The reality? Markets are often in “tail” situations that can produce sizable profits–profits that, over time, will significantly outweigh losses that may occur when markets are not operating within tails. When I say tail, think back to that stats class you probably hated. The tail of the bell curve is what I mean: extreme events that are supposed to be very rare, but actually happen quite regularly in the markets.
Meaning, we all know the world is chaotic. We know surprises happen. We know that trying to explain the world with a perfectly symmetrical bell curve, a normal distribution, is not smart…so why not build a trading strategy to take advantage of that?