Ep. 33 - Fear Pays the Bills
Wall Street is a waiting game.
Traders make hay when volatility strikes.
Ultimately, fear pays the bills.
Professional traders’ P&L follows the Pareto principle, also known as the 80/20 rule.
80% of the profits come from 20% of the setups. This is accurate as I vividly remember how lucrative forced selling events were.
The capitulation liquidity cycle follows a repeatable pattern:
First, news headlines or worries seemingly spring out of nowhere
Small scale selling ignites a surge in volatility
Everyone rushes for the exits at once
Fast market conditions ensue, market makers widen their…
The skinny
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