Uncertainty is The Only Certainty
| On this day - 12 December 2015 |
Uncertainty is The Only Certainty
- By Apurva Sheth
An uncle from our society asked my friend, a proprietary trader, 'Kya Lagta Hai GST Pass Hoga?' My friend nodded his head in denial and said, 'Chances of GST [Goods & Service Tax] bill passing in parliament look thin. But more than that, we are concerned about the Fed meeting scheduled on 15-16 of this month. We are fed up with the hike or no-hike scenario every now and then. Its better if the Fed hikes rates and brings an end to this saga...so markets can move on.' My friend was clearly desperate and hopeless throughout this conversation, which was understandable as the market environment has been very challenging over the last few months. It is difficult for traders to make money during such periods. Traders hate uncertainty as it limits their profit potential. But it's quite naïve to think that after the Fed hikes rates all uncertainties would end. Markets and media will soon come up with some other events to focus on. From tapering to the fiscal cliff and the debt ceiling to rate hikes - haven't we seen one major event after the other? These events have hooked everyone in the past, and the moment one event is over another springs up. The point that a trader needs to remember is that you can never completely remove uncertainty from the markets. After all, uncertainty is the reason markets exist. Uncertainty leads to a difference of opinions. Markets exist only because there is a difference of opinions. If everyone thought in the same fashion, then we would either have buyers or sellers. For a market to operate, you need both. The key here is to be prepared for not only the events we know can bring uncertainty but also for the unknown events. Stocks can collapse 10% or 20% in a day. You cannot predict the reason for such sharp cuts, but you can prepare well in advance. John Allen Paulos rightly said, 'Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security.' Are you concerned about the Fed rate hike scheduled later in the week? Share your views in the Club or share your comments here. |
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Apurva Sheth (Research Analyst) is our lead Chartist. And he is very passionate at that! A technical analyst with substantial experience, Apurva follows an integrated approach when it comes to his trading picks. He draws logic from different school of thoughts covering both classical and the contemporary techniques of technical analysis. He is a Chartered Market Technician (CMT) and a member of the Market Technician Association (USA). In the past, Apurva has helped banks, mutual funds, insurance companies and FII's among others make profits based on his recommendations. Apurva was also regular guest/contributor on Zee Business and The Economic Times.
As part of the Daily Profit Hunter team, Apurva is focusing all his efforts on ensuring that you, his readers, regularly get access to actionable, and profitable, trading opinions. And he is doing this using his own proprietary process, which has been proven to work over the years.
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