“This Move Doesn’t Make Sense”

Markets don’t exist to make sense. They exist to set prices. If you wait for clarity, logic or fairness before acting, you miss the move. Price moves first. Explanations come later, if they come at all.

The mistake most people make is believing that discomfort means something is wrong. A trend that feels unjustified, excessive, or “crazy” triggers the urge to interfere. People trim winners, move stops too fast or avoid getting involved entirely because it doesn’t feel right. That feeling is not insight. It’s bias. And bias is expensive.

Trends don’t need permission to continue. They don’t care about fundamentals, history or what “should” happen. Markets simply do what they do.

Investing in a manager or adopting some historically successful trading rules-based doesn’t remove emotion either. You still feel every drawdown and sharp reversal. The difference is whether those feelings force you to jump ship. Discipline isn’t about being calm; it’s about executing anyway.

Following your discipline when everything in you wants to override them is what separates the winners and losers over the long run.

Look at some recent mega trends — AI stocks, Cocoa, Bitcoin. To many, the moves felt absurd. Most people couldn’t bring themselves to participate in the first place. Those that did, I suspect many left a lot of money on the table because they simply couldn’t hold the winner but needed to indulge their feelings of “this is crazy” or “this can’t last” or “I bet that recent reversal was the top”.

This is the stuff that matters. This is the stuff that erodes returns over the long run.

If you believe your job is to make money all the time, you’ll eventually justify breaking your own rules. That’s how you lose.

Markets are chaotic. Accept that. Don’t add your feelings to this chaos. Have rules. Follow them. Work on your feelings.