Continued stress on the the indexes from bad data, bad price action, and pessimistic forecasts kept pressure on the markets Friday. Approaching quickly is the test of significant price areas and a potential emergence of a psychology of liquidation which can be a monster one should not waken.
Learning bad habits in good markets and learning good habits in bad markets is always the case, it is just that the former, when finally reckoned with, is so devastating, that the general trading community and the overall economy are left much thinner. The 80/20 rule is the same in trading, 20% traders know what they are doing and the other 80% do not or work on Wall street. We have moved into a new era of global electronic trading, but not new enough that extremely stupid strategies can avoid being executed. The success will always be in the strategies which identify risk first and opportunity second.
