Why a lack of fuel is linked to sports trading
On the walk into the office this morning I passed the local petrol station, there were a queue right out into the road. I saw somebody I knew who had driven in from some distance and he revealed a similar story across a wide area. It’s all down the fuss about whether tanker drivers will go on strike. People are scared that fuel may run out if this happens. You can summarise this situation up quite simply, people are acting on the prospect of scarcity. You see the same thing happening the any trading or betting market.
Say you see the price of something starting to move, people jump in on the basis they feel they are missing out on a move. They feel that if they don’t jump in now, the move and the potential profit will have gone. If they are watching a football match and a goal is scored, they tend to jump in afterwards confessing ‘I knew that was going to happen’, in a Tennis match it would probably be a break of serve, in a cricket match a wicket.
The basic facts though are that some if the poorest opportunites occur at this point . When the market seems to confirm something you had thought about, you suddenly slip into this errant mode of operation. While people are afraid of running out of fuel, traders are afraid of running out of a favourable situation. They want to be right, even if it involves hindsight.
It’s simple to see error after it has occured , but it’s difficult not to execute against the will that you feel the need to do something at this point. However, you should simply move on and await the next opportunity, not try and chase the one that’s just gone. It quite likely another opportunity will be around the corner in a minute and if you act with foresight than hindsight, that’s always been much more profitable.
- Retailers have long known about scarcity
Category: General, Psychology, Trading strategies
