"In the ever-shifting sands of time, young ones stumble, ensnared in the web of instant gratification. They chase after the ephemeral whispers of news, like moths drawn to a flickering flame, unaware of the knowledge that lies dormant in the annals of history. They forsake the wisdom of ages past, believing the present to hold all the answers. But true understanding lies not in the fleeting headlines of today but in the profound lessons etched in the tapestry of our shared past. Embrace history's tapestry, and you shall find the foundation to weave a future of wisdom and foresight."
- Leto II, God Emperor of Dune. (fictional quote, generated by ChatGPT)
During the 17th and 18th centuries, the British colonization of the Indian Ocean saw European powers establishing trading posts and ports along the coastlines of India, Sri Lanka, and other regions. These trading outposts facilitated the exchange of goods, ideas, and cultures between Europe and the Indian subcontinent.
As British traders and merchants expanded their networks across the globe, they encountered the challenges of conducting business in distant lands where information traveled at a slow and uncertain pace. The success or failure of their ventures often hinged on their ability to access timely and accurate information about events that could affect their trade.
The emergence of newspapers played a crucial role in addressing this informational gap. As the printing press became more widespread and efficient, newspapers began to circulate in major port cities and trading centers across England. Traders eagerly subscribed to these newspapers as a lifeline to stay informed about foreign markets, political developments, conflicts, weather patterns, and any other events that could impact their business interests.
The newspapers carried reports from far-flung corners of the world, providing vital information about commodity prices, shipping schedules, trade regulations, and political stability in trading partners' countries. For example, news of a conflict or war in a region where traders had vested interests could prompt them to alter their trade routes or suspend their business dealings until the situation stabilized. On the other hand, news of a promising harvest or a favorable trade agreement could boost their confidence in pursuing new opportunities.
The speed of news dissemination was of utmost importance to traders. Waiting for weeks or even months for information to reach England through slow-moving ships could result in missed opportunities or costly mistakes. Consequently, newspapers that could bring the latest news quickly gained popularity among traders.
To meet the growing demand for up-to-date information, newspapers started deploying express riders and couriers to collect news from incoming ships and deliver it to the printing houses with greater efficiency. These measures significantly reduced the time between an event occurring and its coverage in newspapers.
As technology advanced, the introduction of telegraphs and undersea cables further revolutionized the speed of news transmission. The invention of the telegraph allowed for rapid communication across vast distances, enabling news agencies to disseminate information almost instantaneously. This transformation marked the beginning of modern news consumption.
As newspapers flourished during the British colonization, cafés emerged as vibrant social spaces where diverse groups of people gathered to discuss politics, culture, and the latest news. Café owners recognized the potential of newspapers to attract patrons and foster intellectual exchange. Consequently, cafés often subscribed to various newspapers and made them available to their customers.
With newspapers now adorning the tables of cafés, these establishments became centers of information dissemination, enabling a broader segment of society to access news and stay informed about local and international affairs. Patrons could engage in lively debates and discussions over a cup of coffee while perusing the latest news from distant lands.
The presence of newspapers in cafés contributed to the creation of a public sphere, where ideas, opinions, and news circulated more freely. This facilitated the emergence of a more informed and engaged citizenry, challenging existing power structures and shaping public discourse.
With the advent of radio, television, and the internet in the 20th and 21st centuries, news dissemination has evolved into an instantaneous and global phenomenon. Today, traders, businesses, and the general public can access news from around the world in real-time through various digital platforms. Social media, news websites, and mobile applications have become primary sources for staying informed about global events and their potential impact on businesses and daily lives.
Despite this abundant access to global news, the disinterest in distant news among many individuals today can be traced back to the majority of human history when people lived in small, tightly-knit communities. In those close-knit settings, news and information were primarily local and directly relevant to their daily lives. People were preoccupied with matters in their immediate surroundings, and the need for news from faraway lands was minimal. The invention of newspapers, however, changed this dynamic. While newspapers played a crucial role in keeping businessmen informed about news in the colonies and distant markets, the average person's connection to such far-off events remained limited. As technology progressed, access to global news expanded, yet the historical context of living in local communities still shapes our preferences for more locally focused news and topics that directly impact our lives.
For newcomers venturing into the world of trading, especially in the realm of cryptocurrencies, there's often a belief that staying ahead of the game requires constant access to the latest news. Many might even end up shelling out for subscriptions to news services on social media and other platforms, hoping to gain a competitive edge. However, while information is indeed valuable, the real key to unlocking success in trading lies in adopting a different approach.
As enticing as it may seem to stay on top of breaking news and rapid market developments, there is a danger of falling into the trap of "news-chasing." Markets can be volatile, and reacting impulsively to every piece of news can lead to impulsive decisions that may not align with a well-thought-out trading strategy. Moreover, the same news can be interpreted in contrasting ways depending on the prevailing market sentiment, leading to contradictory trading signals.
To avoid the pitfalls of excessive news-driven trading, traders would be wise to take a step back and slow down their approach. By diving into books that delve into the art of trading and human nature, they can uncover timeless wisdom that has stood the test of time. These books often explore the psychological aspects of trading and highlight the role of human behavior in shaping market movements. Understanding the psychology of fear, greed, and herd mentality can be a game-changer for traders, as they learn to read the emotions of the market and capitalize on sentiment swings.
One of the fundamental truths about the market is that it is made up of individuals, each with their own biases, beliefs, and motivations. Consequently, trading is not merely a numbers game, but rather a delicate dance of navigating human emotions and actions. By developing a deep appreciation for this aspect of trading, newcomers can transcend the illusion of trading the news and embrace a more holistic and informed approach.
Moreover, by studying the history of financial markets and analyzing past trends, traders can uncover patterns that repeat themselves across generations. While technology and circumstances may change, human nature remains remarkably constant. The market has always been a reflection of human behavior, with periods of euphoria and panic shaping price movements. Recognizing these recurring patterns enables traders to anticipate potential market turns and make more well-informed decisions based on historical precedents.
Ultimately, the path to trading success is not paved with instantaneous news chasing but rather with introspection and education. By cultivating a deep understanding of human psychology and the dynamics that drive market sentiment, traders can hone their skills to navigate the unpredictable waters of trading with greater confidence and resilience. Embracing a patient and measured approach, seasoned with the wisdom of history and human nature, can lead to a more sustainable and rewarding trading journey.
(this article has been proof read and edited with the assistance of ChatGPT)
Awesome thst you are back heart. Meanwhile, could you suggest some books on trading cycle according to the market sentiments?
Great article. I especially liked the historical background of news and then finishing up by showing how history is more important than the news itself. I've moved from crypto to commodities lately and everything you wrote applies 10x over there.