The Reasons why you need to think Long Term in Trading – It’s all in the Skew

The key to success in the divergent space is your ability to endure disappointment and continuously manage the downside risk. For most long term successful divergent strategies approximately 90% of trades or so are taken simply to keep the head above water…but the anomaly (say 10% of trades) were what led to the overall strong performance metrics of this solution.

Why it helps to think in terms of Market Efficiency

Accepting that the market is efficient most of the time does two things to your trading psychology. It forces you away from even caring about a single trade to one of simply caring about the next few thousand trades and ensures for your long term survival that you must seriously reduce your return expectations, leverage appetite and focus on risk management.