Conviction

The only way to make big money in this game is to have both skill and conviction.  Skill without conviction leads to taking the right positions but getting easily shaken out.  Conviction without skill leads to taking big positions without edge which eventually leads to ruin.

There are a lot of smart investors, with good track records that are bullish this market.  Does that make me pause to take my short positions?  A bit, yes.  But you can't trade other people's calls unless you believe in them.  And I just don't believe in the bull case, so even if I took a long, it would be without conviction, and I would be easily shaken out if the market goes against me.  I think those smart investors are mainly long because of the pullback and the bearish readings in the sentiment polls, while mostly ignoring fundamentals and valuations.

At this juncture, I don't think you can ignore the price action, fundamentals, and valuations just to be contrarian.

I have to trade what I know, and what I have conviction in.  The trolls and the keyboard warriors can say I am wrong and come out of their hiding holes when my trade goes against me.  They only make me believe even more in my position.  I get much more worried when too many people, especially losing traders, think the same way I do.

Of course the trolls disappear when the trade goes in my favor.  Then, it truly is the silence of the lambs.  Instead of focusing on improving their trading, the trolls use all their energy to annoy and badger.  It is sad to see those who lose money trading hoping others lose as well.

The best trade of the year, long short term Treasuries, just refuses to let you in, even with a big rally in stocks.  It is like the S&P in 2013.  The BOJ really mucked it up for us bond bulls who wanted to buy a dip in bonds on a stock market rally.  I had to settle for shorts in crude oil and S&P.  I would have much rather had a chance to go long Treasuries at good levels.