The previous post has made me think about market participants’ propensity to rationalise the market action. If you ask people why support and resistance levels form on charts, for example, they will tell you stories about where people decide to buy and sell, where they put their stops, and so on. But actually, if you were new to the markets but had a good understanding of both randomness and your own natural tendency to see patterns, you would not be surprised to see support and resistance levels or require further explanation.

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