, supervise and regulate banking institutions, maintain the stability of the financial system and provide financial services to depository institutions, the U.S. government, and foreign official institutions."
Yet another blogger confessed that these free articles of mine that he reads have been informative to him and he intends to keep reading them, but he made sure I understood he would not buy my books because we differed politically. As I interpret that, he is unwilling to advance his knowledge in the trading arena with the purchase of a book because he doesn't like what he thinks my views are in a much different arena. That seems to suggest he will only read trading books authored by those of his same political persuasion. I'm guessing they will be hard to find.
I point out these examples because they all seem to have one thing in common -- lack of thought. The conclusion each reached was based on a perceived political difference that had absolutely nothing to do with the point of my article which was that covert manipulation of the stock market, no matter by whom, is not a good thing for the market IN MY OPINION. What concerns me is any covert manipulation of the market. It destroys the integrity. It results in a playing field that is not level. That is why the government has laws forbidding it. That, in my opinion, is why neither individuals nor corporations nor government should engage in or be permitted to engage in covert market manipulation. Of course the fed necessarily manipulates the market by some of its actions and it is designed to do that but it is designed to do it openly. A change in interest rates, one of the functions of the fed, can certainly manipulate the markets. The markets await fed announcements with baited breath and often move rapidly and sharply based upon such announcements. I have no quarrel with that activity. It is an appropriate function of government.
Last weekend I wrote of the importance of taking action to study and to learn about trading before trading real money. Based on the bloggers to whom I referred earlier in this piece I need to add that the action need be motivated and preceded by thought not emotion. If we are going to succeed in trading, I believe we need to think before we act. Emotional reactivity rarely makes for good trading. We need to formulate a plan and test that plan by practicing before putting real money at risk. We need to know what we are doing in the sense that study must be undertaken, the importance of money management in trading must be understood, an exit strategy should be incorporated in every trade, and an understanding of reward to risk and how it is determined must be grasped. Thinking before acting is critically important in trading as in life. Those who fail to think before acting seldom do well in the markets.
by Bill Kraft, Editor
Copyright 2010, Makin' Hay, Inc.
All Rights Reserved
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