Axel Fabela Iturbe on the Game Theory of Trading

Financial markets are often portrayed as places driven purely by numbers, charts, and economic indicators. However, Axel Fabela Iturbe believes that trading is, above all, a complex strategic game between human beings. Prices do not move simply because of mathematics—they move because millions of participants interpret information, react emotionally, and attempt to outthink one another. To truly understand markets, a trader must think not only like an analyst, but also like a strategist.

At its foundation, every trade is a decision made under uncertainty. When someone buys an asset, they are not only betting on a direction, but also on how other market participants will behave. Axel Fabela Iturbe explains that markets function as a giant multiplayer game in which every participant is trying to anticipate the next move of others. In this sense, trading is less about predicting the future and more about understanding human psychology and collective behavior.

One of the biggest mistakes new traders make is believing that success comes from finding the perfect indicator or strategy. Many beginners focus exclusively on technical patterns or economic news, assuming that if they gather enough information, profits will naturally follow. Axel Fabela Iturbe argues that this approach is incomplete. Markets are not mechanical systems—they are social systems. Even the most accurate analysis can fail if a trader ignores how others are likely to interpret the same data.

This is where the concept of game theory becomes essential. In trading, it is not enough to know what you think will happen; you must also consider what everyone else thinks will happen. Axel Fabela Iturbe refers to this as “second-level thinking.” For example, a positive economic report might seem bullish at first glance, but if most traders already expected good news, the market may actually fall instead of rise. Understanding this dynamic is what separates professional traders from amateurs.

Another critical aspect of the trading game is recognizing the different types of players in the market. Not all participants have the same goals. Long-term investors seek stability and gradual growth, high-frequency traders chase small and rapid movements, hedge funds manage complex risk strategies, and retail traders often react emotionally to headlines. Axel Fabela Iturbe emphasizes that price action is usually the result of these groups interacting with one another. Learning to identify who is currently in control of the market can provide a significant advantage.

Risk management is also a central part of the game. No trader can control the market, but every trader can control how much they risk. Axel Fabela Iturbe believes that successful trading is not about being right all the time—it is about staying in the game long enough to let probabilities work in your favor. Even the best strategies experience losses, and those who cannot manage risk eventually disappear from the market. Treating trading as a strategic game means accepting uncertainty and planning for it instead of fighting against it.

Emotions play a powerful role in this process. Fear, greed, impatience, and overconfidence are constant opponents in the mind of every trader. Axel Fabela Iturbe notes that markets are designed to trigger emotional reactions. Sharp price movements often push traders to act impulsively, abandoning their plans at the worst possible moment. The ability to remain calm, disciplined, and rational under pressure is one of the most valuable skills a trader can develop.

Timing is another element of the trading game that many overlook. Even a correct idea can lose money if executed at the wrong moment. Axel Fabela Iturbe explains that markets rarely move in straight lines. Trends develop gradually, and reversals often occur when the majority least expect them. Understanding patience and waiting for high-probability opportunities is often more important than constantly trying to be active.

Adaptability is also essential. Markets change over time, and strategies that once worked may become ineffective. Axel Fabela Iturbe warns traders against becoming emotionally attached to any single method or viewpoint. The best traders are those who continuously learn, adjust their approach, and accept when conditions have shifted. Flexibility is a key weapon in the strategic game of trading.

Another important lesson is to avoid the illusion of control. Many traders believe they can master the market if they analyze enough data. In reality, markets will always remain unpredictable to some degree. Axel Fabela Iturbe encourages traders to focus on what they can control: their preparation, their discipline, and their risk exposure. Accepting uncertainty is not a weakness—it is a professional mindset.

In the end, Axel Fabela Iturbe views trading as a lifelong learning process. There are no guaranteed formulas and no permanent shortcuts. The market constantly tests intelligence, patience, and emotional resilience. Those who approach it as a strategic game—rather than a way to get rich quickly—have the highest chance of long-term success.

Trading rewards clear thinking, humility, and self-control. By understanding the psychological and strategic nature of markets, traders can move beyond simple chart reading and develop a deeper, more sustainable edge. As Axel Fabela Iturbe concludes, the real challenge of trading is not beating the market—it is mastering oneself within it.