The efficient market theory
A trader strains his mind, his soul, his entire being trying to take profits out of the market when an unsettling piece of news comes down the pike - the efficient market theory. Its main adherents are academics, who are found of pointing out that prices reflect all available market information. People buy and sell on the basis of their knowledge and the latest price represents everything known about that market. This is a valid observation, from which the efficient market gang draws the curious conclusion that no one can beat the market. Markets know everything and trading is like playing chess against someone who knows more than you. Don't wast your time and money - simple index your portfolio and select stocks based on volatility.
What about trader who make money? The efficient market theorists say that winner are plain lucky. Most people make money at some point, before bleeding it back into the markets. What about those who keep outperforming markets year after year? Warren Buffet, one of the twentieth century's great investors, says that investing in a market in which people believe in efficiency is like playing poker against those who believe it does not pay to look at the cards.
Option basics
What about trader who make money? The efficient market theorists say that winner are plain lucky. Most people make money at some point, before bleeding it back into the markets. What about those who keep outperforming markets year after year? Warren Buffet, one of the twentieth century's great investors, says that investing in a market in which people believe in efficiency is like playing poker against those who believe it does not pay to look at the cards.
Option basics
