{"id":40601,"date":"2015-04-20T11:42:15","date_gmt":"2015-04-20T15:42:15","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=40601"},"modified":"2021-05-06T16:44:19","modified_gmt":"2021-05-06T20:44:19","slug":"enhancing-trader-performance-the-tendency-to-twaddle","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/enhancing-trader-performance-the-tendency-to-twaddle","title":{"rendered":"Enhancing Trader Performance: The tendency to twaddle"},"content":{"rendered":"

If you have nothing to say, say nothing. \u2013 Mark Twain<\/span><\/p>\n

Have you ever been on the receiving end of a conversation or listened to an explanation and thought, \u201cwhat the heck did he just say?\u201d Or have you read something and had to reread\u00a0something several times to figure out its meaning? If you have it is usually not because of your lack of understanding but the orator\u2019s or writer\u2019s tendency to use reams of words to hide intellectual laziness, stupidity, ignorance, or underdeveloped ideas. <\/span><\/p>\n

Oftentimes, if the person is not prepared to answer he or she will simply make something up instead of saying nothing at all. A good example would be Miss South Carolina\u2019s explanation<\/a> of why a fifth of Americans were unable to locate their country on a map. Or, how about the following blather from sociologist Jurgen Habermas: \u201cThere is certainly no necessity that this increasingly reflexive transmission of cultural traditions be associated with subject-centered reason and future-oriented historical consciousness to the extent that we become aware of the inter-subjective constitution of freedom, the possessive-individualist illusion of autonomy as self-ownership disintegrates.” (from his book, Between Facts and Norms<\/em>).\u00a0 If this is normal and there are facts here, I fail to see the humor.<\/span><\/p>\n

The above examples refer to our tendency to twaddle or to engage in trivial or foolish speech.\u00a0 What we would call non-sense, gibberish, or rubbish.\u00a0 We hear and read examples of twadding almost every day in the financial\u00a0media such as \u201cearnings missed estimates\u201d (earnings do not miss estimates; estimates miss earnings); \u201cwe\u2019re cautiously optimistic\u201d (oxymoron\u2026moron); \u201cthe S&P 500 is down [X] points as investors react to [X}\u201d (stocks in general are never up or down for any\u00a0ONE reason); and \u201cinvestors are selling this market\u201d (so stocks are going to 0 since no one is buying what they are selling?).\u00a0 Stupid, idiotic twaddle.\u00a0<\/span><\/p>\n

Traders are no different- \u201cThe stock went up because the MACD crossed the 30 line when the price hit the bottom bollinger band\u201d or \u201cthe stock went down because it hit the top channel line on low volume\u201d.\u00a0 Stocks do not move because of some indicator or combination thereof\u2026period.\u00a0As if some indicator can predict the future. \u00a0Indicators react to price, not vice versa. Indicators, price patterns, headlines, explanations, etc are all a way for us to interpret information.\u00a0 We want an explanation.\u00a0 A twaddle, in whatever form, can provide it.\u00a0<\/span><\/p>\n

For further clarification\u2026without the twaddle: \u00a0<\/span><\/p>\n