Stop Asking 'Why'

Trade probabilities, not narrative.

Knowing why something happens is nice. It feels productive. It makes for great content. But unless you’ve got a hold time of weeks or months — during which your probability of being right slowly erodes anyway — you’re almost always better off ignoring the macro slop we’re drowned in on podcasts, X, the news, and yes, Substack.

Let me say up front that I have deep respect for the macro pundits who genuinely understand how and why a market move could ripple into the real world weeks or months down the track. That’s a real skill. I actually graduated from the University of Queensland with a major in macroeconomics, so this isn’t me dismissing a field I never bothered to learn. I love it. I just learned, the hard way, that it has almost nothing to do with how I make money day to day.

Here’s the thing. Every move has a narrative. This week it was “tech collapse” — the catalyst that supposedly sent the market down more than 100 points. Next week it’ll be something else. Oil. Rates. A central banker clearing his throat. Retail traders get swept up in the story, frantically connecting dots about how this move feeds into that outcome, building an entire worldview on top of a single session.

And knowing those potential knock-on effects doesn’t help a day trader. Not even a little.

I had people calling me crazy recently while I sat there calmly trading long into a 100-point Asia session collapse. Tech was going to get belted! The story was airtight. The problem is, if any of them had taken a cursory glance at every other time this exact scenario has played out, they’d have realised pretty quickly who the crazy one actually was. It wasn’t me. The narrative was loud and emotional. The data was quiet and boring. The data won, like it almost always does.

It’s the same story with major economic releases. I could give you a stack of supporting evidence for a position that sounds heretical to most retail traders: the actual print, the vast majority of the time, means nothing.

The positioning is taken well before the event. The number drops, the move you were already expecting gets realised, and the headline figure — the thing everyone stayed up late to watch — is mostly theatre. People agonise over whether it’ll come in at 3.1 or 3.3, when the move was baked in hours before and has very little to do with the digit on the screen.

This is the part that takes a while to accept, because it feels lazy. Like you’re not doing your homework. We’re conditioned to believe that the more we understand the why, the better we’ll trade. More context, more reasons, more confidence. But for a short hold time, the causal story is a distraction dressed up as analysis. You can be completely right about why tech should fall and still get run over, because the why and the when live in different universes.

So I stopped asking why. Not entirely — I’m still a curious person and I still enjoy the macro for what it is. But I stopped letting it anywhere near my trading decisions. What replaced it is much simpler and much more useful:

how often has this setup played out, and what happened next?

That’s it. Probability over narrative. What the data has done thousands of times, over what a clever person on a podcast reckons it’ll do this time.

The freedom in that is hard to overstate. When you’re not trying to out-think the macro, you’re not constantly second-guessing a position the moment a new headline crosses. You’re not whipsawed by every commentator with a confident voice and a thesis. You just trust the process, take the trade, and let the probabilities do the work. Calmer. More repeatable. Less exhausting.

“Whatever happens in the stock market today has happened before and will happen again.” — Jesse Livermore

The irony is that the people asking “why” the loudest are usually the ones most surprised by what the market actually does. They’ve built a beautiful, logical story — and the market doesn’t read stories.

Cheers Marto