This price would represent the consensus belief about value, relative to the future, of all the traders who are in the market in that moment. The current price is a direct reflection of the beliefs of all the traders who choose to act as a force on prices by putting on a trade. Thus when there are tow traders, one wanting to buy and one wanting to sell at a price and do so, they have made a trade, and they have also made the market.
All that is needed to make market right are tow traders willing to trade at a price. Regardless of the criteria they used to determine value, how rational, irrational, meaningful, or meaningless by your belief system. Once they are willing to express their belief in future value by making a trade, they made a market.
The market is always right.
What you believed about value and your reasons for believing it may be of highest quality, but if the market doesn’t share your belief, it doesn’t really matter how”right ” you are based on your superior reasoning process or what you believe to be the quality of your information, because simply prices are going to going the direction of the greatest force. Basically right or wrong doesn’t exist in the market environment. Academic credentials, degrees, reputations, even high I.Q. don’t make you right in this environment as they would in society.
Each individual trader will define what market condition represents enough of an opportunity to put on a trade for whatever reason suits him. Regardless of how wrong you think you may be, if the net result of the collective actions of all the traders participating is moving prices against your position, then they’re right and you’re the one who is losing money. The market is never wrong in what it does. Therefore, you as an individual interacting with the market, first as an observer to perceive opportunity, then as a participant executing a trade, contributing to the overall market behavior- have to confront an environment where only you can be wrong, and it’s never the other way around. As a trader, you have to decide what is more important
-being right or making money- because the two are not always compatible or consistent with one another.