If you want to win in investing, become an idiot!

Being too smart makes you more likely to lose in the market.

This is something I strongly feel from actually continuing trading. In particular, people who are good at logical thinking or who study hard tend to fall into this trap more easily.

“If you want to win in investing, become an idiot”

This does not mean “do it casually.”
What it means is that to clearly discern the essence of the market, you need to strip away excessive thinking.

Reasons why smart people tend to struggle in the market

Many people have been urged to think logically in school education and social life.
Therefore, in the market they subconsciously overcomplicate things, thinking “I must analyze more logically.”

However, the market is not driven solely by pure logic.
The market operates not on “logicalism” but on “rationalism.”

When smart people accumulate logic thinking “this should happen like this,” they often deviate from the real market reality.

The market is like a great nature

When understanding the market, I often think, “The market resembles nature.”

Think about Earth's climate and weather.
You can predict some trends to a degree, but you cannot explain everything completely with logic.

Various factors intertwine in complex ways and sometimes move in an irrational manner.

The market is the same.

Beyond economic indicators and interest rates, it is also influenced by the psychology and expectations of market participants, as well as how algorithms respond.
Even if you think “this will happen,” in reality it can move in a completely different way.

If you feel this irrationality is “unexplainable,” you’ll have a hard time making calm judgments in trades.

The importance of thinking simply

There is a medieval philosophy called Occam's Razor.

It states that when explaining a phenomenon, you should not introduce more complex assumptions than necessary.
In other words,simpler explanations are more likely to be true.

This also applies very well to the market.

Rather than engaging in complex analyses and incorporating many conditions,
it is often more rational and easier to sustain your approach by simple rules like “enter when this line is clearly breached” or “stop loss when these conditions are met.”

My own experience with the failure of overthinking

When I started trading, I tried to combine many elements logically, thinking, “I must judge more accurately.”

I checked multiple timeframes, considered fundamentals, thoroughly studied past patterns…
As a result, my judgments were delayed and I often missed good timing.

Conversely, when I simply decided to “enter when these conditions are met” and acted, I tended to achieve better results more often.

In the market, what matters is not whether you are right, but whether you are rational at this very moment.
Even if you are logically correct, if your action is delayed it’s meaningless.

The meaning of “becoming an idiot”

Here, “becoming an idiot” refers to the following attitudes.

• Letting go of unnecessary information and focusing only on what is truly needed
• Not overthinking “why this happens” too deeply
• Accepting the market's irrational movements as “that’s how it is”
• Following simple rules without being swayed by emotions

Smart people tend to think, “I can do even better,” but in the market that mindset can actually hinder you.

I feel that many traders who have achieved long-term results tend to keep things simple more often than not.

Conclusion

If you want to keep winning in investing, trying being a bit “stupid” can be effective.

Rather than aiming to understand the market perfectly with logic,
discern as simply as possible what the market is currently seeking.

If you feel you are overthinking, try focusing on thinking more simply first.
That may change how you approach the market.

※This article is based on individual trading experience. Investing involves risk, so please make your own judgments and take responsibility for them.