[Simple Thoughts] Why you need to be a Independent thinking Trader/Investor?

In this social media Era becoming an Independent thinker is lot difficult as we are often bombarded with continuous flow of opinions,information,rumors from the facebook groups, Whatsapp/telegram chat groups, twitter, financial news portals, TV channels, Youtube channels, E mail newsletters. Everything talks about what the consensus is doing. Some are contrarians, some are trend followers. Often traders ended up with the biased opinions from their fellow community traders/Investors.

If you are part of such groups and still struggling to keep your community of traders opinion at the bay? Then look into the Core philosophy of Mr. Ray Dalio (founder of investment firm Bridgewater Associates, one of the world’s largest hedge funds). Core to Dalio’s philosophy is becoming an independent thinker rather than focusing on what you are taught by others:

To make money in the markets, you have to think independently and be humble. You have to be an independent thinker because you can’t make money agreeing with the consensus view, which is already embedded in the price. Yet whenever you’re betting against the consensus, there’s a significant probability you’re going to be wrong, so you have to be humble.Ray Dalio

In other words, according to Dalio, the key to being a successful investor/trader is finding when the consensus is wrong and having an independent opinion that is right.

Understanding the importance of independent thinking is essential. Being able to think independently opens up a wealth of potential knowledge. It enables you to become more discerning about the things you hear, see and believe about markets and helps you question the irrational price movements and eliminate weird market assumptions.

Initially it is good to learn, listen from the experts & from the trading/investing community. When you have a sufficient learning curve it is always good to do self analysis, self experiments rather than still double confirming with other traders/investors opinion. Double confirming with experts is a high probability way to die in dynamic market environments.

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