Why markets are so hard?

Human behavioral patterns project into the market reality, resulting in distinctive price action patterns. The effectivity of this process depends on the state of mind of the market crowd, the more the public is emotional, the more fuel for the patterns. But people usually have problems trying to play those patterns in discretional contact with the market, because it is hard to go against your own psychology. Your nature makes you fuel the market and burn your money.

But you may try to overcome this problem with systematic trading. This might seem a pretty obvious solution. But another problem arises. Having ability to back-test your ideas you may easily be tempted to allow the back-testing process to generate ideas. That gives birth to vicious circle of over-fitting. And makes the trader wander in a labyrinth of false interpretations. And you start having the same behavioural problems, but not around the price charts, but around your strategies equities.

So trying to overcome one problem you bump into another one. Which is worse, which is more manageable? Hard to say. But what is obvious is that there is no simple way to escape your behavioural problems. You can’t overcome this issue by simply changing the method of interaction with the market. The problem is not in the market. The problem is on your side.