This is a new world not a new normal!

This article is not about next week news. It’s about mindset.

Some traders desperately want markets to go back to the good ol' days: when interest rates were at zero; inflation was not a concern; no war or conflict was so far-reaching it could disrupt prices unexpectedly; when technical analysis was all you needed to know to make a profit; when even a pandemic that brought the markets to their lowest levels ever, then filled families with so much liquidity (especially in the U.S. with governmental aid) that suddenly anyone could be an investor, even buying fake money, like cryptocurrencies.?

Guess what? Even if we escape the intense economic crisis some analysts have been warning us about, it is not likely that interest rates will come down by the end of the year and everything will go back to how it ever was.?

How were things back, anyway? The pandemic left us with a weird economy, then came a war in Ukraine with unforeseen consequences, and we are living in a "new normal" that is far from the "normality" concept as we understood it before 2020.?

Considering U.S. as a barometer, economic data is robust, even if GDP is growing at a slower pace. Nevertheless, there’s no perspective for the conflict between Russia and Ukraine coming to an end anytime soon. Such instability, added to China’s intentions towards Taiwan and the vagueness around a "New World Order", mean markets will continue choppy with charts going sideways.

It is quite likely that this new inflation era is by no means over. Prices will continue to go up and go down, leaving a trace of irregular waves and sudden dives, that are there to remind you no trader controls the market.

As unsettling as company failures and price plunges can be they are just a part of capitalism. Get used to it or quit trading!

All around the Ocidental world, the lockdowns brought changes in consumers' behavior, namely in the need for luxury, indulgence and travelling and so far there’s little sign that customers are shopping less frequently or trading down. Inflation could stick around if strong consumer spending allows companies to keep prices high without losing business. If that happens, the FED will continue with its stiff monetary policy with higher rates for longer.?

Higher interest rates change the logic of investing: if an investor can earn a guaranteed 5% return in 10-year U.S. Treasury bonds, why should he/she undergo in speculative trading or put their money in a startup or venture fund with an uncertain return?

Some analysts argue the big correction during this kind-of-recession will not be in the economy but in asset prices as the Fed continues to deflate the "buy-everything bubble" created by their “printing-money policy”.

Highly leveraged institutions will run the risk of blowing up, so corporations will be more careful with their spending. Sectors with business models that rely on debt like real estate and private equity can experience implosions as time goes by.?

In such scenario, if you want to be successful as a trader you have to do more than follow tweets or look at charts.

You must explore all the particularities of the assets you trade and dig into the news and reports, every day, every hour.?

If you invest in stocks you must look at companies’ balance sheets and financial reports; if you invest in forex or commodities you must know more than the basics about macro-economy. At the end of the day, as Warren Buffet, the most successful investor in the world, says

You don’t need a great IQ to earn money you just need emotional stability.

Create your winning process and live by it!